Small businesses are unnecessarily overloaded by compliance requirements, which has resulted in the Australian Small Business and Family Business Ombudsman, Kate Carnell, demanding significant changes to the Australian tax framework.
The Ombudsman has made a number of recommendations regarding taxation as part of the COVID-19 recovery plan:
- Optional single payment to ATO to cover the PAYG (W) pension guarantee and the GST.
- The review period for small business tax returns is one year after filing.
- Abolition of ancillary tax for small businesses.
- Permanent, $ 150,000 small business wealth tax amortization.
"The coming months will be critical for small Australian businesses as they try to get back on their feet after COVID-19," said Ms. Carnell.
“There has never been a more difficult time to be in business. The last thing small businesses need is the stress of adhering to overly complicated processes while trying. Balance your cash flow. "
“In the past few decades, small business owners have had to withhold taxes on workers' wages (PAYGW), the additional pension guarantee and the GST. This has shifted administrative responsibility from the government to small businesses that face significant penalties and interest if an honest mistake is made.
“Our plan recommends that ATO develop a solution that enables employers to meet these commitments with a single payment to ATO on every payroll or monthly. It would have to be phased in to give small businesses the ability to manage their cash flow accordingly.
“While most small businesses pay their fees, ATO audits can be up to five years behind, which is incredibly disruptive and stressful. Our plan states that ATO has enough up-to-date data to identify violations within a year of submission. If an unintentional error is found, the small business should be given the opportunity to correct it.
“Our plan recommends eliminating the Fringe Benefits Tax (FBT) for small businesses. Currently, small businesses have to pay FBT for items that large businesses provide internally to keep employees such as meals, gyms, and daycare centers, and don't have to pay FBT.
“Small businesses also need security to be able to buy larger devices. The recent increase in the government's depreciation threshold to $ 150,000 is welcome, but most small businesses are currently focusing on their survival. Our plan recommends making this temporary policy permanent. This would significantly reduce the need for depreciation and cut red tape.
"We know the government is taking a corporate recovery from this pandemic seriously, but success is only possible if it is reconciled with the support small businesses need to get the economy back on track.
"Ultimately, small businesses need to be freed from the burden of unnecessary regulations and strict compliance requirements, along with fears of ATO recovery measures and severe penalties," said Ms. Carnell.
The post demands for tax changes, since small businesses are already overloaded, first appeared in Retail World Magazine.
