Another financial year is about to finish!

As a business owner, there are many obligations that you need to consider and action over the next few weeks. We have outlined some of these below to assist you.

Key 2013 Year End Reminders

Date

Action Required

Before

30 June 2013

  • Ensure your employee superannuation payments are received and allocated by your employees’ super fund prior to 30 June 2013 to ensure a tax deduction for this year. Keep in mind that 30 June is a Sunday so allow plenty of time for this to happen. Any payments made between 1 July 2013 and 28 July 2013 will count towards your Superannuation Guarantee requirement but will not be tax deductible until the 2014 financial year.
  • Review shareholder loan accounts and make minimum loan repayments in a Company
  • Ensure that a Trust Distribution Resolution for each Trust is signed by 30 June 2013 for any Family Trust.
  • Review 2013 LAST MINUTE strategies to reduce your tax prior to 30 June 2013.
  • Carry out a stocktake by 30 June 2013 if you are carrying any stock.

1 July 2013

  • Superannuation guarantee rate increases from 9% to 9.25%.
  • Employees aged 70 and over become entitled to superannuation guarantee contributions.

14 July 2013 or before

  • Provide 2013 PAYG Payment Summaries to all employees

28 July 2013

  • Taxable Payments Annual Report due for lodgement with the ATO. This is a NEW requirement for 2013.
  • Quarterly Superannuation contributions due for employees (for the period 1 April 2013 to 30 June 2013).  THIS IS A KEY DEADLINE!

(Note: If you fail to meet your requirements by 28 July 2013, you must complete a Superannuation Guarantee Charge Statement and forward it to the ATO together with underpaid superannuation plus administration fees and interest by 14 August 2013. Superannuation Guarantee Charge payments are NOT tax deductible.)

14 August 2013 or before

  • Lodge your 2013 Annual PAYG Payment Summary Statement with the ATO. Penalties apply for late lodgement.

NEW Superannuation Rates – Have you updated your Payroll Systems?

From 1 July 2013, employers need to increase the minimum rate for superannuation guarantee contributions from 9% to 9.25%. This rate is proposed to increase in future years as well.

Also, from 1 July 2013, employers are required to make superannuation guarantee contributions for eligible employees aged 70 years and over.

Action Step: Update your payroll processes and systems to ensure that the changes to the law are applied properly from 1 July 2013.

Note: If you use the XERO online accounting and payroll system, you do not need to update the superannuation rates, since XERO will automatically do this for you on 1 July 2013. Another great reason for using XERO!

Deadline for 2013 PAYG Payment Summaries

You need to provide your 2013 PAYG Payment Summaries to your employees and other workers by 14 July 2013.

Action Step: If you have any doubt about how to correctly complete your 2013 PAYG Payment Summaries, please contact us for assistance BEFORE you prepare them.

NEW – Building and Construction Industry Reporting

From 1 July 2012, new tax reporting rules apply for businesses in the building and construction industry. Businesses will have to lodge an annual report with the ATO setting out details of payments made to contractors. This will assist the ATO to reduce the “cash economy” by ensuring tax is paid on all income including “cash” payments.

From 1 July 2012, you will need to record the following details of all payments made to contractors from 1 July 2012 for building and construction services:

  • The ABN of the contractor
  • The name and address of the contractor
  • The gross amount paid for the financial year, including GST
  • The total GST included in the gross amount paid

If you use computerised accounting software, your system should be able to track this information for you and prepare the required Taxable Payments Annual Report.

Action Step:  Ensure that you lodge your Taxable Payments Annual Report with the ATO no later than 28 July 2013.

NEW – Living away from home allowance changes

If you are paying a living away from home allowance (LAFHA) to any employees who are working away from home, there are a number of changes that apply from 1 October 2012 that may affect you and your employees.

  • From 1 October 2012, most employees will need to pass new tests to access the LAFHA tax concessions. If the requirements are not satisfied, then the full value of the LAFHA will be subject to FBT in the hands of the employer.
  • The main condition that needs to be satisfied is that the employee must have a normal place of residence in Australia that is maintained for their “personal use and enjoyment” while they are living and working in another location. It cannot be rented out or sub-let while they are away. In most cases, LAFHA’s will also be time limited to 12 months.
  • Certain transitional arrangements apply to employees who had LAFHA arrangements in place before 7:30pm AEST on 8 May 2012. Special rules can also apply to employees working on a fly-in fly-out or drive-in drive-out basis.

Action Step: If you are providing LAFHA benefits, then please contact us immediately for assistance in planning for these changes.

Payroll Tax

Payroll tax applies to all entities that have an Australian payroll that exceeds state-based limits.

You should note that in addition to normal salaries and wages, the following items are generally also included in payroll expenses if payroll tax applies:

  • fringe benefits based on the grossed-up taxable value of fringe benefits;
  • all employer contributions to superannuation on behalf of employees; and
  • some contractor or sub-contractor fees.

For more detailed information about whether payroll tax applies to your business, please contact our office.

Action Step: The Annual Return/Reconciliation for payroll tax must be lodged by 21 July 2013 with your State Revenue Office.

WorkCover/WorkSafe

Your WorkCover/WorkSafe insurer sends an annual reconciliation to all registered employers at the end of the financial year.

In completing your annual reconciliation, you will need to include the following items in addition to normal salaries and wages:

  • fringe benefits based on the taxable value of fringe benefits (do not gross-up);
  • all employer contributions to superannuation on behalf of employees; and
  • some contractor or sub-contractor fees.

For more detailed information about what items to include in the reconciliation statement, please contact our office.

Once the reconciliation is received and processed by your WorkCover/WorkSafe insurer, you will be issued with a final assessment or a refund depending on the instalments you have paid during the year.

Action Step: Complete and lodge the Annual Reconciliation with your WorkCover/WorkSafe insurer by the due date.

Goods and Services Tax (GST)

A reconciliation of GST should be performed as at 30 June 2013 to determine if there has been an under or over-payment of GST in the 2013 tax year. If a discrepancy has arisen, then it is possible to amend a subsequent Business Activity Statement (BAS) to rectify the error, however there are limits imposed on adjustments that can be made in this way.

Income declared on your BAS should be reconciled to income declared on your income tax returns.

Also, please note that you are required by law to substantiate all Input Tax Credit claims with a complying Tax Invoice, and you need to retain these documents for a minimum of 5 years.

Action Step: Complete the annual GST reconciliations, and check that you have all required tax invoices and other supporting documents.

 ATO Audit Activity

Please note that the ATO and State Revenue Office are constantly increasing their audit activities. In particular, there has been an increase in audit activity for PAYG Withholding, Payroll Tax, WorkCover, GST, Division 7A loan accounts from companies, and Trust distributions from Discretionary Trusts.

We are able to offer a review of your records and record-keeping procedures if you are concerned about your ability to satisfy an audit.

Action Step: Please contact our office if you would like to request this service.

Last Minute Tax Minimisation Tips

Here’s a few final reminders about ways to reduce your tax for 2013

  1. Write-off Bad Debts
  2. Write-off any trading stock that is damaged or obsolete
  3. Review your asset register and scrap any obsolete plant and equipment
  4. Pay for repairs, consumables, office stationery, and donations before 30 June 2013
  5. Realise any capital losses you have before 30 June 2013 to offset against any capital gains you may have made

2013-14 Tax Tables

For most employers, the tax tables they currently use (or tax rates built into your payroll software) will remain the same, as there were no changes to the income tax rates or thresholds for the 2013-14 year.

Employers will need to update the tax tables or software they use if they make payments to employees, who:

  • have a Higher Education Loan Program (HELP) or Student Financial Supplement Scheme (SFSS) debt
  • received an employment termination payment or back payments, commissions, bonuses and similar payments, and/or
  • are claiming the seniors and pensioners tax offset.

Employers who make these payments and need the updated tax tables should visit ato.gov.au/taxtables

Don’t forget, the Leader Accountancy Team are available all throughout the year to assist you with any accounting, taxation, and financial planning requirements. We’re here to help you!

Share This