SMALL BUSINESS FALLING FOR TAX MYTHS

Written on the 21 June 2013

SMALL BUSINESS FALLING FOR TAX MYTHS

SMALL businesses risk substantial losses and penalties by the Australian Tax Office due to long-held tax myths and a lack of understanding around reporting requirements.

American Express recently conducted a survey of more than 1000 small businesses and found that the understanding of tax reporting requirements varies enormously depending on the length of time in business and the type of business.

According to the research, 57 per cent of Queensland small business owners have no idea about the write-offs that home-based businesses can claim for equipment purchases, and 43 per cent are in the dark when it comes to tax-breaks for asset purchases under $6500.

Over 60 per cent believe that businesses with a turnover greater than $50,000 are required to register for GST, despite the threshold changing to $75,000 in 2007.

Around 45 per cent of Queensland business owners believe they are entitled to claim more than they are allowed to or else have no idea about the tax deductions they can legitimately claim for entertainment expenses.

“Knowing your obligations and knowing what to claim and what not to claim is the key, however there exist some long-held misconceptions based on tax myths that continually trip business owners up,” says tax author Adrian Raftery.

“When operating a home-based business it is important to keep clear and separate records of expenses that relate to the running of the business, and not to confuse them with the everyday expenses related to running a household.

“Business owners should be getting their advice from credible sources, and if in doubt, they can always ask the ATO. Contrary to popular belief, asking the ATO for clarification does not put the owner on a ‘watch list’, it only serves to ensure they don’t make a mistake in the first instance.”


Latest News

PROFIT BOOST FORECAST AT VILLA WORLD

VILLA World has forecast profit growth of 5 per cent in the first half of FY17 in an earnings guidance released to th...

WP CURVE SOLD TO GODADDY

NASDAQ-listed tech company GoDaddy has bought Gold Coast's WP Curve for an undisclosed sum.

The subscription-b...

BOARD SHAKE-UP TAKES OUT SURFSTITCH FOUNDER

ONLINE actionwear retailer SurfStitch Group (ASX: SRF) has announced a major board shake-up in a move that effectivel...

ORIGIN TO DIVEST UPSTREAM OIL AND GAS BUSINESS

ORIGIN Energy will spin off its upstream oil and gas business in an as-yet unpriced IPO.

It will allow the Sydney-...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter