TAX advisors have warned up to 40,000 small businesses face bankruptcy because of the GST.
TAX advisors have warned up to 40,000 small businesses face bankruptcy because of the GST.
New South Wales division of Certified Practising Accountants John Petty believes the GST payments, required as part of Business Activity Statement lodgements, will create fatal cashflow crises.
Mr Petty said the accounting profession would be thrown into chaos by the fall-out among small to medium-sized enterprises.
“Many liquidators cannot get enough staff at the moment to cope with the expected increases in bankruptcy work,” he said.
Mr Petty said the new tax system changes had placed enormous bureaucratic and financial burdens on SMEs.
“Some saw the writing on the wall and either closed or sold their businesses this year,” he said.
“In the accounting profession alone, small CPA practices are selling for as little as 30¢ in their revenue dollar where they used to sell for the same price as their annual turnover.
“I believe that within two years up to 20 per cent of public accounting practitioners in NSW won’t be operating. If these small accounting practices can’t keep their doors open, how will other SMEs fare?”
Fallon Group partner Tony Ince said the prediction of 40,000 business failures was realistic.
“However, it’s more likely the GST is just bringing to a head something that was inevitable anyway,” Mr Ince said.
“Some people have gone into business because they are a particularly good tradesman, doctor or whatever. But they are not necessarily good business people.”
The Australian Tax Office is claiming the first quarterly Business Activity Statement deadline has passed successfully.
It received more than one million quarterly BASs by the November 11 deadline. The tax office issued around 1.9 million quarterly BASs but expects to receive just 1.6 million back.
Tax Commissioner Michael Carmody said this was normal because there would be a sorting out of genuine obligations along with the normal business restructuring and closures.
Tax agents and some eligible individuals have until November 30 to lodge their BASs.
The ATO also revealed it received less than 280,000 of the 290,000 monthly BASs expected in July.
Mr Carmody said the result was better than past monthly remittance patterns for PAYE where non-lodgement was around 10 per cent.
New South Wales division of Certified Practising Accountants John Petty believes the GST payments, required as part of Business Activity Statement lodgements, will create fatal cashflow crises.
Mr Petty said the accounting profession would be thrown into chaos by the fall-out among small to medium-sized enterprises.
“Many liquidators cannot get enough staff at the moment to cope with the expected increases in bankruptcy work,” he said.
Mr Petty said the new tax system changes had placed enormous bureaucratic and financial burdens on SMEs.
“Some saw the writing on the wall and either closed or sold their businesses this year,” he said.
“In the accounting profession alone, small CPA practices are selling for as little as 30¢ in their revenue dollar where they used to sell for the same price as their annual turnover.
“I believe that within two years up to 20 per cent of public accounting practitioners in NSW won’t be operating. If these small accounting practices can’t keep their doors open, how will other SMEs fare?”
Fallon Group partner Tony Ince said the prediction of 40,000 business failures was realistic.
“However, it’s more likely the GST is just bringing to a head something that was inevitable anyway,” Mr Ince said.
“Some people have gone into business because they are a particularly good tradesman, doctor or whatever. But they are not necessarily good business people.”
The Australian Tax Office is claiming the first quarterly Business Activity Statement deadline has passed successfully.
It received more than one million quarterly BASs by the November 11 deadline. The tax office issued around 1.9 million quarterly BASs but expects to receive just 1.6 million back.
Tax Commissioner Michael Carmody said this was normal because there would be a sorting out of genuine obligations along with the normal business restructuring and closures.
Tax agents and some eligible individuals have until November 30 to lodge their BASs.
The ATO also revealed it received less than 280,000 of the 290,000 monthly BASs expected in July.
Mr Carmody said the result was better than past monthly remittance patterns for PAYE where non-lodgement was around 10 per cent.
