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Follow on Google News | EOFY 2013: Tax loss carry-back scheme moves into play for not so lucky SMEsIn the 2012-13 Federal Budget the government announced the tax loss carry-back scheme, to provide tax relief for eligible businesses.
By: MYOB Australia A one-year loss carry-back applies for this financial year, 2012-13, where tax losses incurred in the year can be carried back and offset against tax paid in 2011-12. For 2013-14 and later years, tax losses can be carried back and offset against tax paid up to two years earlier. The tax loss carry-back scheme: • Is available to companies, and entities taxed like companies • Is capped at $1 million of losses per year, providing a cash benefit of up to $300,000 • Applies to revenue losses only (eg. excludes capital losses) • Is limited to the company's franking account balance. MYOB CEO Tim Reed says, “The tax loss carry-back scheme will enable small and medium businesses to improve their cash flow when they need it most. It’s great to see tax policy that shows an understanding of the needs of small businesses. For those who are eligible, it’s a positive initiative – recent MYOB research showed two in five SMEs saw this initiative as a contributor to the health of their business. “I encourage business owners to consult their trusted business advisor and take advantage of this opportunity if they can. It could bring money back into the kitty to help with important areas such as repaying debt, paying staff wages, buying stock, marketing the business or investing in technology that improves business productivity.” It’s important to note the loss carry-back applies to revenue losses only, and the tax benefit will not be received by a business until it has lodged its income tax return for the year it incurs the tax loss. Therefore, lodge your income tax return early with your accountant. SMEs welcome tax loss carry-back scheme Last year (http://myob.com.au/ • 25% felt it would help maintain their current level of business activity • 22% said they would welcome it but don’t really need it • 16% felt it would assist in keeping their business afloat • 14% didn’t know and 10% said they did not care either way • The remaining 13% said the government should spend its time on other initiatives. Visit http://myob.com.au/ End
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