Why the budget’s business measures will put the ATO under the pump

small business tax budget

As Tuesday’s federal budget continues to get sold over the next few days, the ATO will be inundated with enquiries over the business tax measures.

Take the example of two measures designed to help businesses train up staff and get businesses digital.

Both of the measures give people a deduction of $120 for $100 of expenditure and will, no doubt, be welcomed by owners of small businesses that struggle to set aside funds to train people or even to get their systems upgraded.

Questions of what kinds of things qualify for the deduction come into play, and that is where the staff at the Australian Taxation Office will be called upon.

The Treasurer’s speech provides some detail, but that will not be enough for people who will be looking to find a way of putting whatever technology related expenses into the pile of digital receipts that are ripe for deductions.

The ATO will be hit by queries from all directions on a day like today, from all quarters and about various aspects of the budget. People will be curious about what qualifies and how they get the deduction.

Business owners will inevitably call their accountants as they always do the day after any major announcement that contains the magic words ‘small business’. They will ask their accountants what the rules are and what they are allowed to claim deductions on.

Sensible accountants will ask their clients to wait while they do their research to find whether there is more information about how that deduction will be administered before they open their gob.

Nothing erodes a professional’s reputation quicker in the eyes of a client than being wrong on detail.

Nowhere was this more prominent than when businesses fearing they would have to shut the door because of the coronavirus pandemic’s health measures such as lockdown meant people would not be spending in store.

The introduction of JobKeeper saw people in the accounting world cop queries from clients before information related to who qualifies was available online.

It is not easy telling somebody who believes they are facing an existential crisis to wait until further advice is available from those agencies administering a benefit.

This article was first published by The Mandarin.

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