Login
iscover
The impending repeal of the mineral resource rent tax (MRRT) is causing uncertainty for small business around what can and can’t be claimed in this financial year, says the IPA.
Newsletter
Uncertainty reigns this tax season
10 June 2014
•
10 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!
The likely repeal of the MRRT sees a number of tax concessions on the chopping block, including the 'loss carry-back' initiative, reduction in the small asset write-off and the ability to claim extra depreciation on motor vehicles.
So much uncertainty about what businesses can and can’t claim as we head into tax return season is far from ideal, according to IPA chief executive officer, Andrew Conway.
The passing of the MRRT repeal will have very real implications for small businesses, he said.
“Once the MRRT repeal bill is passed, these concessions have a retrospective start date. In the case of the small asset write-off threshold, it is proposed to reduce from $6,500 to $1,000 from 1 January 2104,” he said.
“The institute is urging small businesses to be cautious of what claims they make with the knowledge of the impending retrospective legislation still hanging over their heads,” said Mr Conway.
“Whilst these tax concessions can legitimately be claimed this financial year, taxpayers will need to amend their returns if the legislation is passed,” he added.
==
==
BDO tax partner Michael Grant told AccountantsDaily the uncertainty is already costing small business.
“It’s difficult when you don’t actually know what rules you are working under,” he said.
“Spending $5,000 or $6,000 on a piece of equipment and being able to write that off is very different to having to depreciate it over 10 years, it does make a difference to your tax bill for this year,” he said.
BDO is advising clients they need to work on the basis the provisions will be repealed, said Mr Grant.
“The whole problem we have here is that business hates uncertainty,” he added.
“What if the law doesn’t get changed, you have missed out on an opportunity. For small business it’s a lose-lose situation."
You are not authorised to post comments.
Comments will undergo moderation before they get published.