Finance: Unnecessary paperwork a big drain on time

Do you think there are still too many unnecessary rules for small business owners when it comes to tax compliance?

Getting into business isn't only about thoroughly knowing what you have to sell or the service you have to provide.

On top of that there are returns to file - tax returns, Paye returns, GST returns, FBT returns, company annual returns - minutes to be recorded, ACC registration, financial statements to prepare under certain rules .... and on it goes.

It's a wonder we have any time to do the business.

We should be trying to reduce the amount of paperwork for businesses. If we could file one return a month for all for taxes for each business, that would make a lot more sense than completing a different return for each tax, each required at different times throughout the month.

Commerce Minister Craig Foss has introduced a bill to reduce reporting obligations and in turn compliance costs for our small to medium businesses. The financial reporting bill has as its main objectives reducing compliance costs by reducing excessive reporting obligations. This is especially a problem for smaller companies that have to adhere to larger company rules.

It wants to empower the external reporting board to establish standards for entities with the end user in mind. Annual returns for charities require financial statements to be attached but the rules aren't clear so the reporting quality can be questionable.

Does that sound like something on your list of business worries?

Maybe, maybe not.

This might be more like you: a goal of one hour for one return, and one payment each month, is something the Institute of Chartered Accountants has set for its leadership paper on ways to simplify taxation for small businesses.

The report also discusses further separating business size into micro-business taxed on turnover (those that are not GST-registered and have no staff) and then small business, paying tax, fringe benefit tax and ACC levies in one go, and a similar tax collection system based on GST periods.

Either way, with all the dates and filing of returns, can't we just roll them into one return a month? One for Paye, GST, income tax and FBT - it usually all comes from the same bank account, anyway.

It's not always about reduction, though. As of August 1, the filing of company annual returns has cost $45. It was previously free. The companies register shows 563,856 active companies for 2010/2011 - so that means an extra $25.3 million for the Government.