From the implementation of Single Touch Payroll (STP) in small business accounting systems to troubling revelations about the ATO’s conduct surfacing, 2018 saw a turbulent ride for the world of SME taxation.
2019 is looking to be as disruptive, if not more so, with a federal election coming up, a suite of tax policies from both parties, and even more STP compliance to come.
It may be shaping up to be one of the biggest years for tax in almost 20 years, especially for small business accounting.
With that in mind, here are a few things to examine before the end-of-financial-year madness comes in July.
Small business owners, especially micro-businesses, may need to worry about the extension of the STP system to employers with less than 20 workers.
An extension of STP just passed the Senate last December, which could mean it is just one step away from becoming law.
Therefore, all Australian businesses may be required to abide by STP reporting starting 1 July 2019, bringing over 700,000 companies into the regime should the law pass.
If you are a small business owner, consider trying out the numerous small business accounting software out there until you find one that’s perfect for your STP needs.
However, do note that the ATO has a tender out for a low-cost cloud accounting solution for STP compliance among micro business owners. So before making a final choice, it might be worth waiting for the result of that process.
- Your tax position for 2019
As we’re just a few weeks into the year, now is a great opportunity for small business owners to think about their tax position for 2019. Doing so will help you to make the necessary adjustments to avoid any hidden surprises in July.
You’ve still got six months to action everything so at the very least, get your 2018 taxes done and completed if you haven’t already.
- Instant asset write-off
The start of the year is an excellent opportunity to assess which asset investments may have good tax implications for the 2019 fiscal year.
Businesses have the ability to access the government’s instant asset write-off this 2019, which can provide some serious savings if undertaken correctly. Many small businesses don’t take full advantage of the $20,000 write-off or worse, don’t use it all together.
However, leaving it too late could lead to impulsive purchases that don’t have any good tax implications. Therefore, look at your numbers and start preparing so you can benefit from the instant asset write-off.
- Your employees
The Fair Work Ombudsman’s stand on underpayment states that a business owner needs to examine his business to ensure that they are paying their workers correctly.
Last year saw quite a number of businesses making costly mistakes because they ignored employment law.
In addition, many businesses get into financial problems because they do not properly plan out their staffing requirements which leads to bad hires that do more damage than good.
So if you’re going to have a huge month soon, start preparing for a staff increase if needed.
- Claiming expenses in 2019
With tax time getting closer, there are some crucial things to keep in mind today.
Declaring expenses will once again be on the ATO’s radar this year. The stakes are getting higher for businesses trying to get away with claiming dubious expenses.
The ATO’s data sharing capabilities have a bigger reach than it used to. Not only can it get information from a lot more locations today, but it is also much quicker and more accurate.
So if your business is not within the benchmark of your industry, you will have to be able to explain why not.
If you need assistance with business accounting, contact a Chan & Naylor accountant near you, and we’ll be more than happy to help.
Aside from business accounting, have a look at our other accounting and advisory services that we do to help you achieve greater success.
Chan & Naylor Group has nationwide offices in North Sydney, South West Sydney, Sydney, Pymble and Parramatta in New South Wales, Melbourne, Moonee Ponds and Hawthorn in Victoria, Brisbane and Capalaba in Queensland, and East Perth in Western Australia that can assist you with business accounting as well as any other tax inquiries that you may have. Contact us today.