The end of the financial year is an opportune time to review your business affairs as part of your year-end tax planning.
In an exclusive presentation for CCIWA Members, Optima Partners recently explained what you need to know ahead of June 30.
![Individual income tax return](https://cciwa.com/wp-content/uploads/2024/06/iStock-1309123898-1024x683.jpg)
Tax and compliance updateÂ
Some of the key tax and compliance updates to look out for include:Â
- 20% Technology Investment Boost for the 2023 financial yearÂ
- 20% Skills and Training Boost for the 2023 financial yearÂ
- 20% Proposed Efficient Energy Use Boost for the 2024 financial yearÂ
- Temporary Full Expensing has ended on June 30, 2023 but Instant asset write-off still applies to assets under $20,000 for FY24 and FY25Â
- ATO is extending compliance programs/digital ID systemsÂ
Stage three personal tax cuts
Superannuation guaranteeÂ
Superannuation rate changes for compulsory employer super contributions are increasing each year to 12% in FY2025-26.Â
- 2023Â Â Â Â Â Â Â Â 10.5%Â
- 2024 Â Â Â Â Â Â Â Â 11%Â
- 2025 Â Â Â Â Â Â Â Â 11.5%Â
- 2026 Â Â Â Â Â Â Â Â 12%Â
It is worth noting that superannuation funds and the Australian Taxation Office now have more visibility than ever of a business’ superannuation obligations. The ATO has also signalled that in future obligations will need to be paid in real time (i.e. PAYGW & Super) when wages are paid.Â
Other Resources
Business reporting obligationsÂ
The following are some of the business reporting obligations you need to be aware of when finalising your end-of-year accounts and tax returns.Â
- Wages reconciliation and STP finalisationÂ
- Superannuation obligation reconciliation – this is not deducible if paid late, and employers must note the change in the SGC rateÂ
- Payroll tax obligations – check you haven’t exceeded thresholds if not registeredÂ
- Taxable payment annual reporting (TPAR)Â
- Building and constructionÂ
- Cleaning servicesÂ
- Road freight and courier servicesÂ
- IT servicesÂ
- Security, investigation or surveillance servicesÂ
- Review accounting data files for potential conversion or rate changesÂ
What to do before year end Â
- Review year to date figures to determine likely tax liabilityÂ
- Consider strategies for management of the likely tax positionÂ
- Determine dividends to be declared for companiesÂ
- Prepare distribution minutes for trustsÂ
- Consider owners remuneration and optimise tax outcomeÂ
- Small Business Entities – cash vs. accruals/prepayments/depreciationÂ
- Make superannuation payments as they are only deductible when paidÂ
- Debtor analysis – consider bad debts/timing of invoicingÂ
- Creditor analysis – bring forward expenses to get a tax deductionÂ
- Stock take – undertake a stock take and consider obsolete stockÂ
- Plant and equipment – consider any new equipment needed and ensure its available and ready for use prior to June 30Â
- Fringe Benefits Tax – if FBT return not lodged consider private portion of expenses and GST adjustmentsÂ
- Capital Gains Tax – consider the sale of any investments and prepare likely tax calculationsÂ
Business structures and tax outcomesÂ
Consider the relevance of the existing structure of your business.
- Section 100a and trust distributions – keep records of payments to beneficiaries to satisfy new ATO rulesÂ
- Potential trust distributions to investment companies to retain corporate tax rateÂ
- Division 7a – check owners drawings from companies and ensure repayments are made or enter into a Division 7a loan agreementÂ
Other considerationsÂ
- Planning for one off transactions – e.g. Business sales or purchasesÂ
- Self-managed Super Fund (SMSF) – do you have a SMSF? Consider the impact on the businessÂ
- Purchase of property or business premisesÂ
- Consider relevance of existing accounting systems and consider new technologyÂ
- ESG reporting – this begins in January 2025
CCIWA and Optima Partners are here to support your business at whatever stage you are at.Â
We offer a one-hour free consultation where you can discuss your unique circumstances and provide insights into possible strategies specific to your business. For more email: [email protected]Â