Small Businesses Baffled by Tax Concessions
A nationwide survey has found that confusion reigns among small business operators over what tax concessions they are able to access, prompting experts to warn that thousands of business owners may pay too much tax this financial year.
A survey by American Express found that just 10% of small business owners said they were completely up to speed with the existing tax breaks for small businesses. The number was slightly higher at 14% among those businesses that prepared their tax returns without the help of an accountant.
Jason Fryer, head of Small Business Services at American Express said, “It’s clear from the research that many small business owners may be missing out on concessions that may assist their business in the next financial year. Depending on the size and activity of the business, the value of these concessions could be quite substantive. Understanding what tax concessions are available is just as important as being familiar with reporting obligations.”
Taxation expert and author, Adrian Raftery, added, “From my experience one of the most common questions I get asked from small business owners is: ‘Is there something that we are missing out on in our tax?’ This research supports my belief that there are thousands of Australian business owners out there who are paying too much tax simply because they are not aware of what rebates and concessions they are legitimately entitled to.
“Learning what can be claimed as a business tax concession does not need to take up a lot of time, but it could save business owners a significant amount of money which could be ploughed back into the business.
“Some small business concessions that are available include the simplified depreciation rules which allow small business owners to immediately write-off many depreciating assets that cost less than $1000 (rising to $6500 from 1 July 2012), the entrepreneurs tax offset and the 45% R&D tax incentive for research and development expenditure,” said Mr Raftery.
The national survey of more than 1000 small business owners also revealed that tax reporting continues to be a source of stress, with 80% of those surveyed in Queensland citing it as a stressful task.
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