Small Business

November Monthly Newsletter

Welcome to our November Monthly Newsletter! 

 

The due date for lodgement of an income tax return for the financial year ending 30 June 2019 was on the 31st of October. If you have returns that have not been lodged yet then do not stress – chances are you have quite awhile longer to lodge. If you are signed up as a client with a registered tax agent then you get to reap the benefits of the tax agent lodgement concession. This concession provides a later due date for lodgement and payment of your income tax return up until 15 May 2020.
We do however still encourage everyone to not hold off on lodgement as this can tie up other areas e.g. you may require your return to process Centrelink payments, to review or commence a loan or perhaps you would like to sell your business and a potential buyer would like to see some documents from your tax agent. So you can see there are benefits to lodging even before you are required to.

Monthly tax tip:

There is a lot of confusion surrounding food and drink for business purposes. Food and drink can sometimes be classified as entertainment which is generally not deductible but in certain situations it is a legitimate deduction. Food and drink which are purchased during travel (for business purposes of course) are tax deductible and the GST component can also be claimed. However, if you are purchasing food and drink at the work place then there is some criteria to be met. If you are purchasing general sustenance for your employees (e.g. tea and coffee, snacks) so that they can comfortably continue working then this type of food can be claimed. This may also include lunch purchased during a work day for staff, snacks for the conference room to be eaten by staff and clients and even dinner if your staff have been asked to work overtime.
If food has been purchased for simply entertainment purposes like food for a staff party then this cannot be claimed. Other non-deductible entertainment can also include a business meal with a client, after work drinks with staff, food and drink purchased at networking events. Categorizing food and drink can be a huge gray area when it comes to tax but when in doubt, please call your tax agent to confirm.

If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.

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Important Dates!

21 November:

  • Lodge and pay October 2019 monthly business/ installment activity statement

25 November:

  • Lodge and pay quarter ending 30 September 2019 activity statement if lodging electronically

28 November:

  • Lodge and pay quarter ending 30 September 2019 superannuation guarantee charge statement if contributions were not paid on time*

*Superannuation guarantee charge is not tax deductible

October Monthly Newsletter

Welcome to our October Monthly Newsletter! 

Single Touch Payroll registration became mandatory on 1 July 2019, however if you were considered a “small employer” which is defined as having less than 20 employees, you had a concession date of 30 September 2019 to start reporting. If you missed these deadlines then you can apply for a deferral with the ATO but must have good reason, e.g. transitioning to appropriate software, no access to internet, etc. From our experience, the STP process is super easy and takes only a matter of minutes to become connected (if you are already using appropriate software). Lodging STP pay events are also an extremely simple process so do not be alarmed if you haven’t jumped on the band wagon yet – it’s easier than you might think! If you are unsure where to even start with this process then we suggest contacting your software provider. If you are not using appropriate software or would prefer that we manage your payroll then please contact us to discuss your options.
Monthly tax tip:
Is your business registered for GST? It may not be required to just yet (you must register once you reach $75,000 in gross revenue) but registering for this can have some great benefits! GST is a consumer tax and shouldn’t actually be paid by business’ however you will be paying for it if you are not registered for GST. When you register, you can claim the GST that was paid on expenses relating to your business. Many business owners will actually avoid registering for GST because they are worried that they will have this new tax to pay – this is a common mistake. When you are registered, you actually collect GST from your customers so it is added to your sale price – not taken from it. For example, if you are going to invoice a customer for $100 you would then add the 10% of GST which is $10, making the total $110. You would then keep the $100 that you earned and pay the $10 to the ATO. So you don’t actually have to pay any new taxes and you are refunded directly for GST that you paid on business expenses! If you are interested in this and would like more information or assistance in registration then please contact us.If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.
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Important Dates!

21 October:

  • Lodge and pay September 2019 monthly business/instalment activity statement
  • Pay annual PAYG instalment notice. Lodge the notice only if you vary the instalment amount

28 October:

  • Make super guarantee contributions for quarter ending 30 September 2019 to funds by this date
  • Lodge and pay quarter ending 30 September 2019 activity statement if lodging by paper
  • Pay quarter ending 30 September 2019 instalment notice. Lodge the notice only if you vary the instalment amount
  • Lodge and pay annual activity statement for TFN withholding for closely held trusts

31 October:

  • Lodge and pay 2019 income tax return if not lodging through a tax agent
  • Lodge PAYG withholding annual report for no ABN withholding
  • Lodge TFN report for closely held trusts for quarter ending 30 September 2019

September Newsletter

Welcome to our September Monthly Newsletter! 

You should find yourself pretty well tax ready by now and ready to lodge your return, but before you do you might want to look out for theses common mistakes that taxpayers are making this tax season.
1.   Lodging before all your ATO data is available or failing to report all your income 
The ATO have sophisticated data-matching systems that can track your income and other relevant data, if you lodge your return before receiving all of your information then the ATO may just amend it and this could result in a tax bill.
2.   Claiming the wrong thing
Please do not listen to tax advice from friends and colleagues – you may be claiming something you are not allowed to. Remember that to claim a deduction you must have spent the money yourself (not being reimbursed), you must have a record to prove it and it must be directly related to earning taxable income.
3.   Forgetting to keep receipts
Deductions will be disallowed by the ATO if you do not have proof of purchase. An easy way to keep your records is by using the myDeductions ATO app which you can use to record expenses and take photos of receipts.
4.   Claiming for something you never paid for
Just because some deductions allow a claimable set rate without having receipts, doesn’t mean that you can automatically claim it. If you want to claim items like the laundry deduction, kilometres, meals and accommodation then you can’t just use the ATO’s set rates without proving that you actually spent the money.
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Monthly Tax Tip

Are you paying more than 27.5% tax on business income? It may be beneficial to switch your business to a company entity. A small business company only pays a flat rate of 27.5% tax on profits and this rate is slowly reducing to 25% by 2022. If you are currently trading your business as a sole trader, partnership or trust then your business profits will be taxed at marginalized rates and you could find yourself paying up to 45% tax! A company entity also provides some great legal benefits and asset protection. Need we say more….

If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.

Important Dates!

21 September:

Lodge and pay August 2019 monthly business/instalment activity statement

30 September:

Lodge Annual TFN withholding report if a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries

Click to email us about the above

August Monthly Newsletter

Welcome to our August Monthly Newsletter! 

The low and middle income tax offset has now become law and will be available until 2022. The maximum offset is $1,080 and is calculated on your income level. You will receive some of this offset if your taxable income is less than $126,000.

If your taxable income:

  • does not exceed $37,000, then you will be entitled to an offset amount of $255 on any tax payable
  • exceeds $37,000 but is not more than $48,000 then you will be entitled to an offset amount of $255, plus 7.5% of the excess above $37,000 to a maximum offset of $1,080 on any tax payable
  • exceeds $48,000 but is not more than $90,000, then you will be entitled to the maximum offset amount of $1,080 on any tax payable
  • exceeds $90,000 but is not more than $126,000, then you will be entitled to an offset amount $1,080 less 3% of your taxable income above $90,000

Monthly Tax Tip:

Do you claim a portion of your mobile phone costs as a business expense? If you claim more than $50 per year then you are required to keep a four-week diary to substantiate your claim.

You could calculate this as:

Dividing the number of business calls by the total calls (e.g. 100 business calls / 400 total calls = 25%)

Dividing the time spent on business calls by the total time spent on calls (e.g. 10 business hours / 40 total hours = 25%)

Once you have calculated the percentage of business use, you can then claim that percentage of each phone bill throughout the remainder of the financial year.

Important Dates!

14 August:

  • Lodge PAYG withholding payment summary annual report

21 August:

  • Lodge and pay July 2019 monthly business/instalment activity statement

25 August:

  • Lodge and pay quarter ending 30 June 2019 activity statement if lodging electronically

28 August:

  • Lodge and pay quarter ending 30 June 2019 superannuation guarantee charge statement if contributions were not paid on time
  • Lodge taxable payments annual report*
 *You are required to lodge a TPAR if you are in the following industries and have made payments to contractors for these services: building and construction, cleaning and courier industries.

July Monthly Newsletter

Welcome to our Monthly Newsletter! 

We, the team at Chesterton Accounting would like to wish you a Happy New Financial Year! Thank-you for supporting our business.

Monthly tax tip:
Did you know that you can claim home office expenses if used for your business? You can claim a percentage of each expense as per the business use.

However, a much easier calculation is claiming the hours spent in your home when working. The hours can be claimed at a set rate of 52 cents per hour as per the ATO ruling for 2019.

Important Dates!
1 July
  • Single Touch Payroll is mandatory for all employers
  • Wages that are covered by an award must be increased by 3% as per the new national minimum wage
14 July
  • Issue employees with PAYG payment summaries for the year ending 30 June 2019
21 July
  • Lodge and pay June 2019 monthly business/instalment activity statement
28 July
  • Lodge and pay quarter ending 30 June 2019 activity statement if lodging by paper
  • Pay quarter ending 30 June 2019 instalment notice. Lodge the notice only if you vary the instalment amount
  • Make super guarantee contributions for quarter ending 30 June 2019 to funds by this date
31 July 
  • Finalise EOFY employment figures if lodging through Single Touch Payroll

Claim Employee Super this Financial Year⏳

As an employer, you claim superannuation payments when they are paid – not when they are accrued, even if you report on an accrual basis for tax purposes.

However, if you wish to claim a deduction for this financial year for superannuation (quarter 4), it will need to be processed in your software by the 20th of June to allow time for the payment to be received.

If you choose to pay in July by the due date then the deduction will be claimed in the next financial year.

If you would like us to process this then please contact us as soon as possible so we can arrange a time to get this processed for you.

If you have any questions then please contact our office by phone or email. 😊

 

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