Compliance is a minefield. Small businesses – which are resource- and time-poor – find it tricky to navigate the complexity and form filling required.
Thankfully, this year’s Budget takes a step forward in making things easier. GST, BAS and more – the Government is changing a heap of rules when it comes to complying with regulation.
Combined with the Budget’s plan to reduce company taxes to 25 percent over the next 10 years, and these simplifications it is looking like a positive step to making business life easier.
So what’s up with regulation?
Well, from 1 July 2016, all businesses with revenue of under $10 million will get the following:
Simplified depreciation rules
The Government is raising the revenue threshold for small businesses. It used be $2 million – now it’s $10 million. That means businesses turning over up to that amount can claim the $20,000 instant asset write-off.
That’s a win for business. You can read more about it here.
You should speak to your accountant or advisor about it… but don’t get too excited yet, as we hear that the opposition are opposing this one.
Simplified trading stock rules
This is a big one. Businesses now will have the option to avoid an end-of-year stocktake if the value of the stock has changed by less than $5,000.
That’s a huge compliance win. If businesses can avoid doing a stocktake, that’s a lot of hours they can put into making their business succeed.
Simplified PAYG instalments
Businesses generally don’t love dealing with the ATO, but this Budget might make it a little easier. There will be a new method of paying PAYG instalments calculated by the ATO, which will help remove the risk of overestimating – or underestimating – how much businesses should pay.
This will help businesses avoid any penalties that arise as a result of calculating those payments incorrectly.
We don’t want to understate this – this is a huge win for small business. According to the Budget, businesses with turnover under $10 million will be able to account for GST on a cash basis, and pay GST instalments as calculated by the ATO.
But it doesn’t stop there.
A trial of simpler BAS statements
Cue the fireworks.
The Budget has introduced changes to simplify BAS reporting requirements. From 1 July 2017, small businesses will be able to easily classify transactions, and prepare and lodge their BAS.
The big change is that BAS reporting will reduce reporting labels from seven to three.
A trial is set to start on 1 July of this year, with a full rollout beginning in July 2017.
This is huge. One of the biggest complaints among small businesses regarding compliance is that there are too many forms and they take too much time. This change is a big win that shouldn’t be underestimated – small businesses can now use that time to help build their businesses and prepare them for success.
According to research commissioned by MYOB, Australian and New Zealand small businesses pay more than $13.7 billion in compliance costs every year. For every SME, that’s an annual cost of $6,778.
And in our March SME Snapshot, 49 percent of businesses said they were more likely to invest back into their business of GST/BAS compliance was reduced.
For entrepreneurs and business owners, this is one of the greatest gifts they could have received. Every second not spent filling in forms is more time to spend preparing themselves for greater success.