The decision by the government to repeal the mining tax could negatively impact small business owners who may have to pay back taxes if they placed a return linked with tax support provisions.
As part of the new legislation, the Australian Taxation Office has released schedules for five changes to the Minerals Resource Rent Tax Repeal and Other Measures Act 2014. Schedule 2 states that the abolition of the company loss carry-back dates from 1 July, 2013, signifying that small business will see revisions applied to tax returns put forward in 2013 and 2014.
Peter Strong, Chief Executive of the Council of Small Business of Australia (COSBOA), has expressed his “extreme disappointment” in the decision.
“This shows a lack of understanding of the way small business functions,” he said.
“There is also the issue that the changes take effect half way through a financial year, last financial year, no government should implement changes to the tax system half way through a financial year.”
Small business owners should note that there are to be penalties if payment is not received, but the ATO has stated that affected assessments and taxpayers will not be subject to penalties and interest if payment is made within a reasonable time.
It is not just back taxes that small business should be aware of.
The government has put forward an accelerated initial deduction for small business motor vehicles, lowering the immediately deductible cap of $5,000 for motor vehicles costing $6,500 or more to $1,000 for motor vehicles costing $1,000 or more.
Small business will no longer be able to obtain a tax offset by carrying tax losses (up to $1 million) from the previous year, with the repeal of the mining tax now ensuring that tax losses can only be carried forward for the following year.
