Checklists for a successful end of Financial Year – 2020

The usual things: 

  • Reconcile

Make sure you have reconciled all the bank accounts till 30 June 2020. Check if there is any balance in the clearing accounts and explain why it is not $0. Clear the suspense account, as necessary.

  • June quarter BAS

Due for lodgement by 25th August.

Checkout the ATO Cashflow Boost you are entitled to by clicking here.

  • Review payroll tax obligations (payable to state governments).

Have you considered payroll tax thresholds?

StateRateAnnual threshold
NSW5.45%850,000
ACT6.85%2,000,000
VIC4.85%650,000
QLD4.75%1,300,000
TAS6.10%1,250,000
SA2.50%1,500,000
WA5.50%850,000
NT5.50%1,500,000
  • Write-off bad debts

Review the income brought to account as assessable and write off bad debts after each client review.  You would need to determine if there have been any attempts to recover it and concluded that no amount can be recovered after multiple attempts.

What is new in 2020?

  • Superannuation Guarantee Amnesty

If you have unpaid super from 1 July 1992 to 31 March 2018, now is a great opportunity to get up to date and to take advantage of the tax benefits that would otherwise not be available. Businesses now have until 7 September 2020 to use this one-off opportunity to utilize any unpaid SG from the period without facing any administration charges or penalties. Most importantly, employers can also claim a deduction for amnesty payments made up to 7 September 2020.

  • Convid-19 support. make sure that you are familiar with the support being provided:
    • Instant writes off limit $150k: this has been extended to 31 December 2020. Where the asset is a luxury car then the deduction will be limited to the luxury car limit ($57,581 in 2019-20).
    • Applications for energy efficiency grants: make your business more energy efficient and reduce your power bills with the small business energy efficiency grants. These grants are available to small businesses with a turnover under $10 million a year. These grants will enable support equipment upgrades designed to reduce energy consumption, monitoring systems to better manage energy use, and energy audits to investigate other opportunities for energy efficient activities.
    • JobKeeper Extension– extended to March 2021 for eligible businesses. You will be required to reassess your eligibility in October 2020 and January 2021 with reference to the actual turnover in the June, September and December quarters 2020 respectively.
  • End of year STP finalization:

Previously payroll details were reported to the ATO once a year.  From 1 July 2019 you were obligated to send a report after each pay cycle throughout the financial year.

Payment summaries will no longer need to be provided to employees. Employees will be able to see the information that would normally be on their payment summary by logging on to MyGov.

Make sure your Single Touch Payroll (STP) information is correct and then make a finalisation declaration in your STP-enabled software. Make sure you reconcile the wages and PAYG Withholding accounts before lodging and reconcile any unpaid PAYG to Balance Sheet PAYGW Liability account.

Prepare STP Final Event, and lodge to ATO by 14th July if you have more than 20 employees or by 31st July.

  • Obligated to lodge a TPAR?

Payments made to contractors for providing services and you are in service providing:

  • Building and construction services
    • cleaning services for contractor payments
    • courier services for contractor payments
    • road freight services for contractor payments
    • information technology (IT) services
    • security, investigation or surveillance services
    • mixed services (a business that provides one or more of the services listed above)

You may need to lodge a Taxable payment annual report (TPAR) by 28 August. Review invoice provided to you as you would need their ABN, name and address, and gross amount you paid to them (including any GST). Create file for lodgment via SBR or ATO Online Services.

  • Workcover: keep informed of the legislative changes that affect your business from 1 July 2020

Reporting of injuries and payments even if a claim is not made.

You must also report any payments made by you or on behalf of your worker, for compensation or for treatment of their injury. These include payments:

  • In place of wages due to time off as a result of the injury
    • in connection with treatment by:
      • a medical or allied health provider,
      • an in-house provider, or
      • for those affected employers, funded through an early intervention program (EIP) or employer assisted program (EAP).

These programs provide the worker with access to treatment for a work-related injury while their claim is being decided by WorkCover, and can reduce the likelihood, severity and impact of the injury.

Unpaid interns are now covered under workers’ compensation

From 1 July 2020, unpaid interns are considered ‘workers’ under the Workers’ Compensation and Rehabilitation Act 2003 and are entitled to compensation for work-related injuries.

  • Update employees pay rates from 1 July 2020

Do not forget you need to ensure any employees on award wages have pay rates updated from the 1st pay run post 30 June. A 1.75% increase will apply to all awards, but the starting point for specific increases will be rolled out over three stages depending on the award applicable to your business.

Group 1 – from 1 July 2020

Frontline Heath Care & Social Assistance Workers

Teachers and Child Care

Other Essential Services

Group 2 – from 1 November 2020

Construction

Manufacturing

A range of other industries

Group 3 – from 1 February 2021

Accommodation and Food Services

Arts and Recreation Services

Aviation

Retail

Tourism