Tax Time Taking care of business
The Australian Taxation Office (ATO) is encouraging small businesses to get organised at the beginning of the new financial year by taking care of business now. Assistant Commissioner Deborah Jenkins says that thousands of small businesses register every month, which means there are a lot of new business owners about to have their first tax time experience. “We understand that around 50% of small businesses come under financial pressure within the first year, and one of the biggest issues is cash flow,” she said. With this in mind, Ms Jenkins has five tips for small businesses to help them get a head start on the new year. 1. Stay informed There are a number of new measures that small businesses might be able to take advantage of this year. For example, the turnover threshold for a wide range of concessions has changed and there’s a lower company tax rate for small business. It is a good idea to work out if your circumstances have changed and see whether you can benefit from the measures before you get into tax time. The best way to keep up with what’s new for small business is to follow the Small Business Newsroom at ato.gov.au/sbnews. 2. Get on top of your records Good record keeping is essential for anyone in business because it makes it easier to manage your cash flow, meet your tax obligations and
understand how your business is doing. If you get your records together now, when it’s time to do your tax you’ll have all the information at hand and won’t need to go rummaging through a shoe box of paper receipts. You can use your records to compare yourself against the ATO’s small business benchmarks and check how your business is performing against similar businesses in the same industry. For more information and advice on good record keeping practice, visit ato.gov.au/ electronicrecordkeeping and to find out how competitive your business is, use the small business benchmarks, visit ato.gov.au/ businessbenchmarks. 3. Find ways to make it easier The ATO has a range of products and tools to make it easier for small businesses to stay on top of their tax and super obligations. For example, you can do most of your business reporting and transactions with the ATO online, so it’s a good idea to familiarise yourself with the ATO website to see where you can save yourself time. If you are sole trader, you can lodge your returns using a registered tax agent or myTax. For the first time this year, sole traders can also use the myDeductions tool in the ATO app to keep track of your business expenses. From 1 July 2017, goods and services tax (GST) reporting on the business activity statement (BAS) will be easier with Simpler BAS. Small businesses will be required to report less GST information, which will reduce the complexity of bookkeeping
and reporting, saving you time and money. To find out more, visit ato.gov.au/simplerbas. 4. Look after your employees If you have staff, it’s important that you do the right thing by them by making sure you meet your deadlines for your employer obligations, including their payment summaries and superannuation guarantee payments. You need to issue payment summaries to employees by July 14 and you need to lodge your PAYG withholding payment summary annual report to the ATO by August 14. You should also make sure you know if your workers are employees or contractors because this can affect your obligations. There is a decision tool available online to help you get it right at ato.gov.au/ecinfo. 5. Know where to get help Around 95% of small businesses use a registered tax professional to lodge their returns, so it’s likely that your agent will be your first point of call. You can also call the ATO and speak with someone over the phone because we’re here to help. We’ve trained more than 4,000 staff to be able to assist small business owners who are dealing with difficult circumstances, including those who are managing mental health issues. If you have a debt that you can’t pay on time, you might even be able to organise a payment plan online. For more information, visit ato.gov. au/debt or to find out about how the ATO can help, visit ato.gov.au/sbsupport.
TALKING TAX How do I lodge my tax return? Most taxpayers go to an accountant to ensure the return is prepared correctly and that the maximum is claimed to ensure that the best possible tax refund is issued from the ATO. The ATO is checking more information than ever before, please make sure all receipts/invoices are kept and all log books completed accurately. When is my tax return due for lodgement? - If you visited a registered tax agent last year you will be on their ATO lodgement list. In most cases you will have an extension period to lodge your 2016/17 tax return. Lodgement should be by March 18, 2018. - If this is the first time using an agent, please visit us by the 31st October to ensure you can be added to our ATO lodgement list to receive the additional time to lodge. - If you lodge your own return, the ATO must receive the return by the 31st October. What should I bring to my appointment? • You should bring your Payment Summaries; • The amount of Interest earned from banks on any savings during the year; • Dividend Statements, buy/sell details of shares or land and buildings; • Any receipts/invoices for work related expenses. • Fees for the Preparation of last years’ return; • Rental Property Income & Expenses incurred during the year;
• Donations made to charities (this does not include ticket purchases) or school building funds; • Income Protection Insurance amounts paid during the year. • Please bring in phone bills, electricity accounts, etc to appointments. Remember it is better to have more information than not and we can go through this to ensure correct claims will be made. Motor Vehicle Claim – Bulky Work Tools Can only be claimed where ALL of the following conditions are satisfied: - The equipment is required for the employee to carry our their duties on that day - It must be essential to transport the equipment to and from work (not just personal choice or convenience) - The equipment is sufficiently bulky and/or heavy making it impractical to transport other than by own vehicle - There is no reasonably secure storage area provided by the employer. The ATO are phoning employers and checking this. Self Education Costs Expenses will not be deductible if the course is designed to enable you to obtain new employment or start up a new income-earning activity. Superannuation Employer Super Contributions are 9.5% for the 2018 financial year.
The concessional contributions cap is $25,000 for all age groups for 2017/18. (This includes the 9.5%SG, salary sacrifice amounts, member contributions). I employ staff what should I do at the end of June? - Ensure you provide your employees with their Payment Summary. You have until the 14th August to provide the ATO with the Annual PAYG Payment Summary Statement. - Check your classification with Workcover Qld to ensure that the staff wages are allocated correctly. - Minimum Wages increase from the pay period that starts on the 1st July. You need to check your employee’s minimum entitlements to make sure you’re meeting your obligations – even if you’re covered by an agreement or pay above the award wages. You can check with fairwork.gov.au to check the A-Z Modern Awards to ensure you are meeting your obligations. At the Fairwork website you can also check on Minimum working conditions, Apprentices & Trainees, Notice Periods, Holiday & Leave calculation. - Make sure your software is up to date with the latest tax tables. Building & Construction Industry The “Taxable Payments Annual Report” is due at the ATO by the 28th August if you lodge your BAS on a quarterly basis.
If you have any queries please do not hesitate to contact Leisa or Michelle @ Hinterland Accounting Services for further information. Ph: 5439 0188 Glasshouse Country & Maleny News
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