The end of the financial year (EOFY) can be a headache for already overworked business owners, with the date looming closer. So here’s a quick checklist of things you need to tick off when it comes to tax and EOFY.
1. Get Your Accounts in Order
If you work on your accounts regularly, this won’t be such a problem. But if you tend to push everything to one side, you may have a large backlog to catch up on. Moving from paper or Excel accounts to professional accounting software can help you here, as it will automate a lot of tasks such as bank transactions. Miscoding these is the top mistake made by small businesses, according to a survey of members of the Institute of Public Accountants (IPA).
Digitising your expenses is another way to avoid the huge EOFY shoebox of fading taxi and coffee receipts. There are many apps that can scan and store receipts for you so you don’t have to worry about losing or maintaining receipts.
2. Understand Any Changes in Regulation
Tax laws change frequently, so it’s important to stay on top of which new regulations could affect you, such as the instant asset write-off for small businesses. The ATO website is one way to stay up to date, but if you use a professional accountant or tax agent to help file your taxes, they should also have all the details.
3. Chase Up Outstanding Payments
Chase up unpaid and overdue invoices well ahead of time. Using an automated system can help with this, as it will follow up for you if bills aren’t paid. Likewise, don’t forget to pay your own bills as well.
4. Find Out Your Deductions
There’s no point paying more tax than you need to, so find out what you can claim as deductions. Under new laws starting 1 July, startups are entitled to more deductions. So if you have a new business, there are more professional and government fees you can deduct.
It may be worth prepaying for services and supplies to get a deduction, as well as replacing fully depreciated assets. Check your inventory so you can write down unsold stock.
5. Complete Your BAS
Depending on whether you lodge your BAS monthly or quarterly, it will either be due on 28 July (quarterly) or on the 21st of the month (monthly).
You have a bit more time to lodge your income tax return. If you do it yourself, the deadline is 31 October. Your annual GST lodgement and payment is also due on this date. If you use a registered tax agent, you’ll have a bit more time depending on your business.
The ATO charges billions every year in tax-breach penalties, with smaller businesses taking the heaviest share, so don’t get caught out with ‘FTL’ (failure to lodge) penalties.
Finally, don’t forget to plan for the next financial year. EOFY isn’t just about filing your taxes – it’s also a good opportunity to review your progress over the past 12 months and consider your strategy for the next year.