Taxation

Small business needs certainty

Emily Carter — Fri, 17 May 2024 06:20:51 +0000

Small business needs certainty Emily Carter Fri, 05/17/2024 - 16:20

17 May 2024

The Australian �Թ�� and Family Enterprise Ombudsman, Bruce Billson, is urging Federal Parliament to give certainty to small business about two crucial tax breaks announced in last year’s budget.

“Time is running out with just six weeks until the end of the financial year for small business to claim these deductions, but they still don’t know if they’re allowed to make the claims,” Mr Billson said.

“We’re hearing from confused small businesses who just want certainty.”

“I encourage the Parliament to act swiftly to guarantee these small business tax incentives.”

The two measures relate to the instant asset write-off and a tax-incentive for energy efficiency upgrades.

The legislation would set the instant asset write-off at $20,000 for businesses with a turnover of up to $10 million, allowing them to deduct up to that amount for eligible assets between 1 July 2023 and 30 June 2024.

(The Treasurer announced in this week’s budget the scheme would be extended to 30 June 2025.)

Without legislation authorising the change, small businesses can only write-off $1000 for eligible assets and then apply general depreciation rules.

Similarly, the small business energy incentive worth up to $20,000, announced in April 2023 ahead of last year’s budget, will provide an additional 20 per cent depreciation for eligible assets that support electrification and more efficient use of energy by small businesses.

The bonus will be available to businesses with an annual turnover of less than $50 million and is aimed at helping them save on energy bills by making investments like electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

“The scheme requires eligible assets or upgrades to be first used or installed ready for use between 1 July 2023 and 30 June 2024, but with the legislation still not passed time is fast running out for small businesses to meet that deadline,” Mr Billson said.

“This uncertainty has highlighted the need for predictability and certainty so a small business can plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business.

“Right now, we need to be energising enterprise. We need to be giving more encouragement for people to turn an idea into an investment and to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success of that enterprise and the livelihoods that depend upon it.

“Having that encouragement to invest in new kit, new plant and equipment, new technology is really an important signal, but what’s needed is the certainty that these tax breaks are real.”

The instant asset write-off is an ongoing incentive with the amount and threshold set each year. The energy incentive is a one-off scheme that ends in six weeks.

Concerned small businesses should seek advice from their accountant, bookkeeper, tax agent or trusted adviser and refer to ato.gov.au for more information.

MEDIA CONTACT: 0448 467 178

Ombudsman praises ATO small business independent review service

admin — Fri, 10 Dec 2021 04:06:29 +0000

Ombudsman praises ATO small business independent review service admin Fri, 12/10/2021 - 15:06

26 March 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson has welcomed the ATO’s decision to turn its small business independent review service into a permanent offering, following a highly successful pilot program.

Mr Billson says the ATO’s now permanent independent review service provides small businesses with a timely, free and fair dispute resolution pathway.

“I congratulate the ATO for taking a proactive approach with this commitment to help resolve small business tax disputes,” Mr Billson says.

“The ATO has acted quickly to implement a key recommendation in our recently released report: A tax system that works for small business which will help support small businesses when they disagree with an ATO audit position.

“This ATO decision is a substantial step in the right direction in ensuring small businesses are given a fair go.

“More than 180 small businesses who participated in the pilot program reported the process was fair and independent, irrespective of the outcome, so we welcome the ATO’s move to lock in this service permanently.

“The ATO’s small business independent review service is a crucial part of ASBFEO’s vision of a tax system that works for the small business sector, so businesses can achieve greater productivity, return to profitability and grow employment.

“This ATO service marks an important contribution to a supportive environment which is needed now more than ever as small businesses recover from an incredibly tough 12 months.”

Small businesses engaged in a tax dispute are encouraged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au.

30% tax offset a game-changer for Australian industry: Ombudsman

admin — Fri, 10 Dec 2021 03:52:01 +0000

30% tax offset a game-changer for Australian industry: Ombudsman admin Fri, 12/10/2021 - 14:52

06 May 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson has welcomed the Australian Government’s $1.2 billion investment in the nation’s digital future, including the 30% tax offset for the video game industry.

Mr Billson says the investment will encourage greater digital adoption by small and family businesses, to ensure they are globally competitive.

“This significant investment will support small business growth and go some way to unlocking the commercial gains that can be made through digitisation,” Mr Billson says.

“Many small businesses have adopted better use of mobile and internet technologies as a result of the COVID crisis and these announced support measures will help that trend continue. Being digitally engaged has been very important for businesses, particularly in regional and rural areas, to continue delighting customers at a time of pandemic-related disruptions.

“In reality, digitisation is now vital to being truly competitive. That means everything from having a website, to being e-commerce enabled, using apps to improve business efficiency and targeting customers through social media platforms.

“SMEs with advanced levels of digital engagement are 50% more likely to grow revenue and earn 60% more revenue per person, according to MYOB research.

“We welcome the Australian government’s commitment to help SMEs build their digital capacity and drive business up-take of e-invoicing.

“With 1.2 billion invoices exchanged in Australia every year, making the switch to e-invoicing would add an estimated $28 billion to the Australian economy over 10 years. For SMEs, we know e-invoicing streamlines productivity and improves cash flow with reduced admin and faster payments.”

Mr Billson particularly welcomed the support provided to the Australian video game industry, which is comprised of many high growth potential small businesses and start-ups.

“My office has been a vocal supporter of the Interactive Games and Entertainment Association (IGEA) which estimates Australia could create a $1 billion industry in game development, providing export revenue and employing an additional 10,000 full time workers with the right support,” Mr Billson says.

“This 30% tax offset is an excellent support measure to help Australian video game producers take a greater share of the $250 billion global game development market.

“Ultimately this investment, which forms part of the Australian Government’s Digital Economy Strategy, will help make Australia the best place to start and grow a business.”

New rules to ensure small businesses in dispute with ATO get a fairer go

admin — Fri, 10 Dec 2021 03:49:02 +0000

New rules to ensure small businesses in dispute with ATO get a fairer go admin Fri, 12/10/2021 - 14:49

10 May 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson says small businesses in dispute with the ATO will get a fairer go, under new rules proposed by the Australian Government.

Mr Billson welcomed the pre-Budget announcement, giving the Administrative Appeals Tribunal (AAT) greater powers to pause or change debt recovery actions applying to a small business in dispute with the ATO.

“Small businesses disputing an ATO debt in the AAT will get a fairer go by stopping the ATO from relentlessly pushing on with debt recovery actions against a small business, while the case is being heard,” Mr Billson says.

“I commend the government which has acted quickly to implement a key recommendation in our recently released report: A tax system that works for small business which will allow small businesses to pause ATO debt recovery actions until their case is resolved by the AAT.

“Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system. This can be prohibitively expensive and time consuming for a small business.

“Under the proposed changes, small businesses can save thousands of dollars in legal fees, not to mention up to two months waiting for a ruling.

“In line with the recommendations in our report, the AAT will be able to pause or modify any ATO debt recovery actions, such as garnishee notices, interest charges and other penalties until the dispute is resolved by the AAT.

“It means that rather than spending time and money fighting in court, small business owners can get on with what they do best – running and growing their business.

“These proposed changes follow the ATO’s decision to turn its small business independent review service into a permanent offering.

“ASBFEO’s tax concierge service and ongoing advocacy work has led to substantial tax administration improvements for SMEs, with leadership from ATO Deputy Commissioner �Թ�� Deborah Jenkins and government support.

“Collectively, these changes align with ASBFEO’s vision of a tax system that works for the small business sector, so businesses can achieve greater productivity, return to profitability and grow employment.”

The new powers for the AAT will be available following Royal Assent of the legislation.

Small businesses engaged in a tax dispute are encouraged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au .

Budget paves way for small business-led national economic recovery

admin — Fri, 10 Dec 2021 03:43:58 +0000

Budget paves way for small business-led national economic recovery admin Fri, 12/10/2021 - 14:43

11 May 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson says the Federal Government’s 2021 Budget is a clear acknowledgement that small and family businesses are central to the nation’s economic recovery and future prosperity.

The Budget includes several new, extended and enhanced measures to support small businesses including:

$129.8 million to encourage entrepreneurship through the New Enterprise Incentive Scheme (NEIS) and Entrepreneurship Facilitators Program
$1.2 billion investment in the digital economy
$10 billion guarantee of reinsurance pool to cover cyclone and flood damage across Northern Australia
$506 million extension of federal government’s JobTrainer program
$10 million over four years on small business deregulation agenda
$11 million over three years for national recognition of occupation licences
Tax system reform for small business
Targeted support for small businesses impacted by Covid
$4.3 million to establish the Mandatory Franchise Disclosure Registry
$2.6 million to improve access and awareness of Commonwealth procurement opportunities

“Tonight’s budget represents a substantial financial and strategic commitment to making Australia the best place to start, grow and transform a business,” Mr Billson says.

“These measures will support small and family businesses as they help lead our national economic recovery and play a critical role in securing our future prosperity.”

Encouraging Entrepreneurship:

The Federal Government will spend $129.8 million on consolidating and expanding small business and entrepreneurial services to support people who want to start, run and grow their own business.

“This initiative will help put the wind in the sails of fledgling small businesses and encourage the Australian entrepreneurial spirit,” Mr Billson says.

“The number of New Enterprise Incentive Scheme (NEIS) places will lift from 8,600 to 12,000 per year for people looking to create their own start-up livelihoods.

“It will also support existing micro-businesses to adjust to changing labour market conditions to ensure these businesses remain viable and resilient to changes in the face of turbulent trading conditions.”

Digital Economy Strategy:

The Federal Government has pledged $1.2 billion towards enhancing the digital economy, including a 30% tax offset for the video game industry.

“This $1.2 billion investment will encourage greater digital adoption by small and family businesses, to ensure they are globally competitive,” Mr Billson says.

“We welcome the Australian government’s commitment to help SMEs build their digital capacity and drive business up-take of e-invoicing.

“$12.7 million will be spent on expanding the Australian �Թ�� Advisory Service Digital Solutions program to reach as many as 17,000 small businesses.”

Mr Billson particularly welcomed the support provided to the Australian video game industry, which is comprised of many high growth potential small businesses and start-ups.

“This 30% tax offset is an excellent support measure to help Australian video game producers take a greater share of the $250 billion global game development market.”

Insurance:

Mr Billson welcomed plans for a reinsurance pool to be backed by a $10 billion Australian Government guarantee to cover cyclone and flood damage across Northern Australia from July 1, 2022.

He says the scheme, which is broadly in line with a recommendation in ASBFEO’s Insurance Inquiry, will make a significant difference.

“This is certainly a welcome step in the right direction when it comes to ensuring essential insurance coverage is accessible to small businesses,” Mr Billson says.

“Our Insurance Inquiry revealed that too many small businesses have been crippled by rising insurance costs and some can’t get it at all.

“A reinsurance pool will go some way to addressing this key barrier for small businesses in Northern Australia.”

Mr Billson says he also recognises barriers still exist for SME insurance coverage in other parts of Australia.

“In the course of our Insurance Inquiry, we spoke to over 800 small businesses – about 12% of those were from Northern Australia,” Mr Billson says.

“That means there are still many small businesses out there experiencing difficulties with accessing necessary and affordable insurance coverage.

“My office is ready and willing to work collaboratively with the government, relevant agencies and the insurance industry towards making essential insurance products affordable and accessible for small businesses across the country.”

JobTrainer:

The JobTrainer program will be extended for another 12 months, as part of a $506 million package to support SMEs to employ apprentices and trainees with a 50% wage subsidy of up to $28,000 per year.

“JobTrainer has proven to be a highly effective incentive for SMEs to take on new apprentices and trainees,” Mr Billson says.

“The cost of apprentices and trainees can be significant as they learn the ropes, so small businesses will welcome the extension of this wage subsidy.

“JobTrainer will also offer thousands of young Australians low-fee or free courses – critically in fields where small businesses are struggling to find staff.”

Deregulation Agenda:

The Federal Government will spend $134 million over four years on its deregulation agenda, including investing in regulatory technology (regtech) to support smaller employers comply with modern awards, provide data on pay and conditions and help with accuracy in payroll software.

“Small business owners are hard-working, time-poor and don’t have the systems or resources needed to deal with onerous compliance requirements,” Mr Billson says.

“Research shows a small business hiring its first worker can spend up to 18 hours getting their head around awards, pay rates, tax, OH&S and record-keeping obligations.

“This government investment in ‘regtech’ is a positive step towards making it easier for small businesses to pay wages and entitlements correctly and on time, recognising how much they value their team.”

$11 million will be invested in the implementation of automatic mutual recognition of occupation licences across states and territories.

“This will help small business tradespeople who want to meet the demand for their skills in different areas of the country,” Mr Billson says.

Tax system reform:

Small businesses in dispute with the ATO will get a fairer go, under new rules proposed in tonight’s budget.

Mr Billson welcomed the pledge to give the Administrative Appeals Tribunal (AAT) greater powers to pause or change debt recovery actions applying to a small business in dispute with the ATO.

“Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system. This can be prohibitively expensive and time consuming for a small business.

“Under the proposed changes, small businesses can save thousands of dollars in legal fees, not to mention up to two months waiting for a ruling.

“In line with our recommendation, the AAT will be able to pause or modify ATO debt recovery actions, such as garnishee notices, interest charges and other penalties until the dispute is resolved.

“It means that rather than spending time and money fighting in court, small business owners can get on with what they do best – running and growing their business.”

Small business tax rate:

The small business company tax rate will reduce from 27.5% to 26% in 2020/2021 income year and 25% in the 2021/22 income year.

Employee Share Scheme:

The Government will help Australian businesses to attract and retain staff by removing cessation of employment as a taxing point for the tax-deferred Employee Share Scheme (ESS) and reducing red tape for ESS.

Instant Asset Write-Off:

Small businesses can continue to write-off the full value of assets purchased until 2023.

“This one year extension of the uncapped instant asset write-off is a big win for small businesses,” Mr Billson says.

“It gives small businesses more time and certainty to plan and buy major equipment. It significantly reduces the need for depreciation and cuts red tape.”

Loss Carry Back:

“The loss carry back provision will also be extended to June 2023,” Mr Billson says.

“This is a tax initiative that effectively allows a small business to carry back tax losses from 2022/23 income year to offset previously taxed profits as far back as 2018/19, to support business recovery.”

Targeted support:

For small businesses in sectors that continue to struggle as a result of Covid, the Australian Government has announced targeted support for the aviation, tourism and arts industries.

This includes funding of $1.2 billion over four years for measures such as subsidising the cost of airfares to tourism regions.

$162 million has also been allocated to the arts sector to support events, productions and the film and television sector.

Payment times:

The Government is committing an additional $16 million to ensure effective implementation of the Payment Times Reporting Scheme, which has been in effect since 1 January, 2021.

“This reporting framework requires big business to be upfront and honest about the time it takes to pay their small business suppliers,” Mr Billson says.

“Cash flow is king for small business and we know that if small businesses are paid on time, the whole economy benefits. AlphaBeta estimates if large businesses pay small businesses in 30 days, the net benefit to the economy is $313 million per year.”

Mandatory Franchise Disclosure Registry:

A Franchise Disclosure Registry is set to be established at a cost of $4.3 million. The registry will require franchisors to lodge disclosure documentation about their franchise annually.

“This is about improving transparency of franchise operations and providing prospective franchisees with vital information they need before entering into a franchise agreement,” Mr Billson says.

“My office has advocated for the implementation of this registry as a key component of effective due diligence all prospective franchisees should undertake before entering into a franchise agreement.”

SME procurement:

The Australian Government will provide $2.6 million over 4 years to support and strengthen SME participation in procurement, including mapping common pain points for SMEs.

Budget Snapshot

�Թ�� and Family Enterprise Ombudsman backs tax report

admin — Fri, 10 Dec 2021 02:38:15 +0000

�Թ�� and Family Enterprise Ombudsman backs tax report admin Fri, 12/10/2021 - 13:38

14 October 2021

The Australian �Թ�� and Family Enterprise Ombudsman, Bruce Billson, has strongly backed a call from the Inspector-General of Taxation for the Australian Taxation Office to more consistently and transparently inform taxpayers of their right to review, complain, and appeal decisions.

“This is a significant investigation and report by the Inspector-General of Taxation and Taxation Ombudsman, Ms Karen Payne, and the findings and recommendations are really important for delivering a better and fairer tax system,” Mr Billson said.

“Tax issues are among the top concerns for small businesses, and it is critical for the Tax Office to step up as a modern revenue agency to help people as part of their Charter.”

Ms Payne’s report called for the Tax Office to update the Taxpayers’ Charter to include an express right to be informed of rights to review, complain and appeal decisions and to be told about all relevant channels to do so.

The report found over the past three years fewer than 1 per cent of Tax Office staff had attended a training course to teach them how to tell taxpayers about their rights to complain, review or appeal a decision and a survey found 60 per cent of taxpayers were unaware of or had not used the Tax Office’s complaints function.

“I am pleased the Tax Office has embraced this report from the Inspector-General and has committed to working through these important recommendations,” Mr Billson said.

“I look forward to seeing the Tax Office implement these changes to improve the way it deals with taxpayers.”

The ASBFEO has released several reports outlining measures to improve the tax system for small business, especially around the vital need to tell taxpayers about their opportunities to complain about or have a decision reviewed.

Since March 2019, more than 650 small businesses have sought the help of the ASBFEO’s �Թ�� Tax Concierge Service - a team of specialists and case managers who respond to requests for assistance from small business who receive a negative decision from the Tax Office.

For further information about the Concierge Service call 1300 650 460 or email info@asbfeo.gov.au

Media contact: 0448 467 178

Ombudsman urges small businesses to get on the front foot at tax time

Toby — Thu, 02 Dec 2021 02:19:32 +0000

Ombudsman urges small businesses to get on the front foot at tax time Toby Thu, 12/02/2021 - 13:19

30 June 2021

The Australian �Թ�� and Family Enterprise Ombudsman Bruce Billson has urged struggling small and family businesses to be proactive at tax time, as a new report reveals declining payment plans despite record collectible debt owed to the Australian Taxation Office (ATO).

Mr Billson says the report, released today by the Inspector General of Taxation and Taxation Ombudsman (IGTO), shows that although SMEs owe $21 billion to the ATO – well over half of this collectible debt is held by just 6.4% of SMEs.

“The vast majority of small business owners are doing the right thing and complying with their tax obligations,” Mr Billson says.

“This report shows that while collectible debt owed by small businesses to the ATO has reached an all-time-high, in reality the breakdown sees the majority of debt owed by very few SMEs while the remainder is very small amounts of debt spread over a small percentage of Australia’s more than 2 million SMEs.

“In fact, less that one per cent of small businesses owe $2.5 billion to the ATO, according to the IGTO’s report.”

Mr Billson says the reported decline in small business payment plan arrangements over the past three years is a concern.

“For those small businesses that are struggling to meet their tax obligations, now is not the time to put your head in the sand,” Mr Billson says.

“Small businesses are strongly encouraged to get on the front foot by lodging now and reaching out to the ATO – either online or by phone - for a tailored payment plan, if having difficulties meeting payment obligations.

“The ATO has told my office it is also introducing a system for payment plans in arrears to give small and family businesses a chance to get back on track rather than falling into default and having to start again.

“While the ATO is signalling plans to return to collection action, which it relaxed during the pandemic, it has also indicated to my office that its predominant strategy is to support and assist small businesses wherever possible.

“The ATO has acted on key recommendations in ASBFEO’s report: A tax system that works for small business to turn its small business independent review service into a permanent offering.

“This is in addition to the Australian Government giving the Administrative Appeals Tribunal (AAT) greater powers to pause or change debt recovery action applied to small businesses in dispute with the ATO.”

Small businesses engaged in a tax dispute are encouraged to contact ASBFEO for assistance on 1300 650 460 or email info@asbfeo.gov.au