Small business owners are passionate about what they do. They are determined to achieve their vision for their business which can mean that dealing with finances, taxes and reporting is often seen as an unpleasant afterthought or interruption to precious family time.
Most small businesses recognise that accountants are trained and skilled at financial record keeping, tax returns and annual accounts. Using an accountant provides both time and administrative savings to small businesses, freeing up small business owners to concentrate on what they love – their business and family.
However Scottish Pacific research shows that accountants are often not used to assist small businesses with cash flow management, staff hiring decisions, major acquisitions or the sale of business assets. Yet, particularly in these times of financial uncertainty, this is the help and information that small businesses need the most.
A range of financial assistance is available at Federal, State/Territory and Local Government levels. Chartered Accountants Australia and New Zealand (CA ANZ) is a professional body that provides continuing professional development, helps members navigate changes in the accounting and financial landscape and advocates in the public interest.
This continual learning ensures Chartered Accountants know how to help you understand the cash flow impacts of the current COVID-19 crisis and can help business owners undertake scenario planning.
Many of the immediate steps that you can take to assist your business requires you to work with your accountant to obtain them. For example, if you are having trouble working out how you can fund current year tax payments, your accountant can help you vary your pay-as-you-go-instalment to zero to reduce your current and future income tax liabilities and help you obtain a tax refund for tax that you have already paid in relation to this year.
Accountants can also ask for a 4-month deferral for of tax payments that are payable due to a Business Activity Statement (BAS), Fringe Benefit Tax or income tax assessment or excise obligations.
If cash flow issues are affecting your ability to pay existing tax debts then your accountant can help you negotiate, or re-negotiate, payment plans with the Australian Taxation Office.
For employers, the Government has announced that many small to medium sized businesses may qualify for a tax-free benefit equal to 100% of the amount withheld from employees’ salary and wages. But you need to lodge your BAS to access this benefit – which your accountant can help you do.
The Government has also passed legislation that allows employers and self-employed people that have experienced a 30% reduction in turnover to access a $1,500 fortnightly JobKeeper payment for each eligible employee to help subsidise the cost of wages. GST concepts are used to determine turnover and there are a number of rules regarding who is an eligible employee along with regular reporting requirements that your accountant can help you understand.
The State/Territory Governments have introduced a variety of measures to assist businesses retain employees, such as temporarily waiving payroll obligations, increasing payroll tax threshold, introducing apprenticeship rebates and providing interest free payroll tax deferrals. Your accountant will be on top of these changes and can advise you on what needs to be done to obtain such benefits.
If your business is busily acquiring assets to assist its employees work remotely, then your accountant can help you determine whether you can qualify for an instant asset write-off which provides for a 100% deduction for the asset when it is installed ready for use or the “backing business investment” deduction which provides for a 50% deduction for an asset.
If you are at the other end of the business cycle and are looking to exit your business, then talking to your accountant could be financially lucrative. There are a number of capital gains tax (CGT) concessions for small business which are looking at selling business assets. Most businesses which utilise the small business CGT concessions received benefits of up to $250,000. These concessions are complex but are worth exploring, especially if you are looking to top up your superannuation.
Bottom line is – talking to you accountant is essential first step for any business to take to ensure that you weather the storm in these difficult times.
By Susan Franks*
*Susan Franks is Senior Tax Advocate at Chartered Accountants Australia and New Zealand. Find a Chartered Accountant to help your business here