Here’s an overview of the some of the regulatory changes that could impact your business and some warnings from the Tax Office.
Rethink your business tax return strategy with the ‘debt levy’
The new ‘debt levy’ will directly hit many small businesses, particularly those that are unincorporated – which comprise up to 70% of small businesses – according to tax experts. The new tax kicks in at an annual income threshold of $180,000 but the impact of an increased tax for small businesses represents something of a double whammy for owners as many of them are unincorporated, not subject to the planned reduced company tax rate and still exposed to personal tax rates – and subsequently, the debt levy. Taxpayers Australia’s head of tax, Mark Chapman, advised small businesses to delay paying bills as long as possible and move as many tax deductions as possible into the new financial year in order to maximise relief at the new higher tax rates.
Businesses welcome Small Business Ombudsman
Businesses are applauding the transformation of the Australian Small Business Commissioner into a Small Business and Family Enterprise Ombudsman. The Ombudsman will mainly function as a:
- mediator for small business dispute resolution
- national advocate for small business and family enterprises
- contributor to the development of small business-friendly laws and regulations, and
- single entry-point agency through which national assistance and information regarding small business can be accessed.
Tax Office homes in on businesses in the cash and hidden economy
The Tax Office has warned errant businesses and individuals that its data-matching program is becoming increasingly sophisticated, as it collects information from banks, government agencies and industry suppliers on purchases of major items such as cars and real estate. “We compare this information with the income and expenditure that businesses and individuals have reported to us. These comparisons allow us to identify businesses that are potentially skimming some or all of their cash takings, running part of their business off the books, or in other ways are not reporting all their income,” the Tax Office said.
Common BAS errors revealed
The Tax Office said businesses could avoid some common errors on business activity statements (BAS) by:
- reviewing activity statements before lodging
- checking that all tax invoices are valid
- checking that expenses and sales are for the current tax period, and
- checking that invoices are only entered once.
ACCC takes action against businesses that made false carbon tax representations
The Australian Competition and Consumer Commission’s (ACCC) proceedings against Actrol Parts should serve as a cautionary tale to businesses overinflating the effect of the carbon tax on their prices. ACCC contended that the refrigerant gas wholesaler made false or misleading representations and engaged in misleading or deceptive conduct when it implemented significant increases in the price of certain types of hyrdofluorocarbon (HFC) refrigerant gas from July 1, 2012. ACCC chairman Rod Sims said he believes Actrol was simply amassing a stockpile of HFC refrigerant gas prior to the introduction of the carbon tax, and that the price increases were implemented to increase margins and achieve a significant one-off benefit to earnings.