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Despite the positive economic picture painted by government, many owners are struggling, says CA ANZ.
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Stressed small businesses still contending with pandemic hangover
08 June 2022
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11 minute read
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Small businesses face an uphill financial and emotional struggle regardless of a positive post-pandemic outlook, said CA ANZ’s tax leader Michael Croker.
“Despite all the federal election talk about how well the Australian economy has performed, there are some local businesses where restructuring or even insolvency is also on the agenda in discussions with accountants,” he said at CA ANZ’s annual Northern Territory forum.
Clients were concerned about the ATO’s resumption of tax debt collection as well as meeting business finance and commercial rent obligations.
Speaking at the Darwin event, Mr Croker said CA ANZ members were telling him some small-business clients were struggling and “it’s not just about the dollars”.
“Some small business operators are suffering from stress and need support from their accountant, other service providers like Beyond Blue and most importantly family and friends,” said Mr Croker.
Mr Croker said that the stress that small businesses were facing should be addressed in a similar way to COVID.
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“Most people think of COVID when the topic of healthy workplaces comes up, but within the territory’s CA community, there is also great concern for the well-being of some small business clients still struggling to emerge from COVID,” said Mr Croker.
On a lighter note, forum attendees provided some of the more unusual attempts at tax time deductions they had received.
They included a new 12-metre swimming pool claimed as emergency water storage, a proportion of groceries because it was expensive to live in the NT, and post-lockdown family reunion flights claimed as business trips.
Mr Croker said while territory accountants saw several creative claims each year, the ATO would look sceptically at deductions of doubtful authenticity.
“Honesty is the best policy when dealing with both your accountant and the ATO,” he said.
“The income tax law contains substantiation rules which the ATO can call for if a deduction looks suspicious.”
Mr Croker also told the forum what he believed the ATO would be concentrating on this tax time.
“Work from home deductions, claims for face masks and rapid antigen test kits will be a big focus this year,” Mr Croker said.
“The ATO says it will also be out and about on cryptocurrency, acknowledging that many Australians have been on a roller-coaster of gains and losses during this financial year.”
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