Here are the three things for business owners and their advisors to keep an eye on in the lead up to tax time.
The much-discussed federal budget and budget reply were delivered at the end of March, with the Government proposing a wide range of measures, each likely holding relevance for individuals, small businesses as well as enterprise-level operations.
What has been less than clear are the specific initiatives available for businesses now, and the conversations they should be having with their advisors about them ahead of the end of financial year.
This update will cover three key areas of business to keep a closer eye on, and how they might influence your plans as we head into the busy end of financial year period.
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Assets, write offs and expenses
No doubt many advisors will be watching closely to see if the 120 percent digital tax incentive will appear in legislation before 30 June, but until then the focus of this particular conversation is making the most of asset write-off incentives.
For those who have the available resources, acquiring new business assets has been made easier by through the following three incentives announced and adapted over successive Federal Budgets:
- Temporary full expensing
- Increased instant asset write-off
- Backing business investments
Where significant resources aren’t available to plot a course to growth through asset acquisition, good cashflow management remains the best way forward.
With the price of goods having risen alongside the cost of fuel, expenses may be starting to eat into profit margins, and that’s when cashflow rates start to wobble.
Super changes coming into effect
Inbound changes as part of the ‘your future your super’ reform package announced in the 2020-21 Budget are coming into effect from 1 July this year.
Chiefly, the removal of the $450 monthly income threshold means employers will need to begin collecting super details from any existing workers that weren’t previously eligible for super payments
This could represent additional administrative costs for employers that need to go on a fact-finding mission, but it also could pre-empt any necessary conversations around employee onboarding that need to be had, which may also include other compliance topics like single touch payroll.
With digital services allowing greater security and connectivity with the ATO, employers of all sizes will see benefit in switching to an online, well-integrated payroll or workforce management solution as an easy way to automate a large portion of their admin.
Contingencies, insurance and rates
While the RBA continues to hold off on increasing the cash rate, the interest rate for many other financial products is expected to climb throughout the year — to what degree is anyone’s guess.
When you take into account the business operators across the country who have been impacted by one disaster after another, it doesn’t take much to imagine how tough some are doing it.
Whatever the situation, common-sense financial thinking applies ahead of this tax time, and as you move into the new financial year: keeping your accounts up to date is the first step. Luckily, this can be achieved more easily than ever before.
Part of that may require you to review any existing loans or business insurance policies you have, which should also be undertaken with the help of an accredited financial advisor.
With the busiest time of the year for businesses fast approaching, now’s the moment to get good busy with MYOB. Learn about how we automate your admin, helping you save more time today. Visit MYOB.
This information is general only and not intended to be taken as financial advice. For guidance specific to your situation, MYOB recommends consulting with an accredited financial expert or tax practitioner.
MYOB is a leading business platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. At the heart of MYOB is a customer base of 1.2 million businesses and a network of more than 40,000 accountants, bookkeepers and consultants, for whom MYOB delivers end-to-end business and accounting solutions. MYOB operates across four key segments: Small and Medium Enterprises (SME), Enterprise, Financial Services and Practice.