Small businesses expect healthy tax return but confused over new rules

The report by Lonergan Research surveyed 1,475 Australians aged 18+ including 500 small-business owners between April 11-27 and the data was then weighted against the latest population estimates from the Australian Bureau of Statistics.

Although small-business owners think they may get a healthy tax return, the survey also showed that nearly 75 per cent of them find the tax system confusing and 63 per cent are still concerned about their ability to grow their business in the current economic climate.

And one of the most confusing aspects of the tax system was the instant asset write-off with more than half (54 per cent) assuming they could no longer claim the $150,000 “Instant Asset Write-Off” that was extended in the May federal budget.

Additionally, one in four (27 per cent) business leaders weren’t aware they could be eligible for the ‘Temporary Full Expensing” concession to claim immediate deductions on depreciating assets first used or installed before 30 June.

Officeworks general manager merchandise, Jim Berndelis said when Australians were required to work from home during the pandemic, many employees borrowed equipment from the office.

“As they have returned to their office in a flexible capacity, we have seen employers updating their office equipment such as ergonomic chairs, monitors and computer accessories,” he said.

“We’re also seeing products such as mobile phones, cables and charging devices continue to be popular to ensure staff can stay connected no matter where they are working. As we approach June 30, we recommend small business leaders consult their taxation professional to ensure they are making the most out of the incentives and capitalising on tax-deductible upgrades.”

The report also found that in line with workers returning to the office, almost a quarter of small businesses have increased their year-on-year spending on office supplies, furniture or assets.

According to the report the average small business plans to spend $17,000 before 30 June in order to utilise the depreciation concession.

Although more staff are returning to the office, the report also found that 60 per cent of small-business leaders expect their staff to work from home some, if not all, of the time ongoing with more than half (53 per cent) supporting work-from-home/anywhere set-ups regardless of whether they expect staff will return to the office or not.

Almost three out of 10 (28 per cent) of small business leaders work in a fully remote business now and don’t expect their staff to return to working on premises again while a quarter (26 per cent) believe that a hybrid working situation is the way of the future so they will be investing in setting up home offices.

Three-quarters of small businesses stated that they will support remote work set-ups regardless of whether they expert staff to return to the office or not that means there is a unique opportunity for business leaders to claim more through the comprehensive temporary full expensing concession.

Taxation manager, Rebecca Morgan on behalf of the National Tax and Accountants’ Association (‘NTAA’) said small and medium-sized businesses across the country should be taking advantage of tax-related COVID-19 relief measures and depreciation concessions currently implemented by the Australian Government.