The end of the financial year is only one month away and business owners might be wondering what they can do to ensure they're fully prepared and taking advantage of available tax relief.
Avoid the Superannuation Guarantee Charge ('SGC')
If you use a commercial clearing house to remit the statutory superannuation for your employees, you might be forgiven for thinking if you send it on or before the due date you're compliant. But not necessarily.
Clearing houses can take up to 10 days to fully process and distribute superannuation payments to various employee super funds. So if you remit your superannuation on or close to the due date, in the eyes of the ATO, you could be late and liable for a superannuation guarantee charge ('SGC') and/or other penalties. Even if you are just one day late!
To ensure you are compliant, eligible for a tax deduction, and avoid the SGC/penalties, you should remit your superannuation payments to clearing houses well in advance of the due date.
The June 21 quarter is due by 28th July.
We recommend you remit your June 21 quarter superannuation payments as soon as possible after the 1st July, and certainly prior to 18th July - this gives your commercial clearing house plenty of time to process your payments on time.
Remember, it will be your fault if it's late, not theirs.
Note that if you use the Small Business Superannuation Clearing House, payments are considered paid on the date they are received.
Temporary Full Expensing - Up Front Asset Write Offs
If you've got some working capital available, and you're contemplating investing in value adding assets for your business, now is a great time.
The Federal Government has extended the instant asset write off provisions (now dubbed 'Temporary Full Expensing') already expanded last year during the early stages of the COVID-19 pandemic.
Eligible new depreciating assets with a value up to $150k can be fully expensed by businesses with an annual aggregated turnover under $5b (let's be honest, that's most of us!). Eligible second hand assets with a value up to $150k can be fully expensed, by businesses with an annual aggregated turnover under $50m.
Account for Government Payments Correctly
This financial year as seen some unprecedented financial assistance for Australian business. You need to make sure that payments received from the Government are recoded correctly to ensure they are treated appropriately come tax time.
Don't assume that Government payments are tax exempt. Here is a list of just some of the payments that are classified as assessable income. This is not a comprehensive list, just some of the more common payments.
JobKeeper payments (COVID-19)
Supporting Apprentices and Trainees wage subsidy (COVID-19)
grants, such as an amount you receive under the Australian Apprenticeships Incentives Program.
Note that cash flow boosts (COVID-19) are NOT assessable.