End of Financial Year matters

END OF FINANCIAL YEAR MATTERS AND TIMELINE FOR LODGEMENTS

Instant Asset Write Off Extended to 31 December 2020

Australian businesses with annual turnover of less than $500 million will be able to take advantage of this extended timeframe to invest in assets to support their business as the economy reopens and Coronavirus health restrictions continue to be eased.

If you are to claim the instant asset write off in your 2019-2020 tax return, the asset in question must be purchased from 12 March and ready for use by 30 June 2020. This has further been extended to 31st December 2020 in recent notification from the ATO.

Further, any small business with assets pool balance of less than $150,000 will be able to write this off fully @ the end of this financial year. This is up from $30,000 limit.

Source: Australian Taxation Office – Media Release

https://www.ato.gov.au/Business/Business-bulletins-newsroom/General/Instant-asset-write-off-and-the-car-limit/

Home Office Expense

Due to COVID-19 your working arrangements may have changed. If you have been working from home, you may have expenses you can claim a deduction for at tax time.

Tracking these expenses can be challenging, so from 1 March to 30 June 2020, ATO has introduced a temporary shortcut method. You can claim a deduction of 80 cents for each hour you work from home from 1 March to 30 June 2020 as long as you:

• are working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
• have incurred additional running expenses as a result of working from home.

ATO may extend this period, depending on when work patterns return to normal.

In most cases, if you are working from home as an employee, there will be no capital gains tax (CGT) implications for your home.

Source: Australian Taxation Office – Media Release

https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/

Due Date for SBSCH payments

If your business is using Small Business Superannuation Clearing House (SBSCH), super payments need to be accepted by the SBSCH by 23 June 2020 to allow time for the employees' super funds to receive the payments by 30 June. It is important to meet this timeframe as the timing of the payments may impact the individual tax position of employees.

For the purpose of claiming a tax deduction, superannuation payments are only considered to be paid once they have been processed and received by the employees' super funds, not the date the SBSCH accepts the payments.

Source: Australian Taxation Office – Media Release

https://www.ato.gov.au/Tax-professionals/Newsroom/Superannuation/Due-date-for-SBSCH-payments/

Superannuation Contribution Limits and Spouse Super Contribution Offset

Time to review your superannuation contributions including salary sacrifice and personal concessional contributions. The limit is $25,000 for 2019/20 financial year. However, effective 01st July 2018, if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap of $25,000 and make additional concessional contributions for any unused amounts.

The first year you will be entitled to carry forward unused amounts is the 2019–20 financial year. Unused amounts are available for a maximum of five years, and after this period will expire.

The contribution needs to reach your super fund bank account by 30 June 2020, so please review and act as soon as possible.

For personal contributions beyond employer contributions, you will generally need to lodge a notice of Intent to Claim. So, please review this immediately.

Spouse: You can make post tax contribution for your spouse to their superannuation account and claim a tax offset of up to $540 for a contribution of $3,000. This may be beneficial of your spouse earning less than $37,000 and caps off to $40,000 income. There are further factors to be considered so please review these.

Super Co-Contributions from Government: If your taxable income is less than #38,564 and receive at least 10% of your income from employment, you may be eligible for maximum of super co-contribution from the government of $500 for a post-tax contribution of $1,000 into your superannuation fund before 30th June 2020. This phases out when your income is $53,564 or more.

JobKeeper Ongoing Reporting

Business currently receiving job keeper payments must make a businessmonthly declaration each month to claim previous month JobKeeper payments.

In each monthly reporting, you are required to reconfirm business participant details and eligible employees and notify ATO of any change. You need to provide GST turnover for the reported month and projected GST turnover for the following month.

The ongoing monthly report obligation will continue till the end of the scheme at the end of September 2020. The month of September 2020 reporting is to be submitted in October 2020.

Single Touch Payroll Finalisation

Businesses employing staff of more than 20 employees and reporting through STP needs to submit EOFY finalisation declaration by 14 July 2020.

If you started reporting through STP in the 2019–20 financial year and have 19 or fewer employees, you have until 31 July 2020 to make the finalisation declaration.