EOFY strategies for Aussie businesses

The end-of-financial-year is fast approaching, but there is still time to get your tax in order. We’ve compiled our top strategies for year-end tax planning for the consideration of your business.

Download this checklist

 If youYou may want toSo you can
Count your stockHave a business that holds stockEnsure you do a stocktake on 30 June and keep a record of the market, cost and replacement values or assets which are obsoleteUse the value which gives you the best tax outcome possibly saving you tax, or deferring paying tax
Pay staff superEmploy staffPay their April – June super before 30 June 2022Bring forward your tax deduction to 2022
Single Touch Payroll (STP)Employ staffEnsure that your software is STP ready as it is now compulsory to report via STPReport tax and super information to the ATO each time you complete a pay run
Super guaranteeEmploy staffConsider whether the increases in super guarantee percentage to 10% from 1 July 2021 and 10.5% from 1 July 2022 will be borne by you or your employeesEnsure employee salary packages are properly costed
Taxable Payments Annual ReportOperate in one of the following industries:
• Building & construction
• Cleaning services
• Courier services
• Road freight services
• IT services
• Security, investigation or surveillance services

AND make payments to contractors
Ensure that you have completed and lodged your report prior to 28 August 2022Ensure you are not penalised for late lodgement
Asset write-offsOperate a business with aggregated turnover less than $5bnClaim a deduction for the business portion of each depreciating asset (new or second hand - depends on turnover) purchased and first used or installed ready for use*.

*Eligibility is complex and depends on timing and entity considerations
Continue to expand and improve your business with new or second-hand assets
Prepare some estimatesHave business or investment income and your income varies from year to yearContact our office before 30 June so that interim estimates can be prepared for the 2022 financial year before it ends• Take any actions necessary to increase or decrease your income where possible to minimise tax payable
• Ensure you know what your tax position is so that the correct amount of tax is set aside
• Vary your June 2022 PAYG instalment to help cashflow if profit is down
Prepay expensesOperate a “small/ medium business” (turnover less than $50m) Prepay expenses for up to 12 monthsBring forward your tax deduction to 2022
Trustees distribute incomeOperate your business or own investments in a trustKeep an eye out for your end of year distribution resolution that will be sent to you in the next few weeks• Ensure profits are distributed in the most tax effective manner
• Meet the ATO’s requirements that this resolution be made prior to 30 June
Update your assetsHave depreciating assets not in an asset poolCheck the list of assets provided with last year’s financial statements and advise of any items that have been destroyed or soldClaim a tax deduction for the balance of the asset value this year
Write off bad debtsHave debtors who have not paid their accounts, have been chased and are not likely to payWrite off the debt in your books prior to 30 June 2022Claim a tax deduction for the bad debt this year
We have prepared a more comprehensive guide to help you step through the different opportunities, how they should be implemented, and the future tax cashflow consequences from adopting the strategies.

Have you got questions about the end of the financial year? Contact your local Bentleys tax advisor today. We’re here to help you get where you want to be.

 


Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

Reminder: Changes to super

Is your business ready for the super guarantee increase?

From 1 July 2022 the super guarantee percentage will increase from 10% to 10.5%. Employers should make sure they review employee contracts to determine whether the employee is remunerated on a superannuation inclusive or exclusive basis and whether the additional cost will be passed on to the employee.