EOFY is coming – are you up to speed?
It’s not the most exciting of topics but we’re only a couple of months away from 1 July, so the question has to be asked – how are you going with preparing for EOFY? Did you know that this time around it’s one of the most compliance-heavy years we’ve seen in some time. Daunting, huh?
MYOB has almost finished creating a carbon tax toolkit for SMEs (a downloadable booklet– will advise details soon) and in the process of writing it we realised how few people understood exactly what’s coming up in terms of payroll and other tax changes.
So, as much as it’s an unappealing proposition, get informed. If you don’t do your research – and you don’t have updated accounting software that does it for you – you could end up making mistakes from a simple lack of knowledge and then bear the brunt of the ATO. Let’s keep the tax man at bay…
Key compliance changes from 1 July 2012 include (at time of writing):
- The flood levy is due to be removed for those individuals who were impacted during the 2011/12 financial year.
- The carbon tax compensation measures for consumers will mean a payroll change for every employee, to take into account the new tax thresholds.
- The tax-free threshold for individuals will increase significantly to $18,200 per year and will mean a payroll change for every employee. From 2015/1016 this will rise to $19,400.
- The low income tax offset will be reduced from $1,500 to $445 in 2012-13 and to $300 in 2015-16.
- The superannuation changes passed as part of the Minerals Resources Rent Tax legislation could apply to some of your staff. Refer to www.ato.gov.au for updates.
- If you’re in the building and construction industry, annual reporting of contractor payments to the ATO will be required from 1 July 2013, so you will need to ensure your business systems are capturing the required information. Click here for more details.
Pending legislation includes (at time of writing):
- The small business* instant asset write-off will increase from $1,000 currently to $6,500 (GST exclusive), assisting investment in new equipment for business growth and improvement in cashflow.
- Such businesses will also obtain an instant write-off for the first $5,000 (GST exclusive) cost of any motor vehicle purchase. The balance of the purchase price will be allocated to the small business general pool and depreciated at the rate of 15 percent in the first year and 30 percent p.a. thereafter.
- A reduction in the company tax rate from 30 percent to 29 percent, for 2012/2013 onwards for SMEs and from 2013/2014 for larger businesses.
- Payroll tax changes may also be introduced, depending on each state government.
* The ATO defines a small business for tax purposes as one that has a turnover of less than $2 million (GST exclusive).
As a former work colleague used to sign off his newsletter (he loved his Dad jokes) – Happy Complying!