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What you need to know this EOFY

Budgets, elections and a back-and-forth exchange on the Senate floor have made for a vibrant year.  But it is the tweaks and new additions to the tax landscape that are troubling small business owners, making this EOFY more delicate than the last.

The ato, tax
changes and
you.everything
you need to know this eofy

A joint Accountants Daily and
My Business Webcast parntered
by Intuit Quickbooks

thursday,20 june
11am aest
duration:60 minutes

A panel of industry experts will reveal in a free, live webcast up-to-date strategy and quick tricks that are helpful and necessary to tackle what is the biggest deadline of the year.

We will also bring you exclusive insights to:

  • Key changes this financial year
  • Expert strategies for managing EOFY
  • Dos and don’ts: avoid common mistakes in the lead up to June 30

And much, much more!

DID YOU MISS IT?

register free here

What you need to know this EOFY

by QuickBooks Australia

Budgets, elections and a back-and-forth exchange on the Senate floor have made for a vibrant year.  But it is the tweaks and new additions to the tax landscape that are troubling small business owners, making this EOFY more delicate than the last.

Intuit QuickBooks partnered with Accountants Daily and MyBusiness to produce a webcast on the key changes ahead of the biggest deadline of the year, 30 June.

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Our panellists George Morice, director of Prime Partners; Peter Bembrick, tax partner at HLB Mann Judd; and Grant Quick, senior solutions engineer at Intuit QuickBooks, bring you exclusive insights into everything you need to know ahead of EOFY.

Here are the main takeouts:

  1. ATO’s red flag

This year, the ATO will specifically be targeting false clothing and laundry work-related expense claims.

While some Australians are required to wear uniforms, protective wear or occupation-specific clothing, last year around 6 million people claimed work-related clothing expenses, a figure the ATO finds very unlikely.

Mr Bembrick warns that the definition of work-related trips is another crease small business owners must iron out ahead of 30 June.

“If you run a business and you have family members going on work-related trips and you’re claiming them, you’re doing the wrong thing,” he explains.

The ATO’s rule book says that you must be able to substantiate your claims for deductions with written evidence if the total amount of deductions you are claiming is greater than $300.

But Mr Bembrick warns that just because you are taking advantage of this levy, doesn’t mean you are excused from showing how you worked out your claims.

“The data is there and the ATO is targeting that,” he cautions.

  1. Think twice about end-of-year buys

EOFY is a time of sales. But small businesses are advised to think twice before making a purchase under the guise ‘I’m making money by buying it’.

Ask yourself: ‘do I need this asset and am I really getting a good price?’

June and July are a great time to progress your business, says Mr Morice. He advises business owners to turn away from shopfronts and think about refining their practices to ensure a smooth EOFY next year.  

“Let’s talk about things that will make your business better, and save us tax problems next year. In terms of spending, if it’s going to benefit the business go ahead and do it, if not then let’s use that money some other way and generate some actually positive returns,” Mr Morice advises.

Mr Quick agrees. He says the current sales can be the key pitfall for a majority of small businesses.

“Many people think they can use the purchase as a tax deduction, but that is not always the case. A lot of things people buy cannot be used as tax deductions. So, buy and beware at this time of the year,” Mr Quick explains.

  1. Be wary of the traps

The ATO is becoming more and more sophisticated with data analysis and information sharing possibilities. Using the latest tech, the Tax Office is able to isolate data and target people more accurately.

“Your business should be within a bell curve of a normal revenue expenditure pattern,” says Mr Morice.

“The ATO is becoming very sophisticated and the software they now use is giving them a lot of opportunities to pick out those little things.”

Things you can’t claim include:

  • Getting yourself to work and back
  • Meals eaten during work time
  • Extended travel on work trips
  • Your suit, white shirt or black work pants
  • Your internet and mobile phone use
  • Overseas holidays
  • Self-education
  • Pet dogs
  1. What can I claim?

While the list of non-claimable items may seem worryingly long, there are plenty of ATO endorsed ways to make some money come tax time.

Things you can claim include:

  • Work-related car expenses
  • Internet and mobile phone expenses if you’re working from home
  • Home office expenses
  • Your personal laptop if it’s used for business
  • Cost of managing tax affairs
  1. Technology to the rescue

All of the above tasks can be streamlined with the use of technology.

Solutions such as QuickBooks Online allow taxpayers to throw away those shoe boxes, photograph their receipts and store them in the cloud.

Keeping travel logs has also been digitised. Simple apps, available online, can track your mileage automatically and maximise your deductions. 

“There is a lot of technology available. People can track their expenses, there is also an app called QuickBooks Self Employed that will track the mileage, it uses GPS and makes it very easy,” says Mr Quick.

And a little warning for accountants: Mr Morice explains that a lot of people differentiate between accountants based on the level of technology they use.

“If you want to run a business that gets improved by technology, look at the way the accountant runs their business,” he advises.

“Are they progressive and are they running a successful business themselves.”

Conclusion

With just a few days to go, make sure you have finalised matters early. And remember, 30 June falls on a Sunday this year, so have all your affairs completed by Friday.

Come Monday, 1 July, a number of important changes are also taking effect. The biggest one to impact small business is the the extension of the Single Touch Payroll (STP) to employers with 19 or less employees.

 

 

What you need to know this EOFY
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FROM THE WEB

The ato, tax
changes and
you.everything
you need to know this eofy

A joint Accountants Daily and
My Business Webcast parntered
by Intuit Quickbooks

thursday,20 june
11am aest
duration:60 minutes

A panel of industry experts will reveal in a free, live webcast up-to-date strategy and quick tricks that are helpful and necessary to tackle what is the biggest deadline of the year.

We will also bring you exclusive insights to:

And much, much more!

register free here