Plan for tax needs KEEP ON TOP OF NEW YEAR RESOLUTIONS
THE end of the financial year spells tax time for all of us, but for small businesses this annual admin can be a real headache.
The trick is not to see tax and tax returns as a once a year event but make them part of your regular business planning.
Many companies use a bookkeeper or accountant for their tax needs, but businesses still need to be able to communicate a change in circumstances, understand if any changes to the tax system apply to their company and know exactly what deductions are claimable.
As this tax year draws to a close, it is a good time to start making new financial year resolutions so that you feel on top of tax when June 30 comes around next year.
Australian Taxation Office assistant commissioner Deborah Jenkins said good record keeping should be on the top of that list.
“Where you can, go digital. Make a resolution to keep records as you go along, particularly if a sole trader,” Ms Jenkins said.
The ATO has a range of apps and online tools to make it easy for small businesses to comply.
These include an app called My Deductions which lets you record all of your receipts as they come in, rather than delivering an old shoebox full of faded dockets to your accountant at the end of the year. There is also an online tool to help you work out whether one of your workers qualifies as an employee or a contractor and a range of webinars, webchats, information and a call-back service.
Just make sure your deductions are legitimate business deductions.
Don’t rush into purchases because everyone is advertising end of financial year deals and you want to make the most of the $20,000 instant asset write-down.
“One of my favourite stories was a trampoline purchased by a dairy farmer,” Ms Jenkins said.
“I had an image of the cows getting fit on the trampoline.”
If you do have a tax bill and are struggling to pay it, make sure you let the ATO know as soon as possible. They can give you the option of setting up a payment plan.
“Cash flow is the number one problem for small businesses,” Ms Jenkins said.
“People are pleasantly surprised how easy it is to set up a payment plan online. Just make sure you seek help early.”
The tax office has various free seminars and web help at ato.gov.au.