Essential EOFY Preparation for Small Business

As you will be aware, the end of the 2020 financial year is quickly coming to a close and end of financial year preparations for Small Businesses are as important as ever.

Many of our business clients would love to press "CTRL-ALT-DELETE" for 2020, reset and start again. As a country we have been impacted by bushfires and now mass shutdowns because of Coronavirus all of which have had differing impacts on small businesses across Australia.

For the majority of our business clients, they have learnt new ways to do business. They have pivoted and changed direction and some are now more profitable this year than they were in 2018/19, especially when factoring in the JobKeeper Payments, ATO Cashflow Boosts and the State Government Grants available.

The aim of this email is to provide you with some very timely information to help you before the end of this financial year, but also will provide you with options to make running your business easier.


Employer End Of Year Reporting (STP Finalisation)


STP finalisations need to be filed with the ATO either:

  • before the 14th of July for employers with more than 20 employees

OR

  • by the 31st of July for employers with 19 employees or less

In addition, as an employer, you may also need to complete the Annual WorkCover Certification and Payroll Tax Declaration. If you would like Suntax to look after all of your year end employer reporting, please click the button below.

Click here for Suntax To Prepare Your Employer Reporting



End Of Year Tax Planning


Immediate write-off changes for Small Business Entity (SBE) Depreciation


Recent changes to SBE depreciation means that from the 12th March to the 31st of December 2020 the immediate asset write off threshold has been increased from $30,000 to $150,000

Your asset must be purchased and available for use by 30th of June 2020 to claim a tax deduction in the 2019/20 financial year.

These changes also give businesses the ability to write off balances below $150,000 for existing SBE pool balances for existing assets. Please note, this immediate write-off also applies to motor vehicle purchases, BUT motor vehicles have a maximum deductible cost limit of $59,136.


Claiming a deduction for Superannuation Contributions?

Ensure that any contributions are paid to your Superannuation fund before the 24th June to guarantee the deductions are processed before the end of the financial year.

If you have had a profitable year, a contribution into your superannuation fund will reduce your overall tax burden. Just be aware that the maximum deductible superannuation contribution that each person can claim for 2019/20 is $25,000.

 

Prepayment of expenses

You may claim an immediate deduction for pre-paid business expenses where the expenditure is for less than 12 months if you’re a small business with aggregated turnover of less than $10 million. These pre-payments can include expenses such as rent, interest, insurance, repairs, travel and advertising.


New Motor Vehicle Cents Per Kilometre Claim

After a few years on the same rate, the ATO have increased the deduction for cents per kilometre (CPKM) deductions to 72 CPKM.  This will take effect from the 1st of July 2020. This deduction is still limited to a maximum of 5,000 kilometres for work or business travel in your personal car.


Superannuation Guarantee Amnesty ends soon

For employers that may have missed complying with the Superannuation Guarantee rules for their employees, there is a Superannuation Guarantee Amnesty which finishes on the 7th of September 2020.

If you take up this amnesty, you will be able to claim a tax deduction for the 'back payments' for superannuation contributions accrued between 1 July 1992 and 31 March 2018. These are normally not tax deductible.

Additionally, no administration fees and penalties will apply before the cut off date.

Our expectation is that if you are behind and you do not take up the amnesty, the ATO will 'throw the book' at you as an employer.

To apply for the amnesty, you can click the button below or call our office to discuss.

Apply For Superannuation Amnesty


JobKeeper

If you’re already eligible for JobKeeper:

  • Future monthly declarations MUST BE be completed prior to the 14th of the month, the ATO have no leniency with this. If you do not complete your monthly declaration, you will not be paid even if you are eligible for JobKeeper.

If you’re not currently eligible for JobKeeper:

  • You may still be eligible for the upcoming periods of the JobKeeper scheme even though you may not have been eligible for the past months of March, April or May.
  • To qualify under the Basic test, typically a business needs to exhibit a 30% decline in turnover for the test month in comparison with the same month in the previous financial year.
  • If the basic test doesn’t apply alternative methods of testing are available dependent on individual circumstance.

For clients that have requested Suntax to look after their monthly JobKeeper Declarations, you will receive an email next week to complete the June declaration.


New Income Items for 2020

Due to the current state of affairs there has been the emergence of some new income items for the 2020 financial year. Below is a summary of the new income lines that need to be added to your bookkeeping programs together with the tax implications of these payments.

Income Type
Tax Implication
GST Implication
Other Income: ATO Cash Flow Boost
Tax-Free
GST-Free
Other Income: Victorian Government Grant
Assessable Income
GST-Free
Other Income: JobKeeper Wage Subsidy
Assessable Income
GST-Free
Other Income: Apprentice Rebates
Assessable Income
GST-Free

 


Upcoming June Cashflow Boost

Businesses that are eligible for the Cashflow Boost must ensure they lodge their June 2020 BAS in order for the credit to be applied. This is applicable to both monthly and also quarterly BAS lodgers. 


Bookkeeping 

Struggling to keep up with Bookkeeping? – Suntax is here to help

Meet Michelle Wallace, our bookkeeping superstar for our business clients.

Michelle is a guru in Xero and has also worked extensively with MYOB and Quickbooks. As we introduce our clients to the benefit of cloud accounting, Michelle has been instrumental in converting clients across to Xero.

If you are interested in starting the new year with Xero, please give Michelle a call on 03 8746-7700

Michelle can also help you with your day-to day bookkeeping requirements, payroll and BAS preparation, allowing you to:

  • Reduce your time spent on mundane paperwork allowing you to spend more time working on your business and with your clients and customers
  • Take annual leave knowing your payroll and business bookkeeping will be kept up to date.
  • Keep all of your lodgments up to date
  • Take away unnecessary stress
  • Have peace of mind knowing that your accounts will be up to date and correct


Details to Bring To Your 2019/20 Tax Appointment

Please find attached the list of documents that you will need to bring with you to your 2019/20 business tax appointment. By ensuring all documents are available in your appointment we will be able to start and finish your tax in the most efficient time.


We would like to congratulate our loyal business clients for their hard work, creativity and their ability to change during this pandemic. The stories have been inspiring and the tough decisions made have demonstrated great business acumen.  It has been testing and frustrating times for everyone, but as business owners you have the additional burden and risk of not only putting food on your families table, but by keeping your employees employed and your suppliers paid you have also supported so many more family's and small businesses during this pandemic. We take our hats off to you and acknowledge your hard work.

It has been amazing to see all sides of Governments, banks, landlords and communities come together to help small businesses get through this tough time. As always, if you need a chat or someone to bounce an idea off, we are only a phone call away. Together we will get through this.