Last Minute 2016 EOY Tax Minimisation Tips


Another financial year is about to finish! As a business owner, there are many obligations that you need to consider and action just before and just after 30 June. Some of these will help to minimise your tax. We have outlined these action points below to assist you.

BEFORE 30 June 2016

  • Ensure your employee superannuation payments are received and allocated by your employees’ super fund prior to 30 June 2016 to ensure a tax deduction for this year. Any payments made between 1 July 2016 and 28 July 2016 will count towards your Superannuation Guarantee requirement but will not be tax deductible until the 2017 financial year.
  • If you operate through a trading company review shareholder loan accounts and make minimum loan repayments.
  • If you operate through a discretionary family trust ensure that a Trust Distribution Resolution for each Trust is signed by 30 June 2016.
  • Review 2016 LAST MINUTE strategies further below to reduce your tax prior to 30 June 2016.
  • Carry out a stocktake by 30 June 2016 (companies with turnover over $ 2million)
  • Review company shareholder loan accounts and make minimum loan repayments (may need to declare dividends)

1 July 2016

  • Superannuation guarantee rate is still 9.5%
  • 2% Temporary Budget Repair Levy continues.
  • 14 July 2016 or before
  • Provide 2016 PAYG Payment Summaries to all employees

28 July 2016

  • Quarterly Superannuation contributions due for employees (for the period 1 April 2016 to 30 June 2016).  THIS IS A KEY DEADLINE!
(Note: If you fail to meet your requirements by 28 July 2016, you must complete a Superannuation Guarantee Charge Statement and forward it to the ATO together with underpaid superannuation plus administration fees and interest by 14 August 2016. Superannuation Guarantee Charge payments are NOT tax deductible.)

14 August 2016 or before

  • Lodge your 2016 Annual PAYG Payment Summary Statement (for employees) with the ATO. Penalties apply for late lodgement.

28 August 2016

  • Taxable Payments Annual Report due for lodgement with the ATO (building and construction industry)

Key Changes from 1 July 2016

Businesses need to take note of a number of key tax changes that apply from 1 July 2016. These include:

  • Small Business Entity (SBE) threshold turnover increased to $10 million. This allows many more business to access tax concessions that improve cashflow, simplify reporting, and bring forward tax deductions.
  • SBE Company Tax Rate reduced to 27.5%.

SBE Company Tax Rate reduced to 27.5%

Effective 1 July 2016, the company tax rate for SBE (Small Business Entities) reduces by 1% from 28.5% to 27.5%.  To be considered an SBE, your group aggregated turnover must be less than $10 million.

$20,000 Immediate Deduction for SBE’s

From 7:30pm on 12 May 2015, small business entities (SBEs) were able to claim an immediate deduction for depreciating assets costing less than $20,000.

Depreciating assets costing $20,000 or more will be allocated to the SBE’s general small business pool and will depreciate at a rate of 15% in the income year in which the assets are first used or installed ready for use. The assets will then be depreciated as part of that pool at 30% in subsequent income years.

If the balance of the general small business pool is less than $20,000 at the end of the income year, this balance is also written off.

FBT Exemption increased

Fringe benefits tax has been abolished on all portable electronic devices used for work, such as mobile phones, laptops and tablets.  Currently the exemption applies only to devices that perform substantially different functions restricting employees to one device.  The change takes effect at the start of the 2017 FBT year, which commenced 1 April 2016.


Professional costs incurred in starting up a new business will now be immediately deductible.  Commencing 1 July 2015, previous restrictions meant these costs had to be apportioned over five year period.  For those who have started business as a sole trader and wish to change structure there are new capital gains tax exemptions.

Trust Distributions – Timing of Resolutions

Trustees (or directors of a trustee company) need to consider and decide on the distributions they plan to make by 30 June 2016 at the latest (the trust deed may actually require this to be done earlier).  Decisions made by the trustees should be documented in writing by 30 June 2016.

If valid resolutions are not in place by 30 June 2016, the risk is that the taxable income of the trust will be assessed in the hands of a default beneficiary (if the trust deed provides for this) or the trustee (in which case the highest marginal rate of tax would normally apply).

Action Step:  Please contact our office before 30 June 2016 so that we can properly prepare this document for you to sign.

You might not need to do a Stocktake

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 discuss how to use them properly.

Deadline for 2016 PAYG Payment Summaries

You need to provide 2016 PAYG Payment Summaries to your employees and other workers by 14 July 2016.  These must then be submitted to the ATO by 14 August 2016 or penalties will apply.

Action Step: If you have any doubt about how to correctly complete your 2016 PAYG Payment Summaries, please contact us for assistance BEFORE you prepare them.

Building and Construction Industry Reporting

From 1 July 2012, new tax reporting rules apply for businesses in the building and construction industry. Businesses will have to lodge an annual report with the ATO setting out details of payments made to contractors. This will assist the ATO to reduce the “cash economy” by ensuring tax is paid on all income including “cash” payments.

You will need to record the following details of all payments made to contractors for building and construction services:

  • The ABN of the contractor
  • The name and address of the contractor
  • The gross amount paid for the financial year, including GST
  • The total GST included in the gross amount paid

If you use computerised accounting software, your system should be able to track this information for you and prepare the required Taxable Payments Annual Report.

Action Step:  Ensure that you lodge your Taxable Payments Annual Report with the ATO no later than 28 August 2016.

Payroll Tax

Payroll tax applies to all entities that have an Australian payroll that exceeds state-based limits.

You should note that in addition to normal salaries and wages, the following items are generally also included in payroll expenses if payroll tax applies:

  • fringe benefits based on the grossed-up taxable value of fringe benefits;
  • all employer contributions to superannuation on behalf of employees; and
  • some contractor or sub-contractor fees.

For more detailed information about whether payroll tax applies to your business, please contact our office.

Action Step: The Annual Return/Reconciliation for payroll tax must be lodged by 21 July 2016 with your State Revenue Office.


Your WorkCover/WorkSafe insurer sends an annual reconciliation to all registered employers at the end of the financial year.

In completing your annual reconciliation, you will need to include the following items in addition to normal salaries and wages:

  • fringe benefits based on the taxable value of fringe benefits (do not gross-up);
  • all employer contributions to superannuation on behalf of employees; and
  • some contractor or sub-contractor fees.

For more detailed information about what items to include in the reconciliation statement, please contact our office.

Once the reconciliation is received and processed by your WorkCover/WorkSafe insurer, you will be issued with a final assessment or a refund depending on the instalments you have paid during the year.

Action Step: Complete and lodge the Annual Reconciliation with your WorkCover/WorkSafe insurer by the due date.

Goods and Services Tax (GST)

A reconciliation of GST should be performed as at 30 June 2016 to determine if there has been an under or over-payment of GST in the 2016 tax year. If a discrepancy has arisen, then it is possible to adjust a subsequent Business Activity Statement (BAS) to rectify the error, however there are limits imposed on adjustments that can be made in this way.

Income declared on your BAS should be reconciled to income declared on your income tax returns.

Also, please note that you are required by law to substantiate all Input Tax Credit claims with a complying Tax Invoice, and you need to retain these documents for a minimum of 5 years.

Action Step: Complete the annual GST reconciliations, and check that you have all required tax invoices and other supporting documents.

ATO Audit Activity

Please note that the ATO and State Revenue Office are constantly increasing their audit activities. In particular, there has been an increase in audit activity for PAYG Withholding, Payroll Tax, WorkCover, GST, Division 7A loan accounts from companies, and Trust distributions from Discretionary Trusts.

We are able to offer a review of your records and record-keeping procedures if you are concerned about your ability to satisfy an audit.

Action Step: Please contact our office if you would like to request this service.

Last Minute Tax Minimisation Tips

Here’s a few final reminders about ways to reduce your tax for 2016

  1. Write-off Bad Debts
  2. Write-off any trading stock that is damaged or obsolete
  3. Review your Asset Register and scrap any obsolete plant and equipment
  4. Pay for marketing materials, repairs, consumables, office stationery, and donations before 30 June 2016
  5. Ensure employee superannuation contributions are made (and received by your employees’ superannuation fund/s) by 30 June 2016 to allow a tax deduction this financial year
  6. Realise any capital losses you have before 30 June 2016 to offset against any capital gains you may have made

Want to talk? Feel free to call our office any time on 03 9744 7144 or visit our website

General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.]

ATO to Audit Businesses in selected Industries on Superannuation Payments



The Australian Taxation Office (ATO) is planning to do an audit on businesses starting July 2016 to ensure that they are properly complying with paying the right amount of superannuation for their employees.

In relation to this, the ATO has identified four industries that “often need more help to meet their tax and super obligations”; these industries include car retailing, computer system design, bakery, and supermarket.

An employee is eligible for a super fund if he or she meets all of the following requirements:

  • An employee must be 18 years old and above (employees under 18 must work at least 30 hours per week to become eligible);
  • The employee receives a salary of not less than $450 after taxes in a month;
  • The employee works full-time, or part-time/casual basis
  • Or if he/she is a contractor that is paid under a contract that is wholly or principally for the labour of the person.

Employers are also required to provide their eligible employees to choose which super fund they want their contributions to go to (through a Standard Choice form) within their first 28 days of working in the company. The employers would then have to make sure that super payments are settled at least every quarter on the due dates which are: 28 April, 28 July, 28 October, and 28 January.

Since 1 July 2014, the minimum super contributions for eligible employees is at 9.5% of their ordinary working hours. Payments made for super contributions could be generally claimed against taxes.

The ATO reminds that employers who do not make contributions on these deadlines will be subject to the Superannuation Guarantee Charge (SGC). The Tax Office, however, acknowledges the genuine efforts of employers to catch up with their late super payments and will unlikely take further action for delayed settlements. However, if the employer takes no action and is audited by the ATO or employees of the business will file a complaint about late super payments, the employer will have to be liable for SGC payments plus other penalties.

Along with auditing super payments, the ATO will also be focusing on pay as you go (PAYG) withholding as well as fringe benefits tax (FBT). Businesses are expected to have accurate records as the ATO begin their auditing in the coming weeks.

Not sure about your superannuation obligations? Contact our office on (03) 9744 7144 and talk to our professional team.

General advice disclaimer – General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.]

The business value myth debunked


It’s time to smash a myth about the value of your business.

All too often the comment is made “your business would fall over if you were hit by a bus, it has no value”. This seems like a sales pitch to create concern, right?  Well, let’s look at this from a different angle, rather than being negative to create alarm, let’s look at it from a positive angle with the business owner taking control of the issue.

“I add value to my business every time I take a step to improve the business, so, if I choose to move out of the business or take a step back, someone with an appropriate skill set and attitude can step into that space I created”.

Yes, it’s more words and doesn’t roll off the tongue or hit you in the face, but how much more powerful is this statement?

Does this make growing business value seem possible?  Does this make you feel in control of creating business value?

You do have the power to create business value.  It’s your choice – there’s no false promise here that you will create a business worth $10M tomorrow starting from scratch, but just take a moment to think about it.  How would your life be different if you took your business to a place where it had value?

People pay money to purchase a system that will generate income for themselves and their family.  The ultimate example often used is McDonalds – the most recognised systematic business in the world.  People pay $2M to earn an annual net profit of $300,000 for a McDonalds franchise because they are so confident that the system will provide this return on investment.

Let’s bring it all back to a less recognised example.  We know that people will pay money to buy a shop, let’s use a clothing shop situated within a shopping centre for example.  How do they determine value?   The purchaser makes an assessment of how much net profit they could generate annually using “the system” they will be purchasing.  They will then determine how many dollars they are willing to pay using that system to earn that annual income.  The system includes, location, point of sale equipment, brand recognition, relationship with suppliers, bookkeeping systems, marketing plans, team culture, etc.

The stronger the systems, the more the purchaser will be prepared to pay to earn that income as confidence and trust in the future earnings is higher – hence McDonalds being so valuable.

Look around at your business.  Where can you put in place a system that reduces the reliance on you?  Every time you do this you raise the value of your business and personal wealth.  Remember, this is not making you redundant in your business – just replaceable by a person with the right skill set and attitude when you make the choice to reduce your day to day involvement within the business.

If you would like more information on how you can systemise your business please contact the team at