So we find ourselves at the End of Financial Year again. First of all, how on earth did it come around so fast! and second who is looking forward to the EOFY sales?!?! 😊
Apart from the great sales, EOFY is also an important time to get you and your biz in tip top financial shape to ensure you are compliant (the keep you out of jail stuff) and also to plan and execute before 30 June so you don't miss out on some handy tax deductions and have to pay more tax than your fair share. So here is what we believe are the EOFY essentials (warning - there is a fair amount to cover so stick with us):
TAX PLANNING
What is It?
There are a few components to tax planning, the most obvious one is helping you to take advantage of opportunities to reduce (or defer) your taxable income, and therefore your tax payable for the year. The other part to tax planning is estimating your taxable income for the year and therefore your tax payable/refundable so that you are prepared for what is to come. There is nothing worse than a surprise tax bill when you go to prepare your tax return! Bill shock anyone 🤯
Where can I find more information?
So glad you asked! We have a detailed blog post about this here. We also encourage you to book in an appointment with us to discuss specific tax planning opportunities that are personalised to your circumstances, you can do that here
When is it due?
Everything must be finalised by 30 June
FRINGE BENEFITS TAX RETURNS
What is It?
Fringe Benefits Tax (FBT) is a payment to an employee in a different form to your normal salary and wages, with the main one we see being employees/business owners using the work car for private purposes. Other “payments” that are subject to FBT include providing gym memberships for your employees, providing them with car parking or paying for their private expenses.
After the end of each FBT year, being 31 March (because having everything ending 30 June would’ve made our job too easy 😉), employers need to report to the ATO the value of benefits provided to employees/directors/beneficiaries and calculate if any FBT is payable.
Where can I find more information?
Well wouldn't you know it we have a blog on this one too, just click here ... we know we know ... #yourwelcome. The ATO website also has some pretty good info you can read up on here. We’ll be in touch with you soon if you’re on our FBT radar so we can work our magic and lodge your FBT return.
When is it due?
Everything must be finalised by 26 June.
TRUST DISTRIBUTION MINUTES
What is It?
Supercalifragilisticexpialidociousy important, and yes, we’re being serious here. Prior to the end of the financial year, there needs to be a resolution made of who will become presently entitled to the income of the trust that year.
The minute must comply with the terms of your trust deed and must set out unambiguously where the income will go, along with some other important details. Without an effective distribution minute, the trustee will be assessed on the trust’s taxable income at the top marginal tax rate which we want to avoid! I mean, who wouldn't (and yes we are aware we used some very big words in that paragraph because that's how important it is)
Where can I find more information?
We’ll be engaging with our clients if you have a trust so we can ensure that you have an effective trust distribution minute in place and signed prior to 30 June. If you wanna DIY it yourself, feel free to read up from the ATO here.
When is it due?
Everything must be finalised by 30 June
SUPERANNUATION CONTRIBUTIONS
What is It?
In short, super is money put aside by your employer or you, over your working life for you to live on when you retire from work. In order to be allowed to claim a tax deduction for a superannuation contribution, whether as part of your compulsory super guarantee payments for employees or a voluntary contribution for yourself, the payment must be received by the superannuation fund by 30 June each year. This means that simply leaving your bank account is not good enough, the money must be received by the fund. If you miss this deadline, the payment will become deductible in the next financial year but can cause you issues with contribution caps and that is a whole other topic for another day.
Where can I find more information?
Yes we have a blog on this one too, you can read up here. If you are not currently using Auto Superannuation with Xero (tip: you should be, it is super (!) easy to use 😉) , you can find more information here
When is it due?
Funds must be received by the relevant superannuation fund by 30 June. Xero recommends payments made using their auto superannuation function should be processed by 14 June 2023 to allow time for the payment to clear.
SMSF MINIMUM PENSION PAYMENTS
What is It?
If you have a self managed super fund (SMSF) and are drawing a pension, there is a minimum amount that must be taken from your account each year as pension payments. This amount is determined by applying an aged based percentage to your opening account balance at 1 July. The 2023 year is the final year in which this percentage has been reduced by 50% due to Covid assistance measures.
Where can I find more information?
No blog here as you will need to consult with us or your relevant financial advisor to obtain the amount of your minimum payment required. The ATO also has more information about minimum pensions and the percentages here
When is it due?
Payment must be made from the fund by 30 June
EOFY STOCKTAKE
What is It?
If you have trading stock for your business, you are required to include the value of the stock on hand in your financial statements each year. This means that you will need to perform a stock take around 30 June each year to get the value of your stock on hand.
There are some simplified rules for those businesses with turnover less than $10 million each year. For these businesses, if your stock levels change by less than $5,000 each year, you can estimate your stock on hand figure without completing a formal stock take. The requirement for this would be that you have systems in place to enable you to keep track of your stock levels. This is where a good inventory software system comes into play, and we can help guide you on this if you need!
(PS. we imagine every stock take looking like the above, please don't burst our bubble 😂)
Where can I find more information?
Vend have some great tips on how to conduct a stock take here
When is it due?
As close to 30 June as possible
STP FINALISATION
What is It?
Even though your employees may still ask you for a payment summary (or a group certificate for those that are showing their age!) there is no longer a need to physically provide your employees with any documentation for their year end wages finalisation (YES you read that right). Instead, you now finalise the year end payroll in payroll software using Single Touch Payroll and this sends all of the relevant information to the ATO and other government departments. This information will then become available to your employees on their MyGov login.
Where can I find more information?
Xero have some great resources to assist you with your EOFY payroll finalisation here
If you need assistance, as always, we are here to help, so please reach out!
When is it due?
STP Finalisation must be completed by 14 July. You can actually lodge this before 30 June 2023 if you have completed your final payroll payments for the year 😉
TAXABLE PAYMENTS ANNUAL REPORT (TPAR)
What is It?
In an effort to crack down on the cash economy (yes the taxman-ian devil aka the ATO are trying) certain industries need to report payments made to contractors. The industries include building and construction, cleaning services, road freight and courier services, IT services and security, investigation and surveillance services.
The information that is included in the report for each contractor each year includes their:
ABN
Name,
Address,
Total amount paid,
Total GST paid
Any tax withheld for not quoting an ABN
The TPAR report can be prepared using Xero and can pull all the relevant information from your Xero file if you have set up your contacts correctly. Phew ...
Where can I find more information?
The ATO have some guidance on TPAR here
Xero also have some guidance on how to prepare the report using their software here
When is it due?
The report must be lodged with the ATO by 28 August
RETURN TO WORK RECONCILIATION
What is It?
Every employer in South Australia who pays wages of more than $13,760 must register for Return to Work (RTW). This provides employees with work injury insurance. When you register, and each year there after you provide RTW with an estimate of your annual wages, and they calculate you an annual premium that you pay in monthly instalments. At the end of each financial year you then lodge an annual reconciliation with RTW to report your actual wages paid, and your final actual premium is calculated. If you have under paid throughout the year, there will be a final payment due. If you have overpaid throughout the year you will receive a refund of the difference.
Where can I find more information?
Return to Work SA has more information about the annual remuneration return here
If you need assistance calculating and lodging your return please reach out to us and we can help!
When is it due?
The return must be lodged with the RTWSA by 15 September
Well we can tell you we are officially exhausted from writing this blog, so you must be exhausted from reading it. If you got to the end, high 5's all round, you bloody deserve it!
Still have questions? That's OK, feel free to make contact with one of our oh so cool not nerdy at all team members today.
Disclaimer: The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice