The end of the financial year is fast approaching, and with it comes a number of important deadlines and changes business owners and tax payers need to be aware of. From deadlines for deductible contributions to adjustments in tax rates and super guarantee contributions. As tax and business advisers we want to ensure you have a smooth transition into the new financial year, stay on top of your financial obligations and take advantage of any available benefits.
Superannuation Contribution Payment Cut Off Dates
A reminder that the cutoff date for most Superannuation Funds to make FY2024 deductible super contributions, is Friday 21 June 2024. Please ensure if you are making any employer or personal contributions, the payments are made by this date to allow your Super Clearing House or Superannuation Fund to process the payment in time.
Tax Cuts from 1 July 2024
As it has been largely publicised, the individual tax cuts come into effect from 1 July 2024, which means that PAYGW rates will change and it is important that employers update their software accordingly. Most online software will run automatic updates, but it is important to check that this has been done correctly.
If possible, bring forward any expenses before 30 June 2024 and delay income until after 1 July 2024, when the individual tax rates will be lower.
Super Guarantee Changes from 1 July 2024
The super guarantee rate changes from 11% to 11.5% for wages paid after 1 July 2024. Ensure that any wages are processed before 30 June 2024 to take into account the 11% rate. A further increase to 12% will come into effect on 1 July 2025.
As with the payroll rate changes, all Employers should ensure their payroll software is updated to include the increase to 11.5% to avoid any errors.
Concessional Contribution Changes from 1 July 2024
The Concessional Contribution cap increased from $27,500 to $30,000 after 1 July 2024. Keep in mind that if you have a monthly direct debit in place, you can increase this if you wish to maximise your superannuation, and if you are eligible to do so, according to your age and work test status. Talk to us further to find out if you are eligible.
If your superannuation balance was less than $500,000 as at 30 June 2023, it may also be possible for you to contribute more super by taking advantage of the unused concessional cap carry forward rules. You have until 30 June 2024 to make contributions to catch-up on the 2019 carried forward concessional cap.
Minimum Pension Withdrawals before 30 June 2024
For those in pension phase, it is an important reminder to withdraw your minimum pensions before 30 June 2024. The COVID 50% reduction was lifted in FY24, therefore you will find that your pension withdrawal is significantly higher than previous years. Those with Self Managed Superannuation Funds should be mindful of the effect on cashflow.
Asset Wash Sales before 30 June 2024
Be careful of crystallising any capital losses before 30 June 2024 where you intend to buy back the investment soon after selling. This is considered a wash sale and tax avoidance that the ATO is focused on at tax time.
The ATO’s sophisticated data analytics can identify wash sales through access to data from share registries and crypto asset exchanges. When the ATO identifies this behaviour, the capital loss is rejected, resulting in an even bigger loss to the taxpayer.
Skills and Training Boost
The 2024 financial year is the last year to claim an additional 20% deduction on eligible expenditure relating to providing external training courses to employees by registered training providers. This boost is only available to businesses with annual turnover of less than $50 million.
Small Business Energy Incentive
As part of the 2023 Federal Budget, the Government announced a new incentive for businesses with annual turnover of less than $50 million. If legislated, it will allow small businesses to claim an additional 20% of expenditure incurred to support “electrification and more efficient use of energy”. However, electric vehicles, solar panels and fuel powered assets are all excluded. The incentive applies to eligible expenditure up to $100,000 incurred from 1 July 2023 to 30 June 2024.
Stocktake at 30 June 2024
A reminder for businesses that carry inventory to do an annual stocktake as at 30 June. It is important to plan and execute a stocktake that gives a reliable and accurate stock figure. As part of the stocktake, ensure you identify an old, obsolete, or damaged stock that can be written off.
Trust Distribution Resolutions
A reminder that Trusts are required to prepare and execute distribution resolutions prior to 30 June each financial year. Trust Distribution Resolutions determines how the income of the Trust is to be distributed and to which beneficiaries. Resolutions must be prepared in accordance with the Trust Deed and executed by 30 June 2024.
For More Information
For more information on how your business can benefit from Tax Planning advice, please contact your Archer Gowland Redshaw adviser on (07) 3002 2699 | info@agredshaw.com.au.
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