Login
iscover
The small business tax discount should be increased, alongside sped-up income tax cuts and a loss carry-back scheme, says one accounting body.
Newsletter
Government urged to raise tax offset cap for small-business owners
06 October 2020
•
11 minute read
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Institute of Public Accountants chief executive Andrew Conway believes that the government’s plan to introduce loss carry-back provisions is a step in the right direction, but he has urged for more support for small businesses.
“While we fully support the loss carry-back scheme and continue to advocate for it to be a permanent fixture of our tax system, it does not help unincorporated small businesses,” Mr Conway said.
“The majority of small businesses are unincorporated entities, and therefore, this policy will not directly benefit the army of entrepreneurs struggling to survive in a post-COVID world.”
Instead, he has now called for the government to increase the small business income tax offset from its $1,000 cap.
The rate of the offset stands at 8 per cent for the 2019–20 income year, increasing to 13 per cent for 2020–21, before rising to 16 per cent for 2021–22 onwards.
“Increasing the unincorporated tax discount would be a better option to incentivise most of the unincorporated small businesses around the country to take a risk, grow their business and employ workers,” Mr Conway said.
==
==
“While this group will enjoy any brought forward stage 2 or stage 3 tax cuts, this initiative directly rewards individuals who take on the arduous challenge to run a small business.
“While we are pleased that the small business tax offset rate is increasing, it is still capped at $1,000, which means that most small businesses will achieve their offset faster, rather than enjoy any more benefit as the rate increases.
“To incentivise small business to employ people, we are calling for the rate and threshold increases to be tied to small businesses which employ people. Over 60 per cent of small businesses are non-employing, and in the current environment, the government needs to encourage all businesses, both small and big, to do their bit to soak up the pool of unemployed.”
You are not authorised to post comments.
Comments will undergo moderation before they get published.