Mr Mills was speaking at the Tax Institute’s 2019 Tasmanian State Convention, where he explained that the Tax Office sees three key attributes in successful small businesses, with tax professionals the standout factor.
“While the ATO does a lot of work to mitigate the complexity of small business tax, we tend to find the single best predictor of success for a small business is whether or not they have a professional adviser,” Mr Mills said.
“We see tax professionals as being vital to the health of the system and the small business market.”
Businesses that managed to get a good grip over their cash flow management, as well as be digitally ready, were more likely to be successful than those that weren’t, added Mr Mills.
The ATO have acknowledged the efforts of the 3.8 million small businesses, including 1.6 million sole traders, as an essential part of our economy, employing more than 5.5 million people, contribute $380 billion to the economy and make up more than 99% of all Australian businesses.
Behind every small business are busy people that are working hard to build and run their business, contributing 15% of total income tax and 23% of total GST collected by the ATO.
However, while 92% of small businesses use a tax professional to lodge their tax return, only 53% use a tax professional to lodge their BAS.
Small businesses come in all shapes and sizes, so there isn’t a one size fits all solution for when you should transition to an accountant and for what services. That being said, small business accounting can quickly become complex if you do it on your own, takes your time away from doing what you do best, and leaves you susceptible to mistakes in filing and missed deadlines with the ATO.
Not only can using an accountant give you peace of mind and clarity around your finances, partnering with an accountant who has the skill and expertise to guide you through your journey will set you up for lasting success.
If you have any queries or concerns around your interactions with the ATO, get in touch with Tradies Accountant for a no obligation chat around how we can help to give you the best chance of ongoing success as a small business. Give us a call on (07) 3174 5010 or contact us to get started.