With June 30 closing in, experts warn thousands of business owners may miss out on tax concessions and run of the risk of paying too much tax as EOFY confusion continues to reign.
A new study by American Express has found the majority of businesses owners are confused as to what tax entitlements are relevant to them. Only 13 percent of participants admitted to being completely up to speed with existing small business tax breaks. The number was slightly higher for businesses who prepared with their tax returns without the help of an accountant, at 21 percent.
American Express head of small business services Jason Fryer said the survey shows many small businesses may be unknowingly missing out on concessions, which could 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.”
According to taxation expert and author Adrian Raftery, one of the most common questions he’s asked by small businesses owners is: ‘Is there something we are missing out on in our tax?’
“This [survey] 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.”
Raftery said that learning what can be claimed doesn’t need to take up a lot of time, and could save businesses significant amounts. Despite this, the survey showed 83 percent of businesses owners see tax reporting as a ‘stressful task’, with 64 percent preferring to do other administration duties, including cleaning out the office fridge.
“End of financial year tax reporting is always going to be an arduous task but there are many ways it can be made easier: use software to help collate receipts and record transactions or use a business charge card to separate business and personal expenses and to provide GST compliant itemisation for ease of reporting,” Fryer added.
Over one quarter (28 percent) of participants said they are confident they can improve their tax reporting with the help of their accountant or a business mentor.
Looking toward the new financial year, the survey uncovered a number SMB owners have new financial year resolutions, which include; improving the efficiency of their tax reporting (78 percent) as well as becoming more organised in filing their receipts and collating information throughout the year (44 percent).
“Even small measures can help make tax reporting more efficient, accurate and less stressful. I encourage all small business owners to stick to their resolution, stay more organised and seek the help of experts when they need it,” said Raftery.
