The end of the financial year is just around the corner, and we know that tax time can often feel overwhelming for those running their own businesses.
Staying on top of company tax obligations and avoiding an audit by the regulators can be a constant source of stress.
Here at Alliance Accounting, we want to help relieve some of your worry, so we’ve put together a list of tax tips for small to medium businesses. Of course, if you need any guidance, we are always happy to assist, but these tips might help you feel on top of your task load.
Business owners need to be able to readily access accurate information, whether it’s so you can answer an urgent question or make a critical decision. That’s why it’s important to make sure you reconcile your accounts regularly.
Using cloud-based accounting software, such as Xero, can make updating your accounts an easy process. You have access to real-time information as your bank accounts are directly connected. You have complete visibility of your cashflow, revenue, outstanding invoices, payroll (if applicable) and other key accounting elements. All of which helps to keep you informed and in control… and prepared for the EOFY processes.
We appreciate that Goods and Services Tax (GST) can be a complex topic to understand. But as a business owner, you must know your obligations and be aware of the relevant registration threshold.
The ATO states:
“You must register for GST:
If you’re not registered for GST, check each month to see if you’ve reached the threshold, or are likely to exceed it. You need to register within 21 days of your GST turnover exceeding the relevant threshold.”
You should also remember that if you have registered for GST, then your tax return should include your income and expenses net of GST. The GST component is handled on your Business Activity Statement (BAS) instead.
Last year, as part of the COVID-19 stimulus package, the Government extended the instant asset write off measures for eligible businesses. The ATO outlines this information:
“For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:
This was further extended with the October 2020 Federal Budget measure named ‘Temporary Full Expensing’. ATO explains:
“Businesses with an aggregated turnover of less than $5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets. The eligible new assets must be first held, and first used or installed ready for use for a taxable purpose, between 7.30pm AEDT on 6 October 2020 and 30 June 2022.”
In order to claim a tax deduction for this financial year, you need to make sure your employee superannuation payments are received by the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30 June.
As it is always a busy time of year, it’s better to make your superannuation payments sooner rather than later. Last minute deposits can experience processing delays and could end up rolling over year-end. If you do need to make a last minute payment and want to be able to claim a deduction, please contact us as soon as possible so that we can help you through the process.
Running your own business is extremely rewarding but is also filled with challenges… especially when it comes to managing your accounts and staying on top of tax obligations. That’s why getting the right advice can help give you the time and resources you need so you can focus on growing your business.
The team at Alliance Accounting is here to help you simplify the process of meeting your tax obligations this EOFY. If you’d like to find out more about how we can help with your business accounting, please contact us today.