The end of the financial year and the start of the new one is an important and busy time for small business owners, completing bookkeeping, tax returns and starting to plan for the new financial year. Putting the hard work in each financial year can help you get your business organised and work smarter in the year ahead.
New ATO initiatives
From 1 July 2017, a simpler Business Activity Statement (BAS) will benefit small business time and cost of compliance by simplifying accounting setup, GST bookkeeping and BAS preparation. Businesses will be able to classify transactions and prepare and lodge their BAS more easily. Small businesses will only need to report GST on sales (1A), GST on purchases (1B) and total sales (G1) on their BAS.
*Single Touch Payroll
Single Touch Payroll (STP) is a government initiative to streamline business reporting obligations for employers with 20 or more employees. This means when an employer pays their employees, the payroll information will be sent to the ATO. Employers will report salary or wages, pay as you go (PAYG) withholding and super information to the ATO when they pay their employees. The two labels (W1 and W2) will be prefilled on their Business Activity Statement. A payment summary and payment summary annual report will not be required to be provided to their employees and the ATO at the end of financial year. Employers can begin to report through STP from 1 July this year.
Is your software compliant and ready for Simpler BAS and Single Touch Payroll? Your BAS agent can help you.
Other changes to be on top of
*Superannuation – a member whose total super contributions in a year exceed the contribution caps may be liable for additional tax on the excess super contributions.
There are new concessional and non-concessional caps that came into force on 1 July. The new before-tax (concessional) cap is $25,000 per year and after-tax (non-concessional) cap is $100,000 per year.
*GST – as part of its push to foster innovation and financial technology startup businesses, the 2017-18 budget will remove the double taxation on digital currencies. GST for purchases of digital currencies like bitcoin will be removed from 1 July 2017. GST still applies when exchanging those digital currencies for other goods and services that are themselves subject to GST.
From 1 July 2017, GST will be extended to two areas: imported low value goods valued at $1,000 or less and cross-border supplies of digital products and services. If your business is registered for GST and buys low value goods or digital products and services from overseas, you will need to supply your ABN at the time of purchase so you’re not charged GST. The change in digital products and services will relate to a broad range of products, including streaming or downloading of movies, music, apps, games and ebooks, as well as services such as architectural or legal services.
Remember, registered tax agents and BAS agents can help you with tax and super advice.
_____________________________________________________________________Eric Tong is a certified bookkeeping specialist from First Class Accounts in Epping