Year End Checklist for Businesses
We have put together the following Year End Checklist to assist you in gathering the information you need to prepare your 2010 accounts and tax returns. |
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1. Listing of Debtors at 30 June 2010:
Total debtors are the total of all your customer’s invoices raised before 30 June, but which remain unpaid as at 30 June. If you operate on the accruals system, the total of your debtors balance represents additional income, therefore increasing the profit of your business and taxes payable.
Bad Debts – can only be claimed as a tax deduction when:
· the debt has been previously recorded as income; and
· the bad debt has been taken out of your debtors’ system before the end of the year.
2 Creditors and Accruals at 30 June 2010:
These are all liabilities incurred but not yet paid by 30 June. Common examples are your ‘Pay As You Go Withholding’ payment for June as well as all other invoices from your suppliers dated prior to 30 June that remain unpaid at 30 June. The total of your creditor/accrual balance represents additional expenses, therefore decreasing your profit and reducing your business’ tax payable.
3. Stock on Hand:
Please ensure that, if applicable, you carry out a stocktake as close to 30 June as possible. The cost or value of stock on hand, at year end, is effectively added to your assessable income. Therefore, writing off any obsolete stock has a direct effect on the profit of your business and taxes payable.
4. Income in Advance:
Many businesses aren’t aware that if they operate on the accruals system, business income received in advance of it being earned (e.g. deposits from customers) does not need to be taxed until the next financial year. If you operate on the cash system it is income in the year received.
5. Computerised Accounting Packages:
6. Tax Deadlines:
The ATO has not yet released the 2010 year lodgement deadlines, however in most cases the dates should only vary slightly from your 2009 lodgement date. Most returns are due either at the end of March or mid-May. You can contact your advisor for an exact due date in early August. Please aim to have your work to us eight weeks prior to the due date. If we do not receive all the information necessary to prepare your returns eight weeks before the deadline, we cannot be responsible for late fees.
7. The Small Business Entity (SBE) Concessions:
You are eligible to use the SBE concessions in an income year if:
· you are carrying on a business; and
· your average annual turnover is less than $2 million.
The SBE concessions have the following three main elements:
· simpler rules regarding depreciation;
· options for cash based accounting for income and expenses; and
· simplified trading stock valuation rules.
We review the effect SBE concessions will have on our clients and will contact you if we believe you are eligible and better off using this system. Please contact us if you require further information.
8. Superannuation:
You are required to pay a superannuation contribution for employees equal to 9% for employees of their gross salary for the financial year ended 30 June 2010. This year it should have been paid on a quarterly basis. The June quarter amount is required to be paid into the relevant superannuation fund by 28 July 2010 to comply with Superannuation Guarantee legislation. The super a company can claim as a tax deduction in the 2009/10 financial year is the amount actually paid prior to 30 June 2010. There are limits to the amount of contributions that can be claimed as tax deductions, depending on the age of the employee. These are as follows:
Age at 30 June 2010 Max Tax Deduction
Under 50 $25,000
50+ $50,000
Self Managed Superannuation Funds
All superfund trustees should soon receive a record keeping binder with the year end information package.
9. Email:For those clients who have access to email and wish to receive our ‘email alerts’ and quarterly Business and Finance Updates (which include updates on current tax information), please click here to send us a quick email to advise us of your email address.
