Nine Important “last minute” answers for the End of Financial Year
After a difficult year we want to prepare you for when June 30 rolls around. So, here are some last minute answers to those tricky questions to get you EOFY ready for 2021.
Is it too late to make super contributions? Pension withdraw?
- Individuals - Pay personal super contributions well before 30 June 2021 (check your Superfund for cut-off dates).
- Companies - Pay Super Guarantee contributions before 30 June 2021 to get a tax deduction for 20/21. Practical Compliance Guideline (PCG 2020/6) provides relief to employers from checking whether employee super funds have received payment.
- SMSF - If you receive a pension from your SMSF - check with your financial advisor and/or accountant that you have withdrawn the minimum pension for 20/21.
How do I pay less tax?
- Ensure you have all the invoices from your suppliers for services and goods and orders that relate to 20/21. Ensure the supplier invoices are dated pre 30 June 2021. As long as the liability has been incurred before 30 June 2021, the expense will be deductible even if you haven’t paid the supplier yet.
- Spend money on “needed” assets /services that will support your business in June rather than July.
Help, I’m not sure if my business is set up properly?
- EOFY is a great opportunity to re-evaluate your business structure from a tax, team engagement and risk perspective. Have you prepared a budget for 2022 and found that business growth looks like it will outgrow your structure? Time to talk to your accountant.
How can I make my business more efficient in FY22?
- You have analysed 2021 and prepared a budget for 2022. Revenues are growing, but profits aren’t. Can you improve your processes with technology? EOFY is the perfect time to explore digital tools – discuss with your IT provider and your accountant. Is it time to transition to Xero or an inventory system, eCommerce or CRM system to help you operate more efficiently? Have you set yourself some goals for the new financial year? Talk to your accountant about how to measure progress towards these goals.
What do I do with my cash in the bank?
- Ask your accountant to prepare a cashflow forecast and perhaps there may be some cash to pay a dividend.
What are some key tax changes for my business for 2021/2022?
- Are you a Closely Held Employer (i.e., you pay yourself and your spouse only through the business)? Then, you will need to be registered with Single Touch Payroll from 1 July 2021.
Ensure you are ready to pay your employees a 10% super guarantee (up from 9.5%), and the $450 per month threshold has been removed (applicable to casual employees).
About WLM Financial
WLM Financial offers a single-team approach to help you across your entire financial life: business and personal, accounting and financial planning. Find out more about our range of Accounting Services and Financial Planning Services. Or book a meeting for a friendly follow-up to discuss your financial needs.