In this article, Trish Anderson from Anderson Tax Solutions shares her ‘Sorted. Top 3 Must Haves’ for small business owners in Australia for the end of the financial year.
The end of financial year is a great time for small business owners to take stock.
If you are organised enough to have all your information in an accounting software program (not just a shoebox) you are already a step ahead. Make sure that you have coded up and entered all your transactions. Then it’s time to run some reports – start with a profit and loss for the year. Exciting stuff….it can tell you a lot of things – good and bad. How does this year stack up to last year. Is there a big change in particular cost centres? Do you remember why?
The bottom line – how does it look? If you have covered all your expenses and remembering that you may still have deductions for depreciation on existing plant & equipment or interest, you may consider paying expenses before 30 June – eg staff super which wouldn’t be due until later in July or paying next month’s rent or other bills in advance.
Another option for small business is the Instant Asset Write Off. From 12 March 2020 the instant asset write off has increased to $150,000. You can purchase plant and equipment used for running your business up to $150,000 before 30 June and claim in the 2020 year. There have been some changes through the year as to amounts and dates so check with your accountant what applies to your asset purchases through the year.
Covid 19 has brought us some different income types for small business. If you have received Jobkeeper don’t forget to include it in your income as it is taxable. You may have received other stimulus payments from Federal and State Governments – ensure that is considered too. Most of these payments are tax exempt so shouldn’t be included with all your other income.
Single Touch Payroll (STP) has been running for the year for small business so your staff won’t be receiving traditional payment summaries or group certificates this year. You’ll need to finalise the STP reporting instead which will be accessible on MyGov by your employees. Annual Taxable Payments Reports for some industries also need to be reported to the ATO. Whilst this was originally just for the construction industry, other industries are now included such as cleaning, courier, road freight and IT. Make sure you have kept the correct records and finalise and upload those reports too.
So… my Sorted. Top 3 are…
- Get all your ducks in a row. Review your situation and find out your business’s health.
- Pay all expenses you can and invest in new equipment but only if you can afford to do so and if it is something you really need.
- Make sure you have the right software systems in place so that you are compliant with all the ATO wants from you in the year to come.
The above information is general in nature and is not intended to be considered as advice. You should contact your own accountant or adviser to obtain advice which is applicable to your personal situation.
Certified Practising Accountant