Tax time will undoubtedly bring addition stress for small businesses who have already experienced a very rough year to date.
The evolving restrictions and operating constraints, sudden drop in income and government assistance packages have left many businesses grappling with the changing conditions.
For those looking to file their own tax return, the Australian Taxation Office (ATO) has released a tool kit aimed at helping better understand tax related issues through a series of fact sheets tailored to SMEs and with information outlining the tax implications of COVID-19.
Topics covered in the kit include claiming home-based businesses expenses, information for those who have had to pause or close their business due to COVID-19, how to claim motor vehicle expenses and/or travel deductions and the tax implications of using your company’s money or assets as either a director or shareholder of a small business.
ATO Assistant Commissioner Andrew Watson said the ATO appreciated the difficult conditions faced by small businesses and they were on hand to assist with queries around tax and superannuation obligations.
“Many small businesses have had a really difficult few months, and we fully acknowledge this. From bushfires to floods to COVID-19, we know times are tough. Small businesses have a long to-do list, and tax obligations are just one of many items that need to be done,” Mr Watson said.
“We also know that many small businesses rely on and trust the advice of their tax professional. Whether you use a registered tax professional, or lodge your own tax return, we hope our toolkit will be helpful when the time is right to sit down and consider lodging your income tax return.”
“Don’t forget, it’s best to ask for help with your tax if you need it. And it’s never too late to speak with us or a registered tax professional if you aren’t sure about something or need a helping hand.”
And while the 2019-20 financial year may be one many business would rather forget, there is some hope the 2020-21 may be brighter. The federal government has announced that from this financial year, incorporated small and family businesses with a turnover of less than $50 million will have their tax rate reduced from 27.5%o 26%. While unincorporated businesses will benefit from a income tax offset rise from 8% to 13%.