The end of the financial year is fast approaching and there are a range of taxation issues that businesses have to consider. It is important that you are aware of these issues and get everything in order before 30 June 2015.
ATO tax obligations
Take care of any ATO debt you have as soon as possible. Many businesses accrue tax debt by failing to pay their business activity statement (BAS) on time, or through mismanagement of financial obligations such as PAYG withholding or superannuation contributions. A full year’s reconciliation of GST and PAYG withholdings should be done before lodgement of the June Quarter BAS.
If you can’t afford to pay in full, negotiate a repayment plan with the ATO. Small businesses experiencing short-term financial difficulties may be eligible for interest-free payment plans for activity statement debts for up to 12 months. We can assist you to liaise with the ATO on this matter.
Get ready for SuperStream
From 1 July 2015 small employers (19 or less employees) – and SMSFs receiving contributions from these employers have an obligation to start using the SuperStream standard for contributions. This standard involves the sending and receiving of contributions electronically in a prescribed format, with linked data and payments. If you need help in this regard, please contact us on or call us on 02 9223 9166 or submit an online enquiry.
Remember that superannuation contributions must be paid prior to 30 June to obtain a tax deduction.
The Government has proposed to expand accelerated depreciation by allowing small businesses with an aggregated annual turnover of less than $2 million to immediately deduct each asset that costs less than $20,000. This measure applies to assets acquired from 7.30pm on 12 May 2015 until 30 June 2017.
Motor vehicle work-related deductions
You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee. The log book method is recommended ahead of the statutory method or the cents per kilometre method. Remember that a log book has a finite life of 5 years. If you establish your business-use percentage using a logbook from an earlier year, you must keep that logbook and maintain odometer readings in the following years. Check to ensure you comply with these requirements.
Shareholder loans accounts
Shareholder/director company loans should be kept in credit rather than in debit, otherwise Division 7A tax applies. Therefore it is imperative to repay all shareholder loans before June 30 in order to avoid this.
If a shareholder/director loan is repaid by the earlier of the due date for lodgement, or date of lodgement of the trust’s tax return for the income year in which the loan is made, the loan will not be treated as a dividend.
Trust Distribution minutes
The trustee of a trust is responsible for managing the trust’s tax affairs, including lodging trust tax returns and paying tax liabilities arising from assessments made to them. All trustees who make beneficiaries entitled to trust income by way of a resolution must do so by the end of an income year (30 June). This resolution will determine who is to be assessed on the trust’s taxable income.
It is always easier to legally minimise your taxation liability prior to 30 June. Why not contact our experienced team, of accountants and tax agents who can assist you with all of your taxation needs. For more information submit an online enquiry or call us on 02 9223 9166 to book an appointment.