The Government on Tue 20.1.2015, released the Board of Taxation’s report on taxation impediments to the success and growth of small business and the Government’s response to that report. The Board had provided its report to the Government at the end of August 2014.
The Government says it wants to simplify small business’ interactions with the tax system and make Australia one of the best places to start and grow a business. The report focused on short and medium-term priorities for small business tax reform with a particular focus on simplifying processes and cutting excessive red tape.
Board recommendations included:
- that the ATO revise Miscellaneous Taxation Ruling MT 2006/1 and other guidance material to include activities which will evidence that an applicant is intending to carry on an enterprise and is therefore eligible for an ABN;
- that the ATO review its employee/contractor tool;
- that the ATO should continue to develop a prototype online decision tool re the PSI rules;
- that the ATO, and its relevant advisory groups, review whether the quarterly reporting obligations for small businesses could be significantly simplified;
- the alignment of the 21 July Taxable Payments Reporting System (TPRS) reporting date with the 28 August BAS lodgment date (to the latter date);
- that the small business entity turnover threshold be increased to at least $3m and investigate the feasibility of an increase to $5m;
- an increase to the “minor and infrequent” FBT threshold from $300 to, at least, $500.
Among other things, the report also noted that superannuation penalties can be harsh, with disproportionate outcomes. The Government said it will ensure that penalties for employers who inadvertently pay their superannuation guarantee late or short pay their employees’ contributions by a small amount reflect the nature of the breach. These changes will take effect from 1 July 2016.
The Small Business Minister and the Assistant Treasurer said the report will also be an important input to the Government’s broader considerations on small business taxation and is particularly timely ahead of the Government’s release of its Tax White Paper.
[LTN 12, 20/1/15]