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Pitcher Partners has labelled as very encouraging the recently-released Board of Taxation report on tax and small business, noting a recommendation to simplify tax returns that the firm describes as a win for accountants.
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Pitcher Partners welcomes tax return simplification
22 January 2015
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Among a number of recommendations, the Review Of Tax Impediments Facing Small Business report recommends that “the ATO, and its relevant advisory groups, review whether the quarterly reporting obligations for small businesses could be significantly simplified, including whether at the end of each financial year businesses could complete a combined Income Tax Return and Annual Business Activity Statement based on the same data”.
Theo Sakell, Pitcher Partners partner and executive director – tax consulting, described the recommended review as a “really good thing”.
“I think the best thing about the announcement is that it will reduce the thinking time that a small business operator needs to have when they prepare a return,” he said.
“The idea they have has a lot of merit because it will cut a lot of those questions out so you don’t even have to think about answering them.”
While acknowledging this may impact accountants’ compliance revenues, Mr Sakell said the change would ultimately be good for accountants.
“It gives the accountants more time to talk to their clients about the value-adding stuff, about the business,” he said.
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“The accountant can ask ‘how can we help you improve your business?’ rather than getting bogged down in all that compliance work.”
Mr Sakell also said he was pleased with the ATO’s participation and cooperation with the Board of Taxation.
"We are particularly encouraged by the buy-in from the ATO, particularly on the short-term fixes, which has avoided the need to change the law.
“In other words, the ATO has actually come up with administrative fixes on a lot of stuff that can be very frustrating for a lot of small businesses," he said.
Minister for small business Bruce Billson said the report is focused on short- and medium-term priorities for small business tax reform, with a particular focus on simplifying processes and cutting excessive red tape.
“The removal of tax impediments for small business will make it easier for businesses to start; enable established businesses to grow; and provide greater security for small business owners in retirement,” he said.
The report has been released as the industry awaits the federal government's tax white paper which will look at the wider taxation system, including that surrounding small business and business owners.
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