End of Financial Year Check

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Accountant Consultation – Do it now

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Accountant Consultation – Do it now

Big businesses make a mistake of failing to engage with their accountants.

Your interation should be more than just compliance and tax return submissions. It should include getting business advice, cash flow, and budgeting.

Take advantage of $20, 000 asset write off

Businesses with annual revenue of up to $2 million can take part in a generous government write-off scheme for plant and equipment purchases. The accelerated depreciation measure applies to all asset purchases up to the value of $20,000 and can significantly reduce the amount of tax a business will pay. It only applies to acquisitions from May 2015 to June 30, 2017, after which the limit will revert to $1000.

“So there’s quite an opportunity now to get that accelerated deduction”.

Maximise any other deductions available

Aside from the write-off scheme, businesses should take advantage of other legitimate deductions. This may include bringing forward expenses such as office supplies, repairs and maintenance into the current year, or prepaying monthly costs such as rent, electricity, wages and utilities before 30 June.

Write off Bad Debts

Write off your bad debts and document all efforts you have made to recover them, otherwise they cannot be claimed as deductions. This action also enables adjustments for any GST charged on the invoice.

Do it now and don’t wait until your tax return.

Superannuation

Get organised on the superannuation front. Super is not tax deductible until it has been paid, so it is important to ensure all super contributions for employees are completed by the end of the financial year. This is a good way of reducing your income tax bill.

Consider making concessional contributions into you super fund to take advantage of tax benefits (contributions are taxed at just 15 per cent). The limit is $30,000; or $35,000 for those aged 49 and over.

The June 30 deadline is also approaching for employers with 19 or fewer employees to be using SuperStream, a standardised format for transmitting superannuation data between employers, funds, service providers and the Australian Taxation Office. Larger employers should already be using SuperStream. 

Manage Cash Flow

Start the new financial year in a healthy cash position by reviewing your cash-management processes and adopting the most appropriate funding solutions.

Trust Obligations

The use of trust structures has come under scrutiny from the ATO, so it is important to understand your obligations. There is a requirement for the trustee to sign off on the distribution of income to beneficiaries before 30 June.

This can normally be done by way of a distribution minute that may specify distributions on a percentage basis without dollar amounts being specified. If a valid distribution does not occur before 30 June, there is a risk that the accumulated income will be taxed to the trustee at a penalty rate.

CGT Benefits

If your business has made a capital gain in the current financial year, it makes sense to assess the presence of any other capital losses that may offset those gains. For example, you could include selling assets that have incurred a capital loss.

 

One change of which many business owners may not be aware stems from the Small Business Restructure Rollover Bill 2016. The change allows small businesses to alter their legal structure without incurring a CGT liability, with the bill applying to the transfer of assets occurring on or after 1 July, 2016.

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Accountant Consultation – Do it now

Big businesses make a mistake of failing to engage with their accountants." data-share-imageurl="">