The end of the financial year is a time when many important decisions can be made to the advantage of you and your business, but there is often work to be done. With just weeks left in the 2018-2019 financial year, you have limited time to focus on your EOFY to-do list.
Once the new financial year rolls over it can be too late to take advantage of income tax and superannuation concessions that benefit you and your business.
Get your books up to date to give you a good indication of your business performance and position for the year. You will need to estimate your income and expenses for the remainder of the financial year, but with reliable and current information, you will have a good idea of turnover, income and expenses, liabilities still to be met, prepayments that can be made and how much profit you have made for the year.
Your accountant is your tax expert and should be engaged in forward planning so that you achieve the maximum benefit from your position and also understand your obligations.
The government allows a number of tax concessions if your business is an eligible small business entity.
For superannuation contributions to be claimed as a deduction in this financial year, the contribution must be received by the super fund by 30th June 2019. Note that processing of payments can take several working days, so payment should be timed to take this into consideration.
If planning to make an extra contribution to super, check how much super has been paid to date. There are limits to the amount of super that can be contributed each year. Paying in excess can result in extra tax being paid.
The government has increased the threshold for instant asset write-off. This has been extended to 30 June 2020 so the opportunity is there to be strategic about your business investment and take advantage of the $30,000 asset write-off
Single Touch Payroll is the new payroll reporting system that the government has introduced.
Employers with 19 or fewer employees should be implementing Single Touch Payroll as of 1st July 2019. Businesses also have the option of implementing this system before the due date.
Most businesses with 20 or more employees should already be using STP.
The new system means many businesses will need to upgrade to a cloud accounting software package, although there are options for employers who do not use payroll software.
As an employer, you are required to provide PAYG Summaries to your employees by July 14th unless this information has already been reported through Single Touch Payroll (STP). The PAYG Summary show how much you have paid the employee during the year, and the amount of tax that you have withheld. They must then be lodged electronically with the ATO via the Business Portal, BAS Agent Portal, Tax Agent Portal or SBR provider by August 14th.
With so much going on at that time of the year, it can be prudent to do a bit of advance housekeeping of your payroll records during June, to avoid any last-minute issues once the financial year ends. This is particularly important for MYOB users, who are not able to process payroll in the new financial year until the last payroll year is closed off.
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As business owners, we all have our own skills and areas of expertise. We tend to be busy with the day to day demands of our business and responsible for driving the growth of our business.
If prioritizing the end of financial year review is proving a challenge, employing the support of a certified bookkeeper or BAS Agent can take the pressure off and help you to meet the necessary deadlines.
Having another expert on board should not only save you time and money but also give you peace of mind.