ATO gives tax time tips for SMEs
The ATO has released tips for new small business owners ahead of the end of the financial year, in a bid to help them get a head start on the new year.
Assistant commissioner Deborah Jenkins said that there were a lot of new business owners about to have their first tax time experience due to the thousands of new small business registrations each month.
“We understand that around 50 per cent of small businesses come under financial pressure within the first year, and one of the biggest issues is cash flow,” said Ms Jenkins.
The tax office has compiled five tips for SMEs, namely, staying informed, getting on top of your records, finding ways to make it easier, look after your employees and know where to get help.
- Stay informed
Small business can benefit from being up to date with new measures. For example, the turnover threshold for a wide range of concessions has changed and there’s a lower company tax rate for small business. It is a good idea to work out if your circumstances have changed and see whether you can benefit from the measures before you get into tax time.
- Get on top of your records
Practicing good record keeping will ensure easier management of cash flow, meeting your tax obligations and understanding how your business is doing, making tax time less stressful because you will have all the information needed on hand.
You can use your records to compare yourself against the ATO’s small business benchmarks and check how your business is performing against similar businesses in the same industry.
- Find ways to make it easier
The ATO has a range of products and tools to make it easier for small businesses to stay on top of their tax and super obligations. For example, you can do most of your business reporting and transactions with the ATO online, so it’s a good idea to familiarise yourself with the ATO website to see where you can save yourself time.
If you are sole trader, you can lodge your returns using a registered tax agent or myTax. For the first time this year, sole traders can also use the myDeductions tool in the ATO app to keep track of your business expenses.
From 1 July 2017, goods and services tax (GST) reporting on the business activity statement (BAS) will be easier with Simpler BAS. Small businesses will be required to report less GST information, which will reduce the complexity of bookkeeping and reporting, saving you time and money.
- Look after your employees
Meeting your deadline for your employer obligations, including your employee’s payment summaries and superannuation guarantee payments will be crucial.
You need to issue payment summaries to employees by 14 July and you need to lodge your PAYG withholding payment summary annual report to the ATO by 14 August.
You should also make sure you know if your workers are employees or contractors because this can affect your obligations
- Know where to get help
Around 95 per cent of small businesses use a registered tax professional to lodge their returns, so it’s likely that your agent will be your first port of call.
The ATO has trained more than 4,000 staff to be able to assist small business owners who are dealing with difficult circumstances, including those who are managing mental health issues.
If you have a debt that you can’t pay on time, you might even be able to organise a payment plan online.