On 3 March 2021, former Ombudsman Kate Carnell released research paper 'A tax system that works for small business' which focuses on ways to make small changes to our tax system that will make a huge difference to small businesses.
Some are policy changes that would make life easier for the small business community, and encourage spending with them, but the bulk are administrative changes that should be quick and easy to implement.
Recommendations include waiving interest and penalties for a first offence, restricting ATO review and audit periods to one year when a small business is using an accredited tax or BAS agent and immediately ceasing debt recovery action against a small business that is seeking a review of its tax position, regardless of whether the dispute is before the AAT.
The report also recommends making compliance easier by allowing small businesses to opt-in to GST being collected and remitted directly to the ATO at the electronic point of sale as well as income averaging measures that would help small businesses pay the right amount of tax in good years and bad.
Without change, many small businesses will fail, leaving employees looking for work, communities lacking services, owners devastated and facing bankruptcy and an economic black hole at a time when Australia needs small business to pull us towards recovery.