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ATO Provides Tax Time Tips for Small Business

The Australian Taxation Office (ATO) is working to help small businesses get it right this tax time.

Assistant Commissioner Mathew Umina says that “Small businesses in Australia contribute more than $380 billion to the economy each year and are an essential driver of economic growth. That is why the ATO is committed to supporting small businesses and making it as easy as possible for them to understand and meet their tax obligations at tax time”.

Mr Umina has some tips to help small business in the lead up to and during tax


Get your records ready A way to have a stress-free tax time is to keep up-to-date records. Keeping good records will help small businesses to complete and lodge their tax returns, manage cash flow, meet their tax obligations and understand how their business is doing.

“Small businesses need to keep records explaining all transactions that relate to their tax affairs containing enough information to calculate the income, expense and other amounts that must be reported in tax returns,” Mr Umina said.

Consider small business concessions A range of tax concessions could help at tax time. For example, simplified trading stock rules means if the estimate of the difference between opening and closing trading stock is $5,000 or less, the small business doesn't need to do a stocktake.

“There are also concessions that allow new small businesses to claim an immediate deduction for start-up costs like professional, legal and accounting advice,” Mr Umina said.

Small businesses who use simplified depreciation rules can take advantage of the $20,000 instant asset write-off. Remember, to be able to write off the business portion in a 2018 tax return the small business has to buy and install assets that cost less than $20,000 by 30 June 2018.

Check your deductions Most expenses incurred in running a business can be claimed as a deduction. This includes operating expenses, business travel expenses, home based business costs and costs of employing people.

“When working out what business deductions to claim this tax time – it's important to remember the three golden rules. One – the money must have been spent for your business not yourself, two – if you use something for business and private purposes, you can only claim the portion that is related to your business, and three – you need a record to prove it,” Mr Umina said.

Find out if changes apply to you There are a few changes that applied from 1 July, for example employers with 20 or more employees are required to start reporting through Single Touch Payroll, unless they or their payroll software provider have been granted a deferral or they have been granted an exemption by the ATO.

Also, if a small business is registered for GST and imports low value goods for business use in Australia, they may not need to pay GST. They simply need to tell their supplier that they are registered for GST, and provide them with their ABN.

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