Bring back the loss carry back - IPA

THE Institute of Public Accountants (IPA) has renewed its call for the return of the loss carry-back initiative introduced by the Government in 2012 but which only endured a one year life-span.

“The IPA had long advocated for the loss carry-back which gave viable businesses a boost when they needed it the most through more timely tax loss relief,” said IPA chief executive officer, Andrew Conway.

“With the repeal of the Minerals Resource Rent Tax, the loss carry-back became an instant casualty.

“Small businesses operating through companies generally have limited resources to cope with adverse trading conditions and may require short-term liquidity to meet day-to-day liabilities.

“This has always been one of the major shortcomings of the tax loss treatment rules for small corporate businesses; the inability to claw back previously paid taxes and having to wait to earn profits before they could recoup their tax losses.

“We are urging the Government to reintroduce the loss carry-back initiative allowing companies to claw back their tax paid when they incur revenue loss. 

“The provisions that were introduced struck the right balance between allowing losses and limiting exposure to government revenues by placing a quantitative cap in conjunction with a two-year carry-back period,” said Mr Conway.

These recommendations form part of the IPA’s pre-Budget submission. 

For more information go to: http://bit.ly/2jxoU7L

publicaccountants.org.au