End Of Financial Year Obligations

Financial ‘house-keeping’ 

Software

Before rolling over your accounting software for the new financial year, make sure you:

• Prepare your financial year end accounts. This way, any problems can be rectified and you have a ‘clean slate’ for the 2012/2013 year. Once rolled over, the software cannot be amended.
• Do not perform a Payroll Year End function until you are sure that your payment summaries are correct and printed. Always perform a payroll back-up before you roll over the year.

PAYG payment summaries

You need to provide all of your staff with their PAYG Payment Summary on or before 14 July 2012. This includes any staff that left your employment during the 2011/2012 financial year.
If we prepare your Payment Summaries for you, please email us the data file from your accounting software.

The ATO imposes penalties for the late lodgement of their PAYG Payment Summary Statements with penalties of up to $2,750.

The annual PAYG Payment Summary Statement for the year ending 30 June 2012 needs to be lodged with the ATO on or before 14 August 2012. However, if we are preparing your Payment Summary for you and you only employ family members in your business (closely held employees) you may be eligible for an extension.

Reportable Fringe Benefits on PAYG Payment Summaries

Where you have provided fringe benefits to your employees in excess of $2,000 then you need to report the FBT grossed-up amount on their PAYG Payment Summary. This is referred to as a `Reportable Fringe Benefit’ (RFB) amount and you will notice that a label is included on the PAYG Payment Summary for this purpose.

Shareholder loan accounts

If your company has made payments on behalf of a shareholder/associate or has advanced them funds, then you need to be wary of debit loan accounts. There are special tax rules that can treat debit loan accounts as taxable dividends in the hands of the shareholder or associate. When a dividend is triggered under these rules, it needs to be declared as income on the shareholder’s personal tax return and will be taxed at their marginal tax rate.

The rules surrounding shareholder loan accounts are complex and it is important to talk to us as soon as possible if you think your company has made payments or advanced funds to shareholders or related parties. The rules can also apply if the company allows shareholders to use assets for less than market value.

If you have any shareholder loan accounts from prior years which were placed under complying loan agreements, the minimum loan repayments need to be made by 30 June 2012. It may be necessary for the company to declare dividends before 30 June 2012 to make these loan repayments.

You might not need to do a stocktake - using the simplified trading stock rules

Small Business Entities (operational businesses with an aggregated turnover below $2 million) have access to a range of tax concessions. One of these concessions is the simplified trading stock rules. Under these rules, you can choose not to conduct a stocktake for tax purposes if there is a difference of less than $5,000 between the opening value of your trading stock and a reasonable estimate of the closing value of trading stock at the end of the income year. You will need to record how you determined the value of trading stock on hand.

If you would like to take advantage of the simplified trading stock rules, call us today to make sure you are eligible to use the simplified rules and to talk through how to use them properly.