Round Up of Other Year End Tax Issues

In addition to the tax planning opportunities, there are a number of obligations in relation to the end of the financial year which should be considered:

If you use a Motor Vehicle in producing your income you may need to:

  • Record Motor Vehicle Odometer readings at 30 June 2018
  • Prepare a log book for 12 continuous weeks if your existing one is more than 5 years old. Please note, if you commence the log book prior to the 30 June 2018, the usage determined will still be appropriate for the whole of 2017/18.  As such, it is not too late to start preparing one for the current financial year.

If you have started an account-based pension:

Ensure that you have withdrawn the annual minimum required.

If you are in business or earn your income through a Company or Trust:

  • Employer Compulsory Superannuation Obligations:

The deadline for employers to pay superannuation guarantee contributions for the 2017/18 financial year is the 28 July 2018.  However, if you want a tax deduction in the 2017/18 tax year the super fund (or Small Business Superannuation Clearing House) must receive the contributions by 30 June 2018. You should therefore avoid making contributions at the last minute because processing delays could deny you a tax deduction in this financial year.

  • For Private Company - Div 7A Loans  - Business owners who have borrowed funds from their company in prior years must ensure that the appropriate principal and interest loan repayments are made by 30 June 2018. Current year loans must be either paid back in full or have a loan agreement entered into before the due date of lodgement for the company return. Failure to comply risks having it counted as an unfranked dividend in the individual’s tax return

  • Trustee Resolutions - ensure that the Trustee Resolutions are prepared and signed before June 30, 2018 for all Discretionary (“Family”) Trusts. Please note we will be contacting you regarding your resolutions before the end of June 2018.

  • Preparation of Stock Count Working Papers.
  • Preparation and reconciliation of Employee PAYG Payment Summaries (Group Certificates).

From 1 July 2018:

The Compulsory Super Guarantee rate stays at 9.50% for the 2018/2019 year up to a new maximum superannuation contribution base of $54,030 per quarter.

Reduction In Company Tax Rates For Small Businesses

The company tax rate for businesses with less than $10 million turnover is now 27.5%.

If you use a Trust structure, one strategy is to allocate profits to a ‘Bucket Company’ and cap your tax at 27.5% for the 2018 year. Note that this company must have business operations to qualify for the reduced company tax rate.

Is Your Business A “Small Business” Entity?

Small businesses can access a range of tax concessions from the ATO. To qualify as a “Small Business Entity”, the business must have an aggregated turnover (your annual turnover plus the annual turnover of any business connected / affiliated with you) of less than $10 million and be operating a business for all or part of the 2018 year.

Other 2018 Year End Tax Planning Opportunities

Disclaimer: This newsletter contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.