Ballarat AccountantsBallarat Bookkeepers

The end of financial year is just around the corner so preparations have to be made to make sure your trade business is sorted for the 2021 financial year.

It’s important to make sure your financial data is correctly recorded in your accounting software to save in fees and make sure data is accurate when management reports are run. Paid subcontractors must all be recorded correctly on the books. Check their name, address and ABN. Check their ABN through the ABR website to see if they’re registered for GST. Those who are not registered for GST won’t be able claim the GST component of the invoice and the bill needs to be recorded with a GST-free tax code.

Correctly recording subcontractors will help you complete a Taxable Payments Annual Report, which you need to lodge annually by 28 August. This summarises paid subcontractors and the GST amount paid to each of them. JobKeeper payments must also be recorded under Other Income. These are GST-free and assessable for tax purposes.

You also need to record cashflow boost payments separately under Other Income. These are non-assessable, non-reportable and GST-exclusive. Personal expenses are coded to Director’s Loan account as business accounts must contain business income and expenses only.

Pay runs must also be filed under Single Touch Payroll. Wages and superannuation data need to be finalised via STP reporting by 14th July 2021. You do not have to provide payment summaries to your employees for payments reported and finalised through STP.

Review your performance from 1 July 2020 to 30 June 2021. You may reduce tax payable if your profit and loss shows a large profit. Trade business with an aggregated turnover of $5 billion or less can deduct the business part of the cost of eligible new depreciating assets immediately. These should be first used, first held or installed ready for use for tax purposes from 6 October 2020 to 30 June 2022. Those with an aggregated turnover of $50 million or less can use temporary full expensing to the business part of eligible second-hand depreciating assets. Note that a car limit applies to the cost of passenger vehicles made to carry a load less than a tonne and fewer than nine passengers. This financial year, the car limit is $59,136 inclusive of GST.

Superannuation for June 2021 quarter is payable by 28 July 2021. If super is paid before 30 June, your trade business will receive a tax deduction for the 2021 FY not 2022 FY. For extra super contributions, the concessional contribution cap for 2021 FY is $25,000. These are employer contributions like salary sacrifice and super guarantee contributions. To get additional tax deduction, you can pay extra before 30 June 2021 up to the concessional cap. Get in touch with your accountant or financial adviser to know how much additional super contributions you can pay.

Your business structure is important in determining the amount of tax you pay. Sole trader is the cheapest and simplest business structure but individual tax rates apply to the business income and these increase as taxable income increases. Base rate companies pay 26% flat tax rate for 2021 FY on taxable income. It can be overwhelming to plan and prepare for tax and EOFY but your accountant can help you with your compliance needs.

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As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.

Sky Accountants Ballarat

Construction Accountants

Phone: 1300 328 855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 97444522

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437