Bruce Billson, the Small Business and Family Enterprise Ombudsman, has come out with a message for brokers as one financial year ends and another begins.
A recent report from the Australian Tax Office (ATO) suggested that the SME sector owed $21 billion in back taxes, with over half of it coming from just 6.4% of small businesses.
“It’s gut-wrenching to see so many small businesses adversely affected by lockdowns and COVID-constrained trading conditions,” he told Australian Broker.
“But it’s not the time to ignore your tax obligations. It’s clear that the tax office has announced that it’s prepared to work with small businesses that may be having some difficulties meeting their obligations.”
“My encouragement is: ‘don’t put your head in the sand’. There’s lots of events unfolding around you but make sure that you’re on the front foot with your dealings with the tax office.”
“Certainly, lodge in a timely way, and then if there’s difficulties meeting any tax obligations beyond that, talk earlier with your advisor and the tax office to see what payment plan arrangements would be satisfactory for the business and also demonstrate to the tax office that there’s an acknowledgement and respect for those tax obligations.”
While there are obviously many commercial brokers and asset finance specialists who deal directly with the SME sector, many brokers of all types are themselves small businesses. While mortgage brokers have been run off their feet this year, it is vital that they make time in their schedule for their tax affairs.
“Prior to me taking on this role, I was in a similar place to many brokers, in that I ran my own small business,” added Billson. “I knew that if I left my tax reporting obligations to the last minutes, I had a world of documentation, electronic files and evidence to compile to lodge my BAS and my tax return.”
“What I’ve learned is that it’s so important to keep good records as a matter of course. I used to update my records at the end of every month, as a rolling piece of work, so that it didn’t consume the entire weekend but maybe just a Sunday morning.”
“Tech can be very helpful, not only in servicing customers but also in running your own business. There are so many apps and cloud-based accounting tools that can be great billing platforms but also do a lot of the backend work. And stay in touch with your tax or business advisors, just so you’re aware of new opportunities and things that are changing in the tax environment.”
