Review and plan – helpful tips before June 30 arrives.

bemedia | April 11, 2017 |  News

Its second last BAS Lodgement time of the financial year.

Wow! The 31st March has ticked over and we can start to prepare our monthly and quarterly reports for our clients. March end of month is an important period end for us here at Carbon Bookkeeping Balcatta.

We are busy finalising all financial reports for the year to date (YTD) July 16 to 31 March 17.

This information is critical as it gives business owners an idea of how their business has gone for this Financial Year 2017. Year to date reports also let business owners project to the 30th June and start making some plans around end of year tax strategies with their accountant.

If you are a bookkeeping client of ours you will receive a bunch of management reports for YTD with your March BAS. We will also remind you to make an appointment with your accountant to discuss any changes to be executed before 30 June (gives about 2mths to act before 30 June). Please do make this appointment. Having this meeting BEFORE the financial year ends gives your accountant the best chance to make a difference in your business. Please try to keep him/her in the loop when you make changes during the year.

I personally don’t think it’s fair on your accountant to arrive on their door step six months after the financial year has ended and then get disappointed when your accountant can only save you minimal tax or hands you a tax bill. Accountants aren’t magicians and can’t change what has actually gone through your bank account, but if you see them before 30 June you have a chance to put some transactions through that will help with tax planning.

31 March also marks the end of the FBT (Fringe Benefits Tax) Period. As a general rule if you have a motor vehicle within the business then it’s a good idea to get the odometer reading from the dash as at 31  March (or go forth now for those that have forgotten…subtract a couple of weeks…)

If you are registered to lodge an FBT return then your accountant will send you a little questionnaire about your situation during the year. As this law is all about taxing the personal use portion of business property / expenses, you should always contact your accountant before you offer special deals regarding motor vehicles and other “fringe benefits” to your staff. These offers usually cost the business more than you think (when you include the FBT). Your bookkeeper or accountant should be able to give you an idea of the REAL cost, please just let them know what you are thinking before making these types of offers or incentives to staff.

FBT is like a dirty word in business as it is “yet another tax” for unsuspecting business owners (don’t get me started on payroll tax).  It’s a bit of a balancing act for all business as most have FBT type expenses (café meals, restaurants, travel) and they generally try to walk the type rope and not tip over into having to lodge and FBT return.

If you are registered to lodge an FBT return then your bookkeeper will most likely need to track all sorts of intricate things like how many clients and how many staff were at an event. Don’t worry, they aren’t upset that they weren’t invited, they are just trying to save time and accounting fees (chasing info) at the end of the year.

If you aren’t lodging an FBT return then generally your bookkeeper can NOT claim GST on these types of expenses. No, they aren’t being bossy or mean, they are just trying to save you a tax bill at the end of the year when your accountant writes all of the GST back and sends you a tax bill.

Now to finish on a lighter matter, I just thought I would give you some tips on bookkeeping and coding if you are in the hot seat as the business’s bookkeeper.

Theses are just some of the common errors we see happening all the time.

  • Insurances that have been financed – premium funding, you can claim all of the GST showing on the insurance tax invoices as of the date that you sign the finance / funding. Technically you have paid the insurances and are paying a bank like entity back over time. Same as any asset that you purchase and get finance for.
  • Licenses, rates and taxes generally have no GST. My tip to remembering this is that they are issued by government departments and why would those government departments want to be tax collectors if they don’t have to be.
  • International transactions – anything outside of Australian borders are not included on the BAS (N-T or Our of Scope). This means international stamps, imported goods (not the customs payment) and international travel as coded as BAS Excluded. Even national travel as part of an international leg of travel has no GST.  And NO you cannot claim VAT on your BAS.

I hope this information was helpful.

Have a great day and please don’t hesitate to let us know if you need any assistance with your accounts heading into the end of the financial year.

Until next month,

Cheryl