Tax time is fast approaching and it’s filling small business owners with dread – with one in five (19%) claiming they’d rather clean the workplace toilet than complete the annual tax return.

In addition, 22% of small business owners would prefer to wipe the office windows clean, 15% would buy their workers lunch for a month and a frightening 8% would even choose to fire someone over completing their tax return.

Part of this fear may be due to small business owners’ confusion over what tax breaks are available. The “Dick Smith Productivity Study”* conducted by Galaxy Research , a poll involving over 250 small business owners, revealed that over a third (34%) find the process too confusing or preferred to leave it all to their accountant, while another one in three business owners are aware of the existence of some tax breaks but don’t know any of the details.

Greg Hirsch, Dick Smith’s Office Merchandise Manager believes that these figures show that small business owners need to get up to speed on what tax breaks are available to them. “ The ‘Dick Smith Productivity Study’ shows it’s clear education is important when it comes to making the most of tax time savings. Even those business owners who knew they were entitle to tax breaks were not aware of any of the essential details.”

Taxation expert and author, Adrian Raftery, also believes small business employers should take the time to understand the tax breaks available to them.

“The ATO is ready to subsidise these improvements by offering an immediate tax write-off for new equipment purchases of up to $6,500. The Dick Smith research showed that one in four small business owners claimed they would be more likely to take advantage of this this rebate once they knew of its existence. This figures show that it’s in the best interest of small businesses to bring their knowledge of tax-time concessions up to speed,” says Raftery, principal of Mr Taxman.

With time running out before the end of financial year, Raftery has prepared some top tax tips for small business owners to follow:

1. Make the most of new small business entity (SBE) tax concessions

Small businesses can now immediately write-off of new business assets that cost less than $6,500. These assets include computers, monitors, security systems and printers. There is no limit to the number of assets that you can purchase under this concession.

If your business is registered for GST, the immediate write-off limit or buying a business asset increases to $7,150, as you can claim the 10 per cent GST credit and get an immediate write-off for the balance in this year’s tax.

2. Minimise your tax bill by moving money into super

Small business owners can have their business contribute up to $25,000 per year into super, which is only taxed at 15 per cent within the fund, and claim a tax deduction for the contribution. Note: In order to obtain a tax deduction on your next return, the money must to be received by the superannuation fund by 30 June. 

3. Scrap obsolete stock or plant and write-off those bad debts

Got some old plant or stock that your business simply can’t sell or have debts you can’t collect? Then physically write them off before 30 June and get a tax deduction for it this year. Note that the debt must have been originally shown as income in order for the write-off to be allowed. You need to put your decision in writing and show that you have made a genuine attempt to recover the debt to prove that it is bad.

4. Defer income and bring forward expenses up to 12 months in advance

Defer your taxable income to next financial year by, where possible, delaying the receipt of cash income and deferring invoicing till next year. An immediate deduction is also available to SBE’s for the prepayment of allowable deductions (such as lease payments, interest, rent, business travel, insurances and subscriptions) up to 12 months in advance by 30 June.

 5. Claim back last year’s company tax paid from the taxman

Previously, tax planning has been restricted to smoothing taxable income against future years. However under the proposed new “carry-back tax loss” legislation, companies will be able to incur revenue losses up to $1 million this year (subject to its franking account balance) and receive a refund for tax paid last year. Note: this concession is not yet passed in Parliament and is only available to companies and not businesses operating as a sole trader, partnership or trust.

* The “Dick Smith Productivity Study” involved a poll of 503 respondents comprising of 252 office workers and 251 small business owners in Sydney, Melbourne, Brisbane, Adelaide and Perth and was conducted by Galaxy Research.