Small businesses bullish over tax cuts
A majority of small business owners are optimistic about the federal government’s decision to reduce company tax rates as the financial year draws to a close.
The MYOB SME Snapshot found that up to 44 per cent of small businesses plan to invest these savings back into their business.
Small businesses with a turnover of less than $10 million will see their corporate tax rate cut to 27.5 per cent from 30 per cent, while businesses with a turnover of less than $2 million will pay 28.5 per cent.
Almost half of SMEs are planning to use the extended $20,000 instant asset write-off, despite 78 per cent of owners not fully understanding the tax break.
“SMEs are very aware of policy changes and the significant impact they can have on their businesses, especially during end of financial year, but I’d always recommend that if they have any questions or uncertainty that they talk to their accountant,” MYOB chief executive Tim Reed said.
The research also revealed that 41 per cent of SMEs are planning to complete their tax returns themselves, up 36 per cent from last year.
“The increase in the number of operators taking on their own year-end tax preparation is likely a reflection of the uptake of cloud accounting,” Mr Reed said.
“Over the last 12 months, we’ve seen businesses embrace online accounting solutions, which makes these year-end tax burdens far less onerous than older, desktop software.”