Now that things have somewhat returned to normal after Covid-19 and the natural disasters of the past years, the Australian Government is reining in its tax debt leniency. This means small businesses need to get their act together and prepare for the tax bills as the government tries to recoup the billions now owed to the Australian Taxation Office (ATO).
Small Business Income Tax Offset Program
However, unincorporated small businesses, usually partnership companies and sole traders, may be eligible for business tax relief under the ATO’s Small Business Income Tax Offset program. The business tax relief provides small businesses with a tax offset of up to $1000 per year. The offset is calculated on the proportion of tax payable on an unincorporated small business income.
Anyone who has been in business since 2015, when it was first introduced, would know about this small business tax relief, but changes were made in the 2021/2022 financial year to the rate of the offset.
Changes to the Business Tax Offset Program
While the amount of $1,000 has not changed, the aggregated turnover threshold went from less than $2 million in the 2015/16 tax year to less than $5 million in 2019/20 and has not changed. But the good news is the rate of the offset has risen from five per cent in 2015/16 to 16 per cent in the 2021/ 2022 tax year.
How Tax Negotiators Can Help
Engaging the professional financial advisors at Tax Negotiators can ensure your business takes full advantage of the business tax relief program. If you need our professional advice, you’re in financial difficulty, have existing debts with the ATO and want to arrange a debt settlement, we can help. To bring you some relief from your financial hardship, we can negotiate a business debt management plan or debt consolidation on your behalf so you can get back on track, continue trading and operate debt-free.
Business Debt Relief Options
The ATO often changes the tax deductions it allows, and some can be rather substantial. At Tax Negotiators, depending on your financial position, we can help you gain business tax relief if you have unsold or unsellable stock due to floods, bushfires or the pandemic.
Other business debt relief options include claiming the correct tax relief on business mileage, tax relief on business cars, business loans, and accessing all the tax concessions you are eligible to claim. A range of tax concessions is available for fringe benefits tax, capital gains tax, GST, PAYG and income tax.
You may be eligible for a small business tax deduction for fees and interest charges that come with a business loan and unpaid invoices. You may also qualify for business tax relief on charitable donations.
Other Business Debt Relief Programs
One way to keep your business finances healthy and keep the debt collector from your door is to take advantage of the instant asset write-off program, now called the ‘temporary full expensing’ scheme. Under the scheme, you can write off the full amount of an asset in the financial year you bought it.
The Government has changed the scheme to allow businesses to write off used equipment purchases and the cost of improving an existing asset in the year the work was completed.
The Assets Eligible For Temporary Full Expensing
Under the temporary full expensing/instant asset write-off program in 2022, your business may claim the full cost of an asset in the year you purchased it and had it delivered and installed. The assets include:
- Shop and office furniture.
- Laptop computers, desktops, monitors and printers.
- Air conditioners.
- Equipment and machinery.
- Motor vehicles.
- Signage.
- IT hardware.
- Kitchen equipment
Businesses That Qualify
Under prevailing rules, active Australian businesses with an Australian Business Number (ABN) are eligible if their total annual business turnover is under $5 billion.
The eligible businesses include companies, sole traders, partnerships, and trusts. Also, businesses whose annual revenue is below $50 million can claim a deduction for the purchase of second-hand assets.
Call Tax Negotiators Today
Get in touch with our Tax Negotiators team so we can arrange for a no-cost consultation and provide you with free and confidential advice. We’ll discuss your company’s financial situation and how you’re managing debt, including your tax debts, dealing with money owed, non-paying customers, and how to fix common debt problems.
If the ATO has begun legal proceedings, we can explain the legal process and bankruptcy and negotiate on your behalf. We can put you in touch with the free national debt helpline for business.
Our qualified financial advisor will answer any questions you may have about your circumstances, our services, your formal insolvency options, and voluntary administration if it comes to that. By the end of our meeting, you’ll know exactly what your options are and what will happen next with regard to business tax relief and business debts.
Contact us at Tax Negotiators today at 1300 277 148 or email help@taxnegotiators.net.au. Act now.