Small Business Energy Incentive: Your Key to Tax Savings and Sustainability

The Small Business Energy Incentive is now law, offering a 20% bonus tax deduction for eligible assets and improvements that enhance energy efficiency. This incentive is available to small businesses with an aggregated annual turnover of less than $50 million and covers expenses incurred between 1 July 2023 and 30 June 2024—the ‘bonus period.’

What Can You Claim?

Under this program, you can claim up to $100,000 in total expenditures, with a maximum bonus tax deduction of $20,000 per business. Eligible expenses include:

• Upgrading to electric heating and cooling systems

• Installing energy-efficient fridges and cooktops

• Setting up batteries and heat pumps

These improvements not only lower your energy bills but also contribute to a greener business model—a win-win for your bottom line and the environment.

What You Can’t Claim

It’s important to note that the incentive does not cover:

• Assets using fossil fuels

• Assets primarily for electricity generation (e.g., solar panels)

• Capital works

• Motor vehicles

• Software development costs

• Financing costs

How to Maximise Your Savings

To benefit fully, ensure your assets are both first used or installed and used for a taxable purpose within the bonus period. Keep thorough records of your expenses, including how you evaluated and compared different assets during upgrades. These records are crucial for substantiating your claims.

Why Act Now?

This 20% bonus deduction is in addition to other deductions your business would normally claim. By upgrading your assets now, you can take advantage of this incentive and position your business for long-term energy savings.

Ready to Save?

Save on tax and save the Earth – let Aero Accounting Group help you land both! Call us today!