Several big changes are hitting small business at the end of this financial year, and Chartered Accountants are urging business owners to plan ahead, amidst concerns many may be unprepared.
Superannuation payment increases, single touch payroll phase 2 and new deductions for digitalisation and staff training are among the changes being navigated, Susan Franks, Senior Tax Advocate, Chartered Accountants Australia New Zealand, said.
“We know small business is doing it incredibly tough right now and the economy remains highly uncertain. Supply chains remain congested, operating costs are going through the roof and finding good people is as rare as hen’s teeth.
“That’s a lot on the plate of any small business owner at the moment, let alone trying to wrap your head around End of Financial Year,” Ms Franks said.
“Our members are telling us many businesses are unprepared at the moment – which means cashflows may take a hit in the new financial year or they miss out on some supportive government policies.
"That’s why we are urging small business owners to sit down with their Chartered Accountant well in advance of 30 June to make sure they are taking the right steps to insulate and prepare their business for the year and years ahead.”
Ms Franks said the superannuation guarantee increase to 10.5 per cent as well as removal of the $450 per month threshold for super payments, both come into effect from 1 July 2022.
“Fuel excise relief will also lift on 1 October – meaning the return of an additional 22.1 cents per litre excise back on every tank of fuel filled. It means the second half of this calendar year will see continued cost pressures.”
Ms Franks also sounded a warning that the second half of 2022 may well see some contraction in the small business sector, with growing costs making it tough for businesses to get on top of rental arrears incurred during the pandemic and the ATO also forecasting its plan to revisit its tax debt recovery efforts.
“However, there are some areas of relief available for businesses if they plan ahead.
"For example, it’s worth holding off on any major technology investments or training courses for staff until the new financial year where a 120 per cent deduction on this expenditure will be available.
“Elsewhere on the training front, there are also incentives available to hire apprentices and trainees including both wage subsidies and hiring incentives.
“Temporary full expensing and the instant asset write-off has also been extended to 30 June 2023, meaning businesses can still instantly write off the purchase of any new capital items.
“That could be a new truck or piece of second-hand equipment for your business.”
“If business owners are comfortable right now and want to insulate their business in the year ahead, they can also consider pre-paying eligible expenses in the financial year ahead to realise a further tax deduction.
“Your accountant can advise on all of these opportunities and how they might best meet your business’s needs,” Ms Franks said.