ON January 1 many people make New Year’s resolutions for their personal lives, the Australian Tax Office (ATO) suggests small business owners use July 1 to make some financial resolutions for their businesses.
Deputy Commissioner Deborah Jenkins says that thousands of small businesses register every month and she has several tips to help them get a start the new financial year on the right foot.
A number of changes come into place in July 1, including the reduction of the $20,000 instant tax write-off to $1000.
Employers with 20 or more employees will be required to start reporting through Single Touch Payroll, unless they or their payroll software provider have been granted a deferral or they have been granted an exemption by the ATO.
Also, overseas businesses that meet the GST registration threshold of A$75,0000 will need to charge GST on low value goods.
There are exceptions, for example, if a small business is registered for GST and imports low value goods for business use in Australia, they may not need to pay GST.
The best way to keep up with the latest news for small business is to follow the Small Business Newsroom at ato.gov.au/sbnews.
Get on top of your records
Good record keeping is essential for anyone in business because it makes it easier to manage your cash flow, meet your tax obligations and understand how your business is doing.
If you keep your records in order throughout the year, when it is time to do your tax you will have all the information at hand and will not need to go rummaging through a shoebox of paper receipts.
Throughout the year you can use your records to compare yourself against the ATO’s small business benchmarks and check how your business is performing against similar businesses in the same industry.
For more information and advice on good record keeping practice, visit ato.gov.au/electronicrecordkeeping and to find out how competitive your business is, use the small business benchmarks, visit ato.gov.au/businessbenchmarks.
Find ways to make it easier
The ATO has a range of products and tools to make it easier for small businesses to stay on top of their tax and super obligations.
For example, you can do most of your business reporting and transactions with the ATO online, so it’s a good idea to familiarise yourself with the ATO website to see where you can save yourself time.
If you are sole trader, you can lodge your returns using a registered tax agent or myTax and you can also use the myDeductions tool in the ATO app to keep track of your business expenses.
From 1 July 2017, goods and services tax (GST) reporting on the business activity statement (BAS) was made easier with Simpler BAS.
Small businesses were required to report less GST information, reducing the complexity of bookkeeping and reporting, saving you time and money.
To find out more, visit ato.gov.au/simplerbas.
Look after your employees
If you have staff, it is important that you do the right thing by them by making sure you meet your deadlines for your employer obligations, including their payment summaries and superannuation guarantee payments.
You need to issue payment summaries to employees by 14 July and you need to lodge your PAYG withholding payment summary annual report to the ATO by 14 August.
You should also make sure you know if your workers are employees or contractors because this can affect your obligations.
There is a decision tool available online to help you get it right at ato.gov.au/ecinfo.
Know where to get help
Around 95 per cent of small businesses use a registered tax professional to lodge their returns, so it is likely that your agent will be your first point of call.
You can also call the ATO and speak with someone over the phone because we are here to help.
We have trained more than 4,000 staff to be able to assist small business owners who are dealing with difficult circumstances, including those who are managing mental health issues.
If you have a debt that you cannot pay on time, you might even be able to organise a payment plan online.
For more information, visit ato.gov.au/debt or to find out about how the ATO can help, visit ato.gov.au/sbsupport.