End of Financial Year
- Category : Accounting
From everyone at Lockwood Partners and Provide Group, we would like to thank you for your ongoing support through these uncharted and challenging circumstances. A return to business as usual in some degree is very welcome, but it is expected that we will have to deal with a number of obstacles ahead. This lack of predictability is a part of the new normal and we expect this will be the case for some time.
As a semblance of normality slowly returns to the Australian economy, we are focusing on client relationships. We endeavour to and encourage our clients to exercise flexibility and resilience while we navigate the post-pandemic economy.
Changes in 2020
2019-20 has been a tumultuous financial year. However, being at the gate of 2020-21 has given us an excellent opportunity to reflect. Some of the most significant changes which may have impacted you or your business include:
- JobKeeper Payment Scheme: Eligible businesses have been able to apply for fortnightly payments of $1,500 per employee. The support measure helps keep individuals employed in COVID-19 impacted businesses.
- Federal Budget for 2020-21 Financial Year: The 2020-21 Federal Budget has been postponed from its usual release in May to the 6 October 2020.
- Deferral of 2018-19 Company Tax Returns: The ATO has deferred the 2018-19 financial year company tax returns which are lodged through a registered tax agent (subject to approval).
- Instant Asset Write Off for Assets Up to $150,000: Instant tax write off is currently available for businesses for any assets acquired between 12 March and 31 December 2020 (pending legislative approval).
- Reduction in Company Tax Rates for Base Rate Entities: Company tax rates will be reduced to 26%, commencing from 1 July 2020.
- Government Tax Relief During COVID-19: Government stimulus packages are generally assessable and are subject to ongoing review.
- Single Touch Payroll Extension: An extension has been granted until 1 July 2021 for closely held employees.
- Employee Reporting to the ATO: Annual employee reporting to the ATO via STP must be completed by 14 June 2020 for employers with 20 or more employees or 31 June 2020 for employers with 19 or fewer employees.
- Superannuation Guarantee (SG) Amnesty: The superannuation guarantee amnesty period for historical non-compliance with the Superannuation Guarantee Contribution (SGC) is due to end on 7 December 2020.
- Employee Salary Sacrifice Contributions: New regulations have been introduced to ensure that employee salary sacrifice contributions cannot be used to reduce the amount of superannuation guarantee paid by the employer, effective 1 January 2020.
End of Financial Year Tax Tips
With the end of the financial year looming around the corner, we are working hard with clients to ensure excellent management of accounting and financial affairs. Some of our tips for 30 June 2020 include:
- Declare dividends: Declare any dividends so any outstanding shareholder loan accounts can be paid.
- Director fees and employee bonuses: These need to be paid prior to the conclusion of the financial year on 30 June 2020.
- Bad debts: Write off all bad debts.
- Asset review: Take the opportunity to review your assets and dispose of any obsolete plant and equipment items.
- Bring forward any repairs, consumables, trade gifts or donations.
- Self-employed Super Contributions: Make a contribution before 26 June 2020.
- Employee Super Contributions. Pay your employee super contribution for June quarter before 26 June 2020.
- Capital Gains/Losses: Realise any capital losses and reduce any gains.
- Stocktake: Businesses that deal in stock will most likely need to do a stocktake at the end of the financial year.
Supporting Your Business post COVID-19
We know that for many of our clients, current thinking is about getting back on track. As restrictions slowly ease, it is a time of reflection, to consider what plans and opportunities are available to help our employees and business.
- Safety: Everyone’s priority needs to be the health and safety of their workplace. Implement diligent policies and protocols for your staff and anyone who enters your workspace to uphold.
- Mental Health: be mindful of your mental health. Create an environment which promotes and supports your and your colleagues’ mental wellbeing.
- Get the Word Out: Get in touch with your business contacts and let them know you’re in operation again. Making personalised calls to your network is the best approach.
- Innovate Your Technologies: Now is a great time to pivot technologies as we pick up from where we left off. Consider the adoption of new or unexploited options to enhance productivity.
We are always eager to continue our work with you and provide you with important financial and tax advice. As we reach the end of the financial year, the timing couldn’t be better. If you have any questions about any of the above matters, please reach out to the team at Lockwood Partners and Provide Group.