EOFY: Starting the 2022-2023 Financial Year Stronger
The 1st of July marks the beginning of the next twelve months of business and the end of the 2021-2022 financial year.
For many companies, this month will be used to take stock, create a plan, and implement new budgets. But, it is also an excellent opportunity to reflect, review, identify, and improve on what has worked and what hasn’t.
On the reconciliation side of things, it’s time to check in with the bookkeeper or accountant and not only balance the figures but maximise all available incentives and subsidies to obtain of a healthy return.
There are some obvious things that can help you get organised:
- Have an airtight process for tracking and managing expenses ALL year round.
Investing in quality and affordable software takes the headache out of day-to-day accounting and expenditure tracking.
- Create a home for receipts and other financial documentation to live.
Keeping everything together and in one place not only declutters the office but declutters the mind.
CPA Australia senior manager of tax policy, Elinor Kasapidis, suggests a few other things you should consider as you prepare to lodge your 2021-2022 return.
Tax Debt and Bad Debt
If you still owe money to the ATO it’s crucial that you include a strategy to continue consistent and regular payments or create a new repayment plan.
The construction industry leads the way with the unfortunate claim of being the biggest tax debtor, owing a whopping $7.2 billion in 2020 fiscal year.
Many construction companies have renegotiated loans and terms, raising tax issues and the need for other specific requirements. These need to be considered as part of the EOFY process.
Corporate Tax Rate
In the 2021-2022 financial year, this rate falls from 27.5% to 25%.
Essentially this means a little more money in the piggy bank. You may be eligible if:
- You have an aggregated turnover of less than $50M/year AND
- Not more than 20% of your income is derived from a passive source (eg. investments, rent and royalties)
Temporary Full Expensing
Temporary full expensing allows businesses with a turnover of less than $5 billion to purchase and write off their assets instantly with no asset value limit applied. The end date is currently June 2023.
Your accountant will be able to identify whether any Federal Government subsidies, eg. apprentice wage subsidy, are classed as assessable income and the reporting requirements involved.
Click here for more information and a list of taxable Government support.
Taxable Payments Annual Report (TPAR)
A separate report is required and needs to be submitted to the ATO by 28 August each year, for any payments to contractors for building or construction related services. E.g. brick and cable laying, demolition, and earthworks.
And then there’s the general sundry expenses, PPE, tools, and equipment repair and maintenance costs. It’s worth finding the receipts for the Covid-19 self test kits as well as these can also be claimed.
The Year Ahead…
For most businesses, there will be a bonus 20% that can be claimed for cost of expenses and depreciating assets up $100,000. This is for the expenditure period from 29 March 2022 – 30 June 2023.
Included in the recent 2022-23 budget, the Federal Government announced a further $17.9 billion to be invested in new infrastructure projects around the country.
This is great news for young or new people looking to get into construction as there will be plenty of work available. Eligible employers can benefit from a wage subsidy from the first year of taking on an apprentice and apprentices will also receive support payments and other allowances.
And finally, to manage the current housing boom support will continue for first home buyers, including family home and regional home guarantees.
All roads appear to lead to a bright and rosy year ahead for the construction industry, which leaves company managers and executives space to focus on getting the local culture right.
Creating an inviting workplace that promotes:
- high ethics
- embraces diversity and inclusion and
- encourages rewards and appreciation for ‘a job well done’
will act as a very enticing ‘carrot’ for skilled and hard workers. This further contributes to placing the business/company in a great position boasting a reputation for looking after staff – and being an excellent place to work.
Globe Group has been exceptionally busy over the last financial year now that we are over the COVID-19 delays (or on our way to being past them, at least).
Like everyone else we continue to navigate bouts of Covid and despite ongoing inconsistencies, obstacles, and delays in the industry, we are looking forward to another strong twelve months ahead.
Why not take the new financial year as an opportunity to focus on reinforcing a strong business foundation and developing an excellent and positive work culture?
Get in touch to find out more about how we can help you and how to partner with the us on your next project. Email the team or call us on (07) 3625 9999.
Our business is built on helping you succeed.