As the end of the financial year (EOFY) approaches, businesses across Australia begin preparing to wrap up their bookkeeping, file tax returns, and plan for the new financial year. Many small businesses dread this time of year, but with a little preparation, it is possible to take the stress out of EOFY. Now’s a good time to get your accounts in order, check what you can and can’t claim, meet your superannuation requirements, diarise your tax due dates, and be aware of potential tax scams.

1. Get your accounts in order

Organising your paperwork will help streamline the EOFY process, so check that you have records of all financial transactions, including documentation and details of your business income and the expenditure you’ve incurred throughout the year. The Australian Taxation Office has a set of requirements that every small to medium business has to meet at the end of every financial year. And remember, you must keep all records for 5 years from the date you lodge your tax return. 

2. Manage your deductions

Getting the right deductions for the business expenses you’ve made makes good financial sense, so it’s important you’re clear on what you can and can’t claim. As a business owner, you can claim for most business expenses, provided they directly relate to earning your income. That means you may be able to claim deductions for a business website, motor vehicle expenses, home office expenses, travel expenses, and tools, machinery or computers used in the business. Find out what you can and can’t claim here.

3. Meet your superannuation requirements

Businesses with superannuation guarantee (SG) obligations are required to pay employee contributions. The super guarantee (SG) is the minimum amount of super you must pay to your employees to avoid the super guarantee charge, and is currently 10.5% of your employee’s base earnings (ordinary time earnings). Meeting your superannuation obligations before 30 June may allow you to claim a tax deduction in this year’s tax return instead of having to wait until next year.

4. Take note of due dates

A little preparation and planning ahead not only saves you time, it could save you money too. Diarising the due dates in your calendar will help you remember when you need to take action and ensure you avoid ATO penalties. If you’re lodging your own tax return, you need to lodge it by 31 October each year. If that date falls on a weekend, the due date is the next business day after 31 October. 

If you choose to use the services of a registered tax agent, they can generally lodge returns for clients later than 31 October but you need to have engaged them before 31 October. Remember that some actions will need to be taken before 30 June, and if you're having difficulties meeting your tax obligations or are unable to lodge by 31 October, it’s important you contact ATO as soon as possible.

5. Be aware of tax scams

It’s not unusual at this time of year to see an increase in tax scams that target small businesses and sole traders. Being aware of the types of scams you may encounter, will help you avoid getting caught. Common tax scams include:

• Tax refund scams advising you’ve overpaid your taxes and are eligible for a refund, but must pay an admin fee to claim it.
• Tax owed scams advising you’ve underpaid your tax and must pay it immediately using a credit or debit card, or money transfer.

Be aware of these scams and ensure you don’t get tripped up and end up losing money. If you’re unsure about the authenticity of an email, take a cautious approach and contact ATO to confirm. 

Get help with your finances

The end of financial year is an important for time for businesses so it pays to prepare ahead. Get advice and assistance with your tax returns by referring to the ATO website here. For professional advice that will help you understand your current financial position and plan your next step, contact a Mortgage express broker today.

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

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