Employer Alert

 

Empolyer Alert 

The end of the financial year is only days away

Employer Alert

As an employer you need to:

  1. Provide PAYG Payment Summaries to your employees by the 14th July 2016.
  2. Please ensure you send the ATO, your PAYG withholding payment summary annual report by the 14th August 2016.
  1. Use the latest tax rates to calculate employee withholding tax from 1st July 2016. While there have been no changes to tax rates for 2016/17, to check the latest rates, go to ato.gov.au/taxtables
  1. Ensure your accounting software payroll rates are updated from the 1st July 2016 and the file is ready for the first pay run of the 2017 year.
  1. All employee Superannuation Guarantee Charges have been met for the 2015/16 financial year. Please note the June Quarter SGC is due by the 28th July 2016.

 

If you have any questions on your EOFY obligations to the ATO, please do not hesitate to contact us.

Using EOFY to strengthen your business

McAdam Siemon Business Accountants Upper Mt Gravatt, Noosa Heads & Maroochydore. Specialising in Accounting, Taxation, Management Rights, SMSF Administration, Business Advisory, Business Valuations , Management Rights specialist accountants

Using EOFY to strengthen your business

(source: Sean O’Meara) 

With the end of the financial year quickly approaching it is critical that small business owners use this time to make a strong plan for the year ahead. It is vital to analyse your business and try to find any opportunities and improvements that can be made, no matter how small they may seem.

The additional administration time required at EOFY can make the lead up to 30 June extremely stressful. So the keep your business goals in check. Here are some strategies that will improve your business to maximise your growth in 2016/2017.

It’s time to review your businesses situation 

You are probably already using reporting throughout the year to track your revenue, gauge your sales trends etc but it is important to take a second look at how your business performed on the whole and compare this to previous years.

“By looking at year-on-year sales and revenue we can see how public holidays or seasonal changes affect the business and enables us to do more accurate forecasting, rostering and budgeting for the year ahead. It also helps us make informed decisions on whether to spend now or later,”

Take advantage on the low interest rates

Interest rates remain low so it could be an opportunity to invest in capital equipment and paying off debts. 

Review business partners and suppliers

Ensure you are getting an excellent price for quality products. New businesses keep coming into the market, so be sure to do your research and renegotiate with your present partners and suppliers.

Your customers are probably reviewing their own strategic plan and making changes for next year so don’t forget to let them know that their business matters to you.

Take a long – term view of your cashflow 

  • How is your cashflow?
  • Is your business seasonal, with peaks and troughs?

Do some advanced planning -review your budget and anticipate what may happen in the year ahead. It may be all that is needed to free up liquid assets and ensure ongoing profitability. This is the best way to ensure you have safeguards in place to keep your business afloat during low times. 

Capitalise on tax breaks 

  • Have you any expenses that can be pre-paid?
  • Think about maximising your superannuation contributions to the relevant caps.
  • Consider investing in areas that will support your business; new equipment and/or technology that will provide your business with greater efficiencies and productivity The Government still has an immediate tax deduction on assets coasting less than $20,000.

Don’t hesitate to give us a call if you would like to discuss anything EOFY’s.

Kind regards

The Team at McAdam Siemon

How to use the EOFY to strengthen your business

EOFYs blackboard

How to use the EOFY to strengthen your business

Many small business owners fall into the trap of managing business operations in a routine way without looking at their “side mirrors” or “blind spots” where new opportunities might come into view. However, with the End of Financial Year just around the corner, it’s crucial small business owners use this time to take stock and analyse the business to try and find small opportunities or improvements that could be made, and make a strong plan for the year ahead.

It can be hard enough to run a small business at the smoothest of times, but the additional administration burden at EOFY can make the lead up to 30 June an extra busy and stressful time of year for many owner-operators. However, in order to keep your business goals in check, it pays to be aware of the strategies and opportunities that will improve your business and maximize growth over the next 12 months.

Here are six ways that SMEs can use the EOFY to strengthen their business.

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Top Things To Do and Review Before 30 June

Here’s our list of the top things you need to do and review before 30 June arrives:

1. Write-off bad debts. To be a bad debt, you need to have brought the income to account as assessable income, and given up all attempts to recover the debt. It needs to be written off your debtors’ ledger by 30 June. If you don’t maintain a debtors’ ledger, a director’s minute confirming the write-off is a good idea.

2. Trading Stock. Write off any stock that is damaged or obsolete. Complete a stock take (if you are not using the simplified trading stock rules) and remember that stock can be valued at the lower of cost, replacement, or net realisable value. You can use different methods for different stock items.

3. Review your asset register and scrap any obsolete plant. Check to see if obsolete plant and equipment is sitting on your depreciation schedule. Rather than depreciating a small amount each year, if the plant has become obsolete, scrap it and write it off before 30 June. Small Business Entities can choose to pool their assets and claim one deduction for each pool. This means you only have to do one calculation for the pool rather than for each asset. It also allows you to claim an immediate deduction for depreciating assets that are bought for less than $1,000.

4. Repairs, consumables (office stationery etc), trade gifts or donations. To claim a deduction for the 2014/2015 financial year, consider paying for any required repairs, replenishing consumable supplies, trade gifts or donations before 30 June.

5. Pay June quarter employee super contributions if you want to claim a tax deduction in the current year. The next quarterly superannuation guarantee payment is due on 28 July 2015. However, some employers choose to make the payment early to bring forward the tax deduction instead of waiting another 12 months.

6. Superannuation. Don’t forget yourself. Superannuation can be a great way to get tax relief and still build your wealth position. Your personal or company sponsored contributions need to be received by the fund before June 30 to ensure deductibility.

7. Capital gains and losses. Neutralise the tax effect of any capital gains you have made during the year by realising any capital losses that you have. These need to be genuine transactions in order to be effective for tax purposes. It may be possible to contribute assets with unrealised losses to superannuation in order to do this.

8. Directors’ fees and bonuses. Declare them before 30 June and providing the company is absolutely committed to them, you are entitled to the deduction even if they have not been paid. Again, a director’s minute is a good idea. The directors and employees only need to declare this income in the year of receipt although they need to be formally notified of their entitlements by 30 June.

9. Management fees. Where management fees are being charged between related entities, make sure that the charges have been raised by June 30. Where management charges are used, make sure they are commercially reasonable and there is documentation to support this position. If any transactions are being undertaken with international related parties then the transfer pricing rules need to be considered and the ATO’s expectations in relation to documentation will be much greater. This is an area that the ATO are placing under greater scrutiny.

For Your Business

Trustees must make a decision on distributions by 1 July

Trustees need to decide on distributions of trust income by 30 June (at the latest) to ensure that beneficiaries are presently entitled to trust income for tax purposes. Trustees used to have until 31 August to make a decision but this administrative concession has been removed. If the ATO is not satisfied that the resolutions have been made in time then the risk is that the trustee or default beneficiary will be taxed on all of the trust income.

Defer your income

If possible, defer your income until the new financial year. In particular this can work for service based businesses or where you are billing your clients on a progress payment basis. Make sure that you can manage any cash flow effects that come with this one.

Manage your capital gains and losses

Remember that capital gains trigger on the date of the contract not the date of payment. Also, capital losses can only be written off against capital gains. So, if you are selling assets that will trigger a capital gain try and delay the contract until 1 July unless you have some capital losses that you are able to offset against.

Please contact either John, Rob or Sam, if you would like further information.

Minimise year end opportunities and minimise risks

The end of the financial year will be here before you know it.

In this end of financial year update, we have summarised some of the key ways you can minimise your tax and reduce your tax risks prior to 30 June.

Plus, to ensure you are prepared for the new financial year, we’ve outlined some of the key issues you should be aware of.

Key Dates

Key Dates

Your End of Financial Year Obligations

Consider this Financial ‘house-keeping’:

Software

Before rolling over your accounting software for the new financial year, make sure you:

  • Prepare your financial year end accounts. This way, any problems can be rectified and you have a ‘clean slate’ for the 1025/2016 year. Once rolled over, the software cannot be amended.
  • Do not perform a Payroll Year End function until you are sure that your payment summaries are correct and printed. Always perform a payroll back-up before you roll over the year.

PAYG Payment Summaries

You need to provide all of your staff with their PAYG Payment Summary on or before 14 July 2015. This includes any staff that left your employment during the 2014/2015 financial year.

The ATO imposes penalties for the late lodgement of their PAYG Summary Statements with penalties of up to $2,750.

The annual PAYG Summary Statement for the year ending 30 June 2015 needs to be lodged with the ATO on or before 14 August 2015.

Reportable Fringe Benefits on PAYG Payment Summaries

Where you have provided fringe benefits to your employees in excess of $2,000, you need to report the FBT grossed-up amount on their PAYG Payment Summary. This is referred to as a “Reportable Fringe Benefit”(RFB) amount and you will notice that a label is included on the PAYG Payment Summary for this purpose.

You might not need to do a stocktake – using the simplified trading stock rules

Small Business Entities (operational businesses with an aggregated turnover below $2 million) have access to a range of tax concessions. One of these concessions is the simplified trading stock rules. Under these rules, you can choose not to conduct a stocktake for tax purposes if there is a difference of less than $5,000 between the opening value of your trading stock and a reasonable estimate of the closing value of trading stock at the end of the income year. You will need to record how you determined the value of trading stock on hand.

If you would like to take advantage of the simplified trading stock rules, call us today to make sure you are eligible to use the simplified rules and to talk through how to use them properly.