Running a small business is rewarding, but it comes with plenty of challenges—particularly when it comes to tax. 

Many owners underestimate how complex the tax landscape can be, and mistakes can prove costly. Seeking advice from both an Accountant and a Financial Planner can make the difference between financial stress and long-term stability. 

Here are the top five tax issues small business owners face and why professional guidance is essential.

1. Cash Flow and Tax Obligations
   For small businesses, cash flow is king. The issue arises when tax liabilities, such as income tax or Goods and Services Tax (GST), coincide with slower trading periods or unexpected expenses. Too often, business owners spend revenue without setting aside enough for tax payments, leaving them scrambling when deadlines arrive.

   An Accountant can help by forecasting tax liabilities, structuring payment plans, and advising on efficient bookkeeping systems to track obligations in real time. A Financial Planner complements this by assisting with budgeting strategies, helping owners separate business and personal finances, and ensuring cash reserves are built for predictable—and unpredictable—tax bills.

2. Business Structure Mistakes
   Choosing the wrong business structure is a common tax trap. Whether operating as a sole trader, partnership, trust, or company, each structure has different tax rates, reporting requirements, and liability implications. Many owners stick with their initial setup even as the business grows, leading to unnecessary tax costs or exposure to personal liability.

   Accountants are vital in assessing whether your current structure still serves you. They can recommend changes that minimise tax while protecting assets. Meanwhile, Financial Planners help ensure that your business structure also aligns with long-term goals, such as wealth creation, retirement, and estate planning.

3. Claiming Deductions Incorrectly
   Small business owners often overlook legitimate deductions or, conversely, claim expenses they shouldn’t. Both scenarios can hurt: missing out on deductions means paying more tax than necessary, while claiming incorrectly risks audits and penalties. Common trouble spots include home office costs, vehicle expenses, and asset depreciation.

   An Accountant ensures you are compliant while maximising deductions, using strategies like small business asset write-offs and expense apportioning. A Financial Planner can provide perspective on how to reinvest tax savings wisely, whether it’s into superannuation, insurance, or business growth initiatives.

4. Superannuation and Employee Obligations
   Employer obligations around superannuation guarantee (SG) contributions, payroll tax, and PAYG withholding are frequent headaches. Missing deadlines or miscalculating amounts can lead to fines and damaged staff trust. Additionally, small business owners often neglect their own superannuation, which has long-term tax and retirement consequences.

   Accountants keep employers on top of compliance, ensuring obligations are met on time and records are accurate. Financial Planners step in to make sure business owners themselves don’t miss out—structuring tax-effective super contributions and building a retirement plan that works alongside the business.

5. Capital Gains Tax (CGT) on Business Sales or Asset Disposal
   For many small business owners, the business itself is their largest asset. Selling it, passing it on, or even disposing of significant business assets can trigger Capital Gains Tax. The rules are complex, but there are small business CGT concessions that can dramatically reduce tax liability if applied correctly.

   An Accountant’s role is crucial in calculating the CGT impact and applying concessions lawfully. A Financial Planner adds value by integrating the proceeds into your broader financial plan—whether it’s retirement, paying down debt, or reinvesting in new ventures.

Why Professional Advice Matters

While tax software and online resources can help with basics, they can’t replace tailored advice. Accountants and Financial Planners provide complementary expertise:

• Accountants focus on compliance, reporting, and minimising tax.
• Financial Planners focus on strategy, long-term wealth, and aligning business decisions with personal goals.

Together, they help small business owners stay compliant, reduce stress, and make decisions that create sustainable success.

Final Word

Tax is one of the most significant challenges for small business owners, but it doesn’t need to be overwhelming. By understanding the common pitfalls—cash flow management, business structures, deductions, obligations, and capital gains—and seeking professional advice, business owners can not only stay out of trouble but also unlock opportunities for growth and security.

If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.

This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.

(Feedsy Exclusive)