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Another financial year has ticked over! Despite the busy lead up to the EOFY, as a business owner there are still many obligations that you need to consider and action after 30 June. Below is a number of key dates and reminders that may be applicable to your business.

Date Reminders
1 July 2017 Superannuation guarantee rate is still 9.5%.

2% Temporary Budget Repair Levy ceases.

14 July 2017 or before Provide 2017 PAYG Payment Summaries to all employees.
28 July 2017 Quarterly superannuation contributions due for employees (for the period 1 April 2017 to 30 June 2017). NOTE: Payment must be received by the super funds by this date. Check your clearing house for their cut off dates for payment.

(Note: If you fail to meet your requirements by 28 July 2017, you must complete a Superannuation Guarantee Charge Statement and forward it to the Australian Taxation Office (ATO) together with underpaid superannuation plus administration fees and interest by 14 August 2017. Superannuation Guarantee Charge payments are NOT tax deductible.)

14 August 2017 or before Lodge your 2017 Annual PAYG Payment Summary Statement (for employees) with the ATO. Penalties apply for late lodgement.
28 August 2017 Taxable Payments Annual Report due for lodgement with the ATO (building and construction industry).

Some key changes to note from 1 July 2017

  • The temporary budget repair levy for high income earners has been abolished. This reduces the highest marginal tax rate from 49% to 47%;
  • The maximum concessional contribution for superannuation has been reduced to $25,000, independent of your age at the start of the financial year;
  • The maximum non-concessional superannuation contribution has been reduced to $100,000;
  • The maximum amount of non-concessional superannuation contributions allowed under the bring forward provisions has reduced to $300,000; and
  • The 10% employment test has been removed for personal superannuation deductions, meaning that employees can now claim a deduction for personal superannuation contributions (check with your accountant as contribution limits apply).

Confirmation of changes from 1 July 2016

The following were expected to be implemented from 1 July 2016, and have since passed parliament and are now law:

SBE Company Tax Rate reduced to 27.5%

Effective 1 July 2016, the company tax rate for SBE (Small Business Entities) reduces by 1% from 28.5% to 27.5%.  To be considered an SBE, your group aggregated turnover must be less than $10 million.  This key concession for 2017 applies again in 2018.

$20,000 Immediate Deduction for SBE’s

Business groups with aggregated turnover of less than $10 million are now eligible to claim an immediate deduction for depreciating assets acquired before 30 June 2018 and costing less than $20,000.

Similarly, depreciating assets costing $20,000 or more will be allocated to the SBE’s general small business pool and will depreciate at a rate of 15% in the income year in which the assets are first used or installed ready for use. The assets will then be depreciated as part of that pool at 30% in subsequent income years.

If the balance of the general small business pool is less than $20,000 at the end of the income year, this balance is also written off.

EOFY Reminders and Action Items

Deadline for 2017 PAYG Payment Summaries

You need to provide 2017 PAYG Payment Summaries to your employees and other workers by 14 July 2017.  These must then be submitted to the ATO by 14 August 2017 or penalties will apply.

Building and Construction Industry Reporting

Tax reporting rules apply for businesses in the building and construction industry. Businesses need to provide details of payments made to contractors through their Taxable Payments Annual Report. This report must be lodged with the ATO no later than 28 August 2017.

When preparing your report, you will need to record the following details of all payments made to contractors for building and construction services:

  • The ABN of the contractor;
  • The name and address of the contractor;
  • The gross amount paid for the financial year, including GST; and
  • The total GST included in the gross amount paid.

Payroll Tax

Payroll tax applies to all entities that have an Australian payroll that exceeds state-based limits.

You should note that in addition to normal salaries and wages, the following items are generally also included in payroll expenses if payroll tax applies:

  • Fringe benefits based on the grossed-up taxable value of fringe benefits;
  • All employer contributions to superannuation on behalf of employees; and
  • Some contractor or sub-contractor fees.

The Annual Return/Reconciliation for payroll tax must be lodged by 21 July 2017 with your State Revenue Office.

WorkCover/WorkSafe

Your WorkCover/WorkSafe insurer sends an annual reconciliation to all registered employers at the end of the financial year.

In completing your annual reconciliation, you will need to include the following items in addition to normal salaries and wages:

  • Fringe benefits based on the taxable value of fringe benefits (do not gross-up);
  • All employer contributions to superannuation on behalf of employees; and
  • Some contractor or sub-contractor fees.

Once the reconciliation is received and processed by your WorkCover/WorkSafe insurer, you will be issued with a final assessment or a refund depending on the instalments you have paid during the year. Make sure that you complete and lodge the Annual Reconciliation with your WorkCover/WorkSafe insurer by the due date.

ATO Audit Activity

Please note that the ATO and State Revenue Office are constantly increasing their audit activities. There has been an increase in audit activity for PAYG Withholding, Payroll Tax, WorkCover, GST, Division 7A loan accounts from companies, and Trust distributions from Discretionary Trusts.

If you have any questions about your business obligations for the EOFY, please contact your accountant or advisor. For more information about our suite of business services, including taxation and accounting, audit and assurance, bookkeeping, business advisory and human resources, please contact us on 1300 363 866 or email mail@mcconachiestedman.com.au.

GENERAL ADVICE WARNING | The information provided in this article is for general information purposes only. It is not intended to be, nor should it be read as specific financial, business planning or risk advice. Before acting on any of the information contained in this article you should obtain advice from a specialist advisor, which is appropriate to your specific business risk needs, objectives and financial situation.