Another financial year is flying by and you've got tax to sort out. This is exactly the place to be with everything you need to know about EOFY and we’ve also put together a nice little checklist so you can tick off everything you need to do. Let’s get into it.
The official end date for financial year 2022-2023 is midnight on the 30th of June 2023. All transactions after that date will find their way into the 2023 financial year.
It is important to get your accounting and bookkeeping up to date as early as possible so that when calendar clocks over to the 1st of July 2023, you can close your books knowing all things are in order and you have ticked all your compliance boxes for the year.
Key Dates:
Official EOFY Date is 11:59pm, 30th June 2023
Tax Return Due Dates:
If you’re lodging your tax return yourself, you’ll need to lodge by the 31st October 2023, or if your tax return is being lodged by a Tax Agent/Accountant, you may be eligible for a later date. You will need to check with your accountant as this date can be different depending on your circumstances.
Payroll Finalisation (STP)
End-of-Year Finalisation Declaration: Due 14 July 2023
The EOFY finalisation declaration is due on the 14th of July and this can be done through Single Touch Payroll (STP).
Steps to finalise your end of year payroll:
1. Review the details
This is very important! Make sure all your employee details and your business details are correct.
These are the key things to check over:
Business Details:
- ABN
- Legal Trading Name
- Postal Address
Employee Personal Details:
- Name
- Date of Birth
- Post Code
These details are important to ensure there are no errors once they are sent to the ATO.
2. Reconcile your payroll transactions
This step can be done through your accounting software (if you are using software), such as Xero, Quickbooks or Myob.
To reconcile the payroll transactions, you need to review pay item totals and check that super and wages have all been paid correctly.
This can be done by running the Payroll Activity Summary and General Ledger Reports.
3. Finalise & Process STP, Payment Summaries & Super
Single Touch Payroll
For businesses with Single Touch Payroll (STP), this requires your Wages, PAYG and Superannuation contributions to be finalised. Again, your accounting software can handle all this. If you are unsure of what to do, we recommend contacting your tax agent.
Payment Summaries
If you don’t file your pay runs with STP, you will need to submit a Payment Summary Annual Report (PSAR) to the ATO and supply your employees with their Payment Summaries.
4. Superannuation
Super can be claimed in the current financial year if it is paid and received by the employees’ super fund by the 30th of June 2023. After this date, the tax deduction expense will roll over to the 2023-24 FY year.
Paying the super contributions as early as you can before the 30th of June will ensure it has cleared before cut off. It is also a good idea to check that your employees’ Super Funds are active.
it is imperative, that superannuation guarantee be reported, paid and received by the 28th day of the month following the end of the proceeding quarter (if not using the ATO clearing house). If using the the ATO clearing house, superannuation be reported and paid by the 28th day of the month following the end of the proceeding quarter. Please contact your tax agent, if this has not occurred.
ATO End of financial year Checklist
There’s a few things that the ATO requires for EOFY that will ensure you are meeting compliance.
1. Tax Returns
All businesses will need to lodge a tax return at the EOFY. Whether you do it yourself or through a tax agent can determine your dates for lodgement and payment.
Sole Trader:
If you are a sole trader, you must lodge your tax return, even if your income is below the tax-free threshold. You need to have an individual tax return including the supplementary section and the business and professional items schedule for individuals.
Due Dates
- Return yourself via MyTax: Must be lodged and paid by the 31st of October 2023.
- Lodge through a tax agent: Check with your tax agent for the due date
Partnerships & Partners
If you operate as a partnership, you may be required to lodge a tax return to report partnerships net income (income minus the expenses and deductions). Check with your tax agent before lodgement.
Individuals who are partners must report on their individual returns:
- Their share of any net income or loss in the partnership
- Any other assessable income such as a salary/wage, dividend or rental income.
Each partner pays tax on their share of the net partnership income received and the partnership doesn’t pay income tax on the income it earns.
Due Dates
- Return yourself via MyTax: Must be lodged and paid by the 31st of October 2023.
- Lodge through a tax agent: Check with your tax agent for the due date.
Companies
Businesses operating as a company have their own company tax return. The company reports its income, tax offsets and credits, PAYG instalments and the amount of tax it needs to pay on that income, or the amount that is refundable.
As the company operates as a separate entity, the company’s income is separate from your personal income and therefore all company directors will need to lodge a personal tax return as well.
Due Dates
- Return by paper: Must be lodged and paid by the 28th February 2024
- Lodge through a tax agent: Check with your tax agent for the due date.
Trusts and Beneficiaries
If you operate your business through a trust:
The trust itself and each individual beneficiary will lodge a tax return. For example, a company or individual tax return.
Beneficiaries of a trust report any income received from the trust including dividends, rental income and salary and wages.
Due Dates
- Return yourself via MyTax: Must be lodged and payed by the 31st of October 2023.
- Lodge through a tax agent: Check with your tax agent for the due date.
How and where to lodge tax returns
- By Paper: Find out how here
- Through a Tax Agent: Contact us, we are here to help!
- Using your Accounting Software: Find out how here
- Personal tax returns can be lodged yourself through MyTax via MyGov, find out how here
2. Record Keeping
Having all your records of expenses is really important to allow you to claim deductions and accurately record your income and losses. This can be kept digitally (in your software which makes it much easier!) or as paper records to be supplied to your accountant or used yourself to lodge your tax return.
Examples of records needed to be kept:
- Receipts or invoices for equipment or asset purchases and/or sales
- Receipts for expense claims and repairs
- Dividend Statements
3. Reports for the ATO & your Tax Agent
Here is a list of reports that need to be lodged and/or supplied to your tax agent or the ATO:
- A Profit and Loss Statement — summarising income and expenses
- For businesses with excess stock, a stocktake needs to be conducted
- Lodge a yearly report for Pay as you go (PAYG) withholding
- Lodge a yearly report for Fringe Benefits Tax (FBT)
- Lodge a yearly report for Goods and Services Tax (GST)
4. Claiming Deductions — the 3 Golden Rules from the ATO
There are 3 golden rules from the ATO for claiming deductions:
One: You can’t claim reimbursed money, you must have spent the money yourself.
Two: If you have an expense that is used both personally and for the business (eg. a phone) you can only claim the portion of the expense that reflects the business usage.
Three: You need a record to prove the expense (eg. an invoice or receipt)
5. Taxable Payments Annual Report (TPAR)
TPAR reports payments to subcontractors for certain industries. You are required to lodge this report by 28 August each year.
Industries that need to report include:
- Building and Construction
- Cleaning Services
- Road freight and Couriers
- Information Technology Services
- Security, Investigation or Surveillance Services
The report usually includes payments to subcontractors, but does not include payments such as payments made only for materials, unpaid invoices after 30 June each year, payments to workers engaged under labour-hire arrangements, payments to foreign residents for work performed in Australia. Check with your tax agent for more information.
Preparing for tax time: Tax Planning
Before the EOFY, Tax Planning is a key step to ensure you know how your finances are tracking and how much tax you could be expected to pay. For most businesses, employees are one of the largest business expenses so with a good tax plan, careful budgeting and a good accountant on your side you can work smarter with your tax strategies to help save you some cash.
Check out our blog: 6 Tax Planning Strategies to help minimise your tax
New Financial Year 2023/24 — Start off strong
Key Dates
We have a key accounting dates calendar for the New Financial Year covering all the important milestones to keep you on track. You can save and sync the calendar to your own calendar of choice (eg. google, outlook or icloud) so you’ll never miss a beat!
Check out our calendar of key accounting dates here: Accounting Calendar 2023/24
Upcoming dates:
Single Touch Payroll Finalisation Due 14th July 2023
This declaration allows your employees to go and submit their personal tax returns, so this is an important step to be sure to complete on time.
Q4 BAS Lodgement and Payment Due 28th July 2023
Final quarterly BAS lodgement and payment due
PAYG Annual Summary Report Due 14 August 2023
PAYG Withholding annual summary reports due for 22-23 financial Year
Changes from the Federal Budget Starting 1 July 2023
Small Business Instant asset right off changes
Temporary Full Expensing (TFE) ending from 1 July 2023 and will be replaced by a $20,000 instant asset write-off. Items over $20,000 will be depreciated by 15% the first year, and 30% the years after.
Improving Cashflow for Small Businesses
Government will set GDP uplift factor for GST and PAYG instalments at 6% for 2023-24 than the initial statutory rate of 12%. Will apply to small to medium size businesses.
Changes to Parental Leave
From the 1/7/2023 both parents can share parental leave entitlements. Along with that, there will be a boost in leave payments with an expansion to 26 weeks being phased in from July 2024.
Cheaper Child Care
Child care costs will be cut for around 1.2 million families from July 2023 making it easier for parents to get back to work.
For more from the budget, check out our blog: May 23-24 Budget Recap
