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8 Important Things You Need to Do Before the End of the Financial Year

To say that the end of the financial year (EOFY) is one of the busiest times of the year is an understatement. For businesses and self-employed individuals, this usually means a flurry of activity as they struggle to have everything ready for various deadlines.

Getting started early is key to making an otherwise trying time a breeze. Track what you need to accomplish prior to the end of the financial year by using the following checklist:

Review your financial records.

Keeping organised records of all financial transactions is imperative for any business. Your records will be needed in fulfilling business obligations and completing compliance requirements, most of which you’ll need to finish by the end of the financial year.

As you do so, take the time to sit down and assess your business’s health over the past year. See if you hit the targets or goals you set previously and determine your areas of improvement. This will be especially helpful when you start planning for the next financial year.

Determine what tax deductions you can claim.

Ensure that you claim all allowable deductions so that you can minimise your total tax by the end of the year. Your business may be able to claim tax deductions for the following expenses:

  • Tools, machinery and other equipment purchases
  • Home office costs
  • Motor vehicle and fuel expenses
  • Travel expenses

Just as important as knowing what tax deductions you can claim is knowing what you can’t. The ATO penalises incorrect claims in addition to charging you for the tax amount you would have avoided.

Update yourself on any new tax changes.

You will need to find out if there are any recent tax changes that might apply to you or your business. For example, new tax rates were applied to backpackers at the beginning of the 2017, which is essential information both for independent contractors and the businesses that engage these working holiday makers.

This is also a good time to make yourself aware of upcoming tax changes for the next financial year so you can be prepared correspondingly.

Hire a registered tax agent.

You can alleviate almost all of the stress of filing your income tax return and/or Business Activity Statement (BAS) by using a registered tax agent, such as CeTax. With their help you can also perform the previous steps in this list more easily and efficiently.

Of key importance here is the word ‘registered’. Make sure that your tax agent is registered with the Tax Practitioners Board (TPB) so you can verify their knowledge and expertise.

Beware of tax refund scams.

Tax time inevitably draws various fraudulent schemes out of the woodwork. Some of the more common tax scams include: those that claim you overpaid your taxes and can receive a refund by paying an administration or transfer fee; and those that claim you underpaid your taxes and need to immediately pay what you owe by providing credit card details.

Always be vigilant when receiving communications that pertain to your taxes and finances, especially from dubious email addresses and people you don’t know.

Update your business plan.

Make sure to include your business plan in the list of documents you review during this time, as it’s a great time to plan for the financial year ahead. As you do so, remember to:

  • Reacquaint yourself with your targets, goals and priorities.
  • Determine which strategy worked and which didn’t.
  • Note new and upcoming opportunities for growth and revenue.
  • Examine your spending and how best to maximise your allocated budget.

Review your business structure.

Sooner or later, growing businesses will need to consider whether the current business structure no longer provides the best fit for its needs. Note that different business structures need to follow different taxation and compliance regulations.

Your accountant’s advice will be invaluable in deciding whether a change in business structure would prove advantageous to the business.

Reassess your insurance coverage.

Changes in your business might require you to update your level of cover. Take the time to read your insurance policies’ Product Disclosure Statements (PDS) carefully to assess whether you still have the correct insurances in place. Assuming you’re covered for something you’re not might be devastating in the future.

Final reminders

The end of the financial year does not need to be as stressful as you dread it to be; a little diligence and preparation can go a long way to easing everything you need done by then.

Certica® prides itself in making EOFY reporting to the ATO easy for both independent contractors and the businesses that engage them. We ensure that taxes and other statutory obligations are met and properly documented in any contracting engagement. Moreover, we have partnered with CeTax to provide full, end-to-end service to make contractor administration easy and simple.

Feel free to contact us for more information on how we can help make tax time easy for you.

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