How is it already the last month of the Financial Year? Time flies when you’re reviewing royalty statements.
With only a few weeks before June 30, now is the time to review your business performance and take advantage of any ATO schemes to help minimise the amount of tax you pay.
Here’s a few points you may benefit from….
Company Tax Rate
The company tax rate for small companies operating a business (excludes passive income) with turnover less than $50 million has been reduced to 26% for the 2021 financial year.
The tax rate will continue to drop to 25% next year (and future years).
One for the little guys!
Superannuation guarantee will increase from 9.5% to 10% from July 1 2021.
It doesn’t stop there either, with the rise continuing all the way to 12% by 2025 – great for employees, but for all you business owners out there, make sure you factor this added cost to any future budgets/ forecasts.
Temporary Full Expensing of Depreciating Assets
If you’ve purchased an asset between 6 October 2020 and 30 June 2022, you may be eligible to fully expense the asset. That also applies to second-hand assets.
That amp you bought off Gumtree really coming through for you!
Employees Superannuation – June 2021 Quarter
To claim a deduction for employee (or contractor) superannuation in this financial year, you should start making the payments now! There have been delays with processing payments to clearing houses, with some taking up to two weeks. The employee’s super funds need to receive the payment before 30 June 2021 to be eligible for a deduction.
Any superannuation paid after 30 June must be received by the superfund by 28th July 2021.
Other Superannuation Contributions
If you plan on making any other superannuation contributions for directors or employees, they need to be paid as soon as possible. Before you make any additional payments, please contact us.
TOP TAX TIPS FOR BUSINESS
Do any of the below apply to your business? If so, contact to us to talk about utilising some potential deductions in this financial year.
- Do you have stock or merchandise on hand? If so, you will need to undertake a stocktake at 30 June 2021. Contact us for an explanation on how to do this.
- Do you have any bad debts that you don’t expect to recover? Now is the time to assess and potentially write off.
- Can you prepay any expenses such as rent or insurance?
- Looking for an excuse to buy that new guitar?
Any planned income that can be postponed to July 2021?
TOP TAX TIPS FOR SOLE TRADERS AND INDIVIDUALS
Working from home
A lot of us are still feeling the impact of last year so for the 2021 financial year, you can claim 80 cents for each hour worked. Remember to keep a record of the hours you have worked at home such as a diary or timesheet.
Use your car for work, but don’t keep a log book?
It is possible to claim up to 5,000 kms at a rate of 72 cents per km for the 2021 financial year.
Although we would recommend getting a 12 week logbook in place for us to assess! In either case, the kms will need to be justified with evidence.
Generally, you need to keep a travel diary if you travel away from home for six or more nights in a row to claim a deduction for your expenses. You are required to keep receipts for all work-related travel, except in some circumstances where you are employed and receive a travel allowance.
APRA AMCOS Royalties
Any APRA AMCOS Royalties need to be included in your individual tax return. Foreign withholding tax will need to be assessed on an individual basis to see if a tax offset is available.
If you’ve received a large chunk of cash this financial year (like a recording/publishing advance) and think it might be a while before you see further income, ask us how you can take advantage of Income Averaging. It could save you a heap of tax over the next few years!
Study Loan Repayment Threshold
If you have study and training loans (HELP, VSL, SFSS, SSL, ABSTUDY SSL and TSL), the 2019-2020 compulsory repayment threshold is $46,620.