Small business owners have a worryingly poor knowledge of a number of regulatory changes set to start in the new financial year, such as amendments to superannuation and the tax-free threshold, according to new research.
In a survey of 381 business owners in an “insights panel”, software firm MYOB found that many were unaware of their new obligations, despite 69% saying that they were “very confident” or “confident” that they will be fully compliant during the 2012-13 financial year.
Nearly half didn’t know that the flood levy will be removed from individuals, while one in five were unaware of the tax-free threshold lifting to $18,200.
Other areas of sketchy knowledge include changes to superannuation as part of the Minerals Resources Rent Tax legislation, the altering of annual reporting of contractor payments and the impact of the carbon tax compensation measures.
MYOB says that small firms should be wary, given that the upcoming financial year will see an unusual number of changes that will directly affect them.
The situation is set to become even more complex after the introduction of measures to be unveiled in this year’s Budget.
Tim Reed, MYOB’s CEO, says: “Staying on the front foot with end of financial year changes such as this, as they emerge, can have a big impact on business owners’ bottom lines and their ability to innovate and compete in an increasingly global economy.”
“This upcoming period is one of the most compliance-heavy in years. Business operators often don’t know what they don’t know until it’s too late.”
“That can land them in hot water with their staff and with the ATO, placing them at risk of fines and/or penalties.”
“Last financial year the ATO’s evaluation of 1.4 million small businesses against its risk detection systems led to 16,000 being investigated. This is something our economy’s engine room should not have to be anxious about.”
“Business operators who don’t gain an understanding of their knowledge deficits are at risk of paying too much tax or deducting too much tax from their employees’ pay packets in the new financial year.
“This could cause further time, money and paperwork burdens if these grey areas are not quickly attended to.”