Rules for Skills and Training Boost must change to include small business owners, says CPA Australia

Draft legislation providing small businesses with access to deductions for staff training ought to be amended so that sole traders and individuals operating businesses in partnerships and not just employees can access it, according to CPA Australia, one of Australia’s largest professional accounting bodies.

The Albanese government exposed draft legislation intended to enact the Skills and Training Boost, a measure first proposed in the March 29 federal budget that would give small businesses an additional 20% tax deduction for external training provided to staff by registered Australian training providers.

That legislation has been drafted to ensure the temporary training measure would apply from budget night until June 30, 2024, to small businesses that have an aggregated annual turnover of less than $50 million.

The deadline for submissions to federal Treasury closed earlier this week.

CPA Australia tax policy spokesperson Elinor Kasapidis said the professional body was pleased the federal government had moved to legislate the measure.

“There was concern within the business community as to whether these would go ahead,” Kasapidis told SmartCompany.

“CPA Australia had been calling on the federal government for clarity and we’re glad they have acted on these concerns.”

Kasapidis said the current state of the economy remains uncertain and there is no indication that this will ease, given increasing costs, rising interest rates and skill shortages that this particular measure is designed to address.

“Incentivising owners to invest in their business is important to maintain confidence and address skills shortages. These boosts are a practical step,” Kasapidis added. 

“The measure also provides certainty to small businesses that have already spent funds in anticipation of the boosts being legislated.”

However, CPA Australia does have a significant problem with the scoping of the legislation. The current drafting of the law restricts the measure to employees only.

This means that anyone operating as a sole trader or within a partnership is ineligible for the deduction on offer because of the business structure under which they have chosen to operate.

“This discriminates against the more than 1.3 million sole traders and individuals in a partnership who are an essential part of Australia’s economy. CPA Australia wants these entrepreneurs and business owners to also have access to skills and training incentives,” Kasapidis said.

“Many small businesses require further support to enhance their digital capability, regardless of their business structure. The Skills and Training Boost should be available to sole traders and partners. They should be treated equally.”