As we approach the end of the financial year, its time to get things sorted and make sure your affairs are in shipshape order this tax time. Here’s a summary of what we believe you should focus on as a small business.
1. Tidy up your financial records and ensure you are up to date with your compliance
Take time to organise your paperwork and receipts.
Ensure that your BAS returns are lodged and up to date, and your current Single Touch Payroll (“ STP”) filings are up to date.
Consider any Fringe Benefits Tax reporting and liabilities that you may be required to comply with.
After the end of the financial year Ensure your GST / Payroll (Super / PAYGW and Wages Payable) accounts all balance and reconcile. Ensure you lodge your annual STP reconciliation before the due day (14th July 2024) ATO FINALISE YOUR STP DATA
If you are required to lodge a Taxable Payments Annual Report (“TPAR” report) – ensure that you report this by the 28th August 2024.
2. Stay informed and up to date of any legislative changes
Consider if any award rates (if applicable) have changed and need to be updated in your payroll system, or if any annual licences need renewing. Update the Super guarantee % rate to 11.5% from 1st July 2024.
3. Leave provisions and staff bonuses
Consider any annual leave and update the provisions for this in your accounting records. Any superstar staff members who you would like to pay a bonus to? Make sure that it’s paid before 30th June 2024 to claim the tax deduction.
4. Year-end stocktake / work in progress
If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30th June 2024. Review your listing and write-off any obsolete or worthless stock items.
5. Chase up any outstanding invoices and consider writing – off bad debts
Now’s the perfect time to chase up on any outstanding invoices. Then, review your Trade Debtors listing and write-off all bad debts – Prepare a management meeting document listing each bad debt, as evidence that these amounts were written off prior to year-end and enter these into your accounting system before 30th June 2024.
6. Small business concessions – prepayments
“Small Business Concession” taxpayers can make prepayments (up to 12 months) on expenses (e.g. loan interest, rent, subscriptions) BEFORE the end of the year and obtain a full tax deduction in the 2024 financial year.
7. Private company (“Div 7A”) loans
Business owners who have borrowed funds from their company in previous years must ensure that the appropriate principal and interest repayments are made by 30th June 2024. Current year loans must be either paid back in full or have a loan agreement entered in before the due date of lodgement for the company return, or risk having it counted as an unfranked dividend in the return of the individual.
8. Instant asset write off
Businesses with an aggregated turnover of less than $10 million can immediately deduct the business portion of eligible assets that cost less than $20,000 and are first used or installed ready for use between 1st July 2023 and 30th June 2024. The $20,000 threshold applies on a per asset basis, so small businesses are entitled to write off (instantly) multiple small assets. Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.
9. Pay employee superannuation before 30th june 2024
To claim a tax deduction in the 2024 financial year, you need to ensure that your employee superannuation payments are received in the member account of the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30th June 2024.
You should avoid making last minute superannuation payments as processing delays may cause them to be received after year-end.
10. Plan ahead and chat to your accountant
Use this time to see if there is any tax planning required for FY2024 or to consider if you are in the correct business structure, or to discuss if a dividend should be declared or a bonus paid. Also, reflect on your business performance and set some goals for the next financial year. Consider pricing or fee structures for the new financial year and communicate these increases with your customers. Update your business plan and budgets for FY2025. Evaluate your accounting software and if any add-on apps could enhance efficiency and productivity. A little planning can go a long way.
Other things to consider
Trust distribution resolutions are required prior to 30th June 2024 if you trade through a trust.
It might feel like it’s ages away, but EOFY is going to sneak up in no time! Now is the perfect time to get organised, tick off your to-do list and refocus on what truly matters – running your business with confidence and clarity.
If you need any help and support for EOFY, please don’t hesitate to reach out to us, book a discovery call with us today!
