Tax Impediments Facing Small Business…

The Board of Tax report on Tax Impediments Facing Small Business has been made public. This report, and the Government’s response make some interesting reading.

What do you think about:

  1. “Based on an analysis of business population data, the Board recommends that the small business entity turnover threshold be increased to at least $3 million and investigate the feasibility of an increase to $5 million.” The Government says they will think about it…
  2. “The Board recommends an increase to the ‘minor and infrequent’ threshold from $300 to, at least, $500. This is arguably a reasonable level that keeps the threshold current.” The Government says they will think about it…
  3. “The Board also recommends that there be an investigation of the possibility of aligning the FBT year to the income tax year.” The Government says they will think about it…
  4. “The Board recommends that the superannuation guarantee charge be calculated on the basis of OTE rather than salary and wages to align it with the way that superannuation contributions are calculated. While OTE is a more complex definition it would mean no change to employers’ current calculations. The Government supports this recommendation and has agreed to implement this proposal from 1 July 2016 as part of the package of reforms to be implemented to reduce small business superannuation compliance costs.
  5. The Board recommends that the calculation of the SG Charge components be redesigned by legislation. And the Government will do this as well.
  6. Decision tools from the ATO on PSI, employee vs contractor and whether you will be carrying on an enterprise.

So there are a few good measures but the report does the standard cop out of saying more reviews are need into the Small Business CGT Concessions and the way entities are taxed differently (especially trusts). Still waiting for the Board of Tax review on unpaid present entitlements to companies and Division 7A


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