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Report finds average SME misses almost $2,000 in unclaimed deductions
Research commissioned by Officeworks found over half of its small business respondents were not aware that superannuation (54%) and wages paid to employees (51%) were tax claims they could use for their annual tax return. Among SMEs that failed to keep full records of invoices of work-related receipts for claiming a tax deduction, it was estimated they were losing out by an average of $1,981 in tax savings. Around 54% reported they were not aware of the government’s proposed changes to instant asset write-offs, while 43% said they were aware something had changed but did not understand the details. To make sure your business is not missing out on any legitimate deductions, see Taxpayers Australia’s checklist of business deductions.
Small businesses keep making the same end-of-financial-year mistakes: survey
A survey conducted by both MYOB and the Institute of Public Accountants has found that the top mistakes continually being made by small businesses at the end of the financial year were: miscoding transactions (65%), not keeping accounts and records up-to-date throughout the year (58%), not making contact with their accountant over the financial year (58%), not providing enough detailed or supporting information (49%), and not being fully trained up on accounting software functionality (46%).
Timely reminder: provide bank details when lodging tax return
The Tax Office has issued a timely reminder to businesses by warning them that they need to give their bank details when lodging a tax return electronically if they expect a refund. For tax time 2014, this requirement will apply to the FBT return, the company income tax return, the trust income tax return, the self-managed superannuation fund (SMSF) annual return and the fund income tax return. It is important that businesses ensure their bank details are correct because incorrect details could delay their refund and cause it to be deposited into a wrong account.
Remember to cancel GST registration if need be
The Tax Office has urged businesses that are registered for goods and services tax (GST) and decide to sell or close their business to cancel their GST registration within 21 days of the sale or closure.
Another situation in which businesses may need to cancel their GST registration is a change to their business structure – such as from a partnership to a company. Businesses may also choose to cancel their GST registration if their GST turnover is below the compulsory GST registration threshold of $75,000, unless they are a taxi driver, represent an individual who is bankrupt and is registered (or required to be registered) for GST, are a business that is in liquidation and is registered (or required to be registered) for GST, or are an Australian resident who acts as an agent for a non-resident that is registered (or required to be registered) for GST.
Compensation considered for small businesses unfairly fined by taxman
A recommendation from the Inspector-General of Taxation (IGT) Ali Noroozi, and being seriously considered by the government, would see small businesses that have been fined in error by the Tax Office able to apply for financial compensation. The IGT found that small and medium-sized businesses tend to bear the brunt of most Tax Office fines dished out – which over the 2010-11 to 2012-13 income years totalled $4.25 billion. Of that total, the IGT found that micro businesses – defined as employing between one and five staff – took the biggest hit as they were saddled with $1.4 billion in fines over that period, or 51% of total penalties issued.
The Tax Office smartphone app: So what’s that all about?
The Tax Office’s smartphone app puts another tool in the small business owner’s belt to conduct all sorts of tax and superannuation transactions. You can use the app to check income rates for the current financial year, search for lost superannuation, calculate fuel tax credit entitlements you can claim on your business activity statement, determine whether your worker is an employee or contractor for tax and superannuation purposes, and watch videos and access checklists and other helpful information on SMSFs, among other things. You can also get answers to common questions, find out what’s new or what’s changed, and give the Tax Office your feedback. After you lodge your tax return, you can use the app to check your return’s progress. Go here to find out more about the “ATO App”.
ASIC launches app for small businesses
ASIC has released an app called ‘Business Checks’ that will help small business owners undertake important checks before they enter into business transactions with other organisations. It is available from iTunes or GooglePlay. ASIC Commissioner Greg Tanzer said the app should help reduce the risk of businesses being “swindled by unreliable operators and fly-by-night businesses”. Available for smartphones and tablets, ASIC Business Checks encourages business owners to ask the right questions about any company, business and individual they deal with; check ASIC’s registers and verify that the information they have been given is accurate; seek ASIC’s help if they need more information or the support of a professional business adviser; and report suspected misconduct to ASIC if they believe a company, business or individual is acting unlawfully.
Carbon tax repealed to business bodies’ relief
Business bodies have welcomed the repeal of the carbon tax. Council of Small Business Organisations of Australia (COSBOA) chief executive Peter Strong said the decision finally provided some certainty and would allow small businesses to plan and budget for the future. “The scrapping of the carbon tax will also provide undeniable financial benefits, with reports from some electricity and gas suppliers already confirming that electricity prices for residential and small business customers will fall,” Strong said. Australian Industry Group (AIG) chief executive Innes Willox welcomed the repeal but said the “process leading up to it was unfortunately chaotic and opaque”. “We strongly urge all parties to ensure that future legislative changes and amendments can be considered in detail and consulted on in full with businesses and others who are affected well before a vote,” Willox said.
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