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COSBOA highlights loss carry-back tax initiative

Small business body urges trucking operators to discuss new loss carry-back tax provisions with their accountants

By Rob McKay | June 27, 2013

A leading small business representative body has urged trucking operators to discuss new loss carry-back tax provisions with their accountants if they are not already aware of them.

The provisions announced in last year’s Budget come into force on Monday.

Companies are already able to carry back up to $1 million worth of losses to get a refund of tax paid in the previous year but from next week will be able to carry back up to $1 million worth of losses against tax paid up to two years earlier.

Council of Small Businesses of Australia (COSBOA) Executive Director Peter Strong says the issue is complex enough to demand that an accountant be involved but should be attractive to operators investing in new equipment.

“We go through change, sometimes due to the economy and sometimes through the cycle of business,” Strong says.

“Change normally involves money, normally involves a decrease in profits or even a loss and the loss carry-back gives people the opportunity to minimise the loss through the tax system.

“It something that can be quite good for business . . . if you do have to buy an extra dog trailer or new truck or upgrade your equipment.”

In such cases, an accountant might say that while cash reserves might take an initial hit due to making such an investment, that will be offset by a tax gain on previous losses, he adds.

In explaining the initiative last July, Assistant Treasurer David Bradbury indicated 110,000 companies could gain from it, adding: “Companies not in the fast lane of our economy can invest in their people, equipment and ideas, knowing that they’ll be able to carry back losses at tax time.”

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