Ahead of EOFY, Officeworks has released a report that looked into what tax breaks are available to SME owners this year and the awareness of such benefits among the owners of businesses in this sector.
The research revealed that 49 per cent of SME owners surveyed are not aware the instant assets write-off has increased to $150,000, with 71 per cent saying that they find the tax system for small businesses confusing.
“Looking at where to take advantage of business tax breaks can be an effective way for small-business owners to save money or offset losses,” Officeworks Chief Operating Officer, Michael Howard, said. “However, many small businesses don’t take advantage of them because they’re unaware of what’s available to them.
“When it comes to EOFY, it is best to speak to a taxation professional to take advantage of all the new changes,” Howard added. “For instance, small-business owners can find out what their company qualifies for and regularly monitor compliance. The key areas that they can look to take advantage of, is the instant asset write-off, as well as maximising deductible super contributions.”
The research also noted that 33 per cent of SME owners say that working from home climate will affect what they claim this EOFY. A further 14 per cent feel confused over what is a personal (employee) cost and what is a business cost, and 13 per cent intend to write off more assets.
Additionally, 60 per cent are concerned about the growth and stability of their business beyond the COVID-19 pandemic, and 40 per cent of SMEs say they don’t usually complete their tax return every year will complete one this year. Meanwhile, 49 per cent of SMEs aren’t aware that the incentive has increased to $150,000 this year, yet 52 per cent intend to take advantage of it.
Despite this, the research showed SMEs who intend on using the instant asset write-off plan on spending an average of $24,955 before 30 June this year. Additionally, 27 per cent of SMEs saw an increase in their year-on-year spending for office supplies, furniture and assets.
“If you have financially assisted employees with setting up their dedicated workspace or room at home, you are likely to be able to claim a work-related portion for home office expenses,” Howard said.
“If you are running your own business from home, you may also be able to claim the work-related share of occupancy expenses. To ensure you are getting the most from your tax return this year, make sure to speak with an accountant about what you can and can’t claim.”