We’re supporting STP across our online and desktop range. The following products will be ATO compliant by 1 July 2018*:
Reckon One;
Accounts Hosted;
Reckon Accounts 2018 version onwards;
Payroll Premier 2018/19 version onwards.
We’ve developed a new application called GovConnect STP that will make meeting your STP requirements quick and easy. GovConnect STP acts a gateway to the ATO enabling you to view and lodge your STP reporting no matter what Reckon product you use.
✓ Lodge directly to the ATO ✓ Review before you submit ✓ No extra cost
✓ ATO status messages ✓ Review past submissions ✓ MFA secure
Single Touch Payroll Checklist
Reckon also have a created a checklist with some important questions to consider to help you get prepared for STP.Sign up to download.
You won’t need to do anything other than upgrade to the latest version of Reckon Accounts Hosted which will be released in June.
No, we are not using an intermediary to lodge.
There is no additional cost to lodge using SBR through Reckon Accounts Hosted.
Users cannot do testing. All data transmitted through the service will be seen as live data as the ATO does not have a mechanism to set a lodgement as test data (aside from their test service which is for development use only and uses specific data).
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6 MORE! Plus 4 individual tax tips – End of Financial Year tax tips 2018
BUSINESS
1. Get more from your director’s bonus
If you are expecting a pre-30 June bonus, you may be able to sacrifice your pre-tax salary or bonus into super rather than receive it as cash. As with the deductible contributions, this could reduce tax on your salary or bonus by up to 34%, and will allow you to take advantage of the contribution caps that apply in this financial year. Once your money is invested in super, the tax going in is only 15% and also, tax on earnings is capped at 15%, which may compare favourably to investments held in your own name.
2. Pay quarterly/monthly super
Super Guarantee contributions must be paid before 30 June to qualify for a tax deduction in the 2017/18 financial year. You might consider bringing forward the June quarter contribution payments. We recommend allowing plenty of time for it to reach the super funds (5-14 days some funds require).
3. Bad debt review
Review all your bad debtors. Write-off all those you think are unlikely to pay to enable a tax deduction this year. We recommend recording this in the minutes of the business after ensuring that all reasonable steps have been taken to recover the debt.
4. Prepay expenses
Prepaying certain expenses such as rent, repairs and office supplies before year end can reduce your current year tax liability. If payments are due early next financial year, a pre-payment may entitle you to the tax benefit much earlier. The rules differ depending on the type of entity so please call your tax agent, if you would like more clarification.
5. Stocktake
Trading stock should be reviewed before 30 June, either by a physical count or from a perpetual stock record system. Small Business Entities can be exempt from conducting a yearly stock take if the value of stock has moved by less than $5,000 during the year. Tax is paid on the value of stock at the end of the financial year so consider selling or disposing of slow moving stock so that it is not included in the count.
6. Franking credits
If you are planning on paying dividends out to shareholders before the end of the year, it is worth reviewing the company’s franking account to ensure that the company has paid sufficient tax to enable the dividends to be fully franked. This may mean paying ahead of scheduled payments in an arrangement with the ATO. For assistance with calculating your franking account balance, please talk to your tax agent.
INDIVIDUALS
A. Get a super top up from the Government
If you earn $35,454 – $51,021 pa, of which at least 10% is from employment or a business, and make a personal after-tax super contribution, you could qualify for a Government co-contribution of up to $500.
B. Boost your partner’s super and reduce your tax
If you have a spouse who earns less than $10,800 pa, consider making an after-tax super contribution on their behalf, and you could receive a tax offset of up to $540.
C. Use super to manage Capital Gains Tax
If you make a capital gain on the sale of an asset this financial year and earn less than 10% of your income from eligible employment, you may be able to claim a tax deduction for a contribution to superannuation, which could reduce or offset your capital gain. You will need to be eligible to contribute to superannuation (which means you are under the age of 65, or under 75 and meeting the work test), and be comfortable having your contribution preserved in super until you meet a condition of release (eg retirement).
D. Make tax deductible super contributions
If you earn less than 10% of your income from eligible employment (eg you are self-employed or not employed), you are generally able to claim a tax deduction for personal contributions to superannuation. As with super, you will need to be eligible to contribute to superannuation (which means you are under the age of 65, or under 75 and meeting the work test), and be comfortable having your contribution preserved in super until you meet a condition of release (eg retirement). If you claim a deduction for it, the contribution you make will be taxed at 15% in your super fund, so your tax saving will be the difference between your marginal rate and 15% – which could be up to 34%.
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How will Xero roll out STP to employers? We’ll roll out STP progressively from 1 July rather than switch everyone on at once. This will allow us to migrate the massive number of Xero Payroll users in the smoothest fashion possible. When it’s time for a payroll administrator to opt in to STP, a banner will appear on the pay-run screen, and you’ll be able to opt in with just a few clicks.
What about the ATO’s 1 July deadline to begin using STP? The ATO has granted Xero subscribers a deferral until as late as 31 December 2018. We expect to have all Xero users on STP well before that date. Until Xero prompts you to make the switch, you can continue processing payroll as normal and remain fully ATO compliant without any penalty. It’s that simple.
How can employers prove to the ATO that they received a deferral, if asked? Xero subscribers can use the ATO reference number 49410109.
When will I be prompted to make the switch? We’ll prioritise roll-out to large employers with more than 20 staff. We’ll let you know when it’s time to make the switch with a banner on the pay-run screen. At that point, you can start filing seamlessly with the ATO.
If I begin using STP after 1 July, do I have to play catch-up in reporting to the ATO? No. Each STP filing includes all year-to-date payroll information. This feature, along with the ATO deferral, will make for a smooth experience when you begin using STP.
Does STP cost extra in Xero? No. STP compliance is part of the Xero product offering.
Will STP change my current payroll workflow in Xero? The aim of our release is to ensure minimal disruption.
Xero will have a simple set-up process for Single Touch Payroll. During the STP setup, Xero will display your software service ID (SSID).You’ll need to provide it to the ATO in one of two ways. Either:
Once you’re setup, the option to report a payment to the ATO will be presented for each pay run and your payroll information will be filed with the tax office.
Also, due to the filing requirements for STP, you’ll only be able to revert the latest posted pay run for each pay calendar after you’ve opted in.
DOWNLOADa FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE
Need help? Not sure? Call for FREE30min advice / strategy session today!
MYOB – Single Touch Payroll (STP) reporting in MYOB
We wrote last week all about what Single Touch Payroll (STP) Reporting is about, and what the ATO tells us.
MYOB is one of the top selling accounting software for small business, and they are getting ready for STP –
Single Touch Payroll (STP) is an ATO initiative to streamline payroll reporting. You’ll be able to report payroll and super information directly to the ATO when you process a pay runin AccountRight (from either online or desktop company files).
As a result of this change, for the 2018-2019 tax year, you may no longer need to complete payment summaries at the end of the financial year as your employees’ payroll information will be available to them through the government’s online service, myGov. NOTE – All businesses still prepare the usual Payment Summaries for Year 2017-2018.
MYOB AccountRight 2018 has been updatedto help you get ready for STP reporting. We’re working closely with the ATO to ensure you’ll be able to report your payroll data to them from 1 July 2018. There are 2 main steps –
MYOB Essentialsis preparing to get ready also. Before reporting payroll and super information to the ATO, you need to:
Check that your company information and employee details meet ATO requirements. To do this, you can check your details in MYOB Essentials and view a list of errors that need fixing. Go Here for instructions;
The final step to set up Single Touch Payroll is to connect to the ATO. MYOB are working closely with the ATO to get this bit up and running as soon as we can. MYOB will be in touch when it’s ready.
Note: The following features aren’t available yet in the new AccountRight, so if you use any of these in AccountRight v19 you might not be able to upgrade just yet:
M-Powered Payments
Multi-currency
Negative inventory
Multi-location stock tracking
If you can’t upgrade, we’ve worked with the ATO and you have been granted a deferral from STP reporting until 31/5/2019. More details about this deferral will be provided soon.
DOWNLOADa Free “Bookkeeping Quarter Checklist” to get organised!CLICK HERE
STP – Single Touch Payroll – means the software sends the pay-run details as well as the super due, as an amount that is total (year-to-date) as at each pay-run, to the ATO. It means Payment Summaries will not be required at Year End – the ATO will have all they need already, by the last pay-run that is recorded in June!
Preparing–
Businesses with 20+ employees MUST be ready by 1 July 2018 – the software is due to be ready in June 2018
Businesses with 19 or LESS employees – must start next year 1 July 2019 – but you CAN opt-in to start 1 July 2018 if you choose!
Single Touch Payroll (STP) aligns your reporting obligations to your payroll processes.
You will report to us each time you pay your employees. Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.
The information you send us will include your employees’ salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and superannuation information.
2. Update to the latest version as it arrives – The software will notify us when the STP features are ready – I suspect we may just use the ABN to identify with the ATO – and/or an AUSKEY – they haven’t specified how yet
4. Consulting – Paul will be available for either – onsite – or remote login with Teamviewer in June, as the features are available, if you need help setting up.
5. Next weeks – STP and MYOB, Xero, Reckon – keep informed: subscribe to the right software
Need help? Not sure? Call for FREE30min advice / strategy session today!
Time to plan for a good finish for EOFY and here are 5 tips to get started and prepare for 30 June.
1. Consider the ideal timing for asset sales
If you are thinking of selling a profitable asset thisfinancial year, but are likely to earn a lower income in the next year, it may be worth postponingthe sale until after 30 June, as the sale is income, less the original cost. However, if you expect an income windfall from 1 July, it may be worth bringing the sale forward. As always, your decisions depend on your expectations for future asset prices, so don’t postpone a sale for tax purposes if you are expecting your investment to fall in value!
2. Pre-pay investment loan interest
If you have (or are considering establishing) a geared investment portfolio, you can pre-pay 12 months’ interest on your investment loan and claim the cost as a tax deduction in the current financial year. This can assist to manage cashflow more efficiently, and potentially reduce your income tax liability this financial year.
3. Pre-pay income protection premiums
If you are employed or self-employed, income protection insurance provides peace of mind about the security of your income in the event you are unable to work due to illness or injury. Premiums for this insurance are generally tax deductible; prepaying your annual premium prior to 30 June will allow you to claim a full year of cover in advance as a tax deduction.
4. Review your debtors and creditors
Review your accounts receivable / trade debtors – who is taking the longest to pay – is debt-collection failing – consider if it is simplest to write off (reverse) the sale and move on with more Profitable clients and prospects. Likewise – who do you owe? Can you pay them by end of year to tidy up your accounts – or if you are struggling – can you negotiate longer terms to keep things open with suppliers and keep the relationship going?
5. Offset capital gains with capital losses
Generally, if you have incurred capital losses on your investments, you are able to offset these capital losses against any capital gains you have made. You can also use losses you have carried forward from previous years. Remember, income losses can only be offset against income; capital losses can only be offset against capital gains.
DOWNLOADa FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE
Case Study – Let down by accountant and then a bookkeeper – They needed the books up to date and accurate!
Disappointment was clear when she told me how let down she felt of the promisesby an accountant to have the books and year-end tax return all handled but the accounts were months behind! Then she appointed a bookkeeper who was a little new to the Xerosoftware, but the bookkeeper still had the main Bank and Merchant payments with unreconciled transactions dating back 8 months to July!!! And communication with both was frustrating!
She needed a plan of action!
(There are5 easy steps to planning anything – start whereyou are at, decide what outcome/state youwantto have, what that state/position willcost in money (budget to maintain) what youneedto outlay set-up and get to that state, and what action we need to takenow to get there.)
WHERE it was at –
She had set up the bank feed, and started to learn how to do the entries in the Xero accounts. But it was slow learning this new software, and she wasn’t sure if she was entering the transactions correctly. The expenses she paid personally, were entered, but they came out of the business bank account – was that correct? The customer payments were simple. To keep up to date with who had paid, she entered them also, but some paid by direct transfer, others by EFT and she didn’t realise only the TOTALfor the day settled to the business bank account.
When we reviewed the company file, the bank had half the transactions with notes “What is this for?” since back in July 8 months ago!!! The customer payments to the bank didn’t match many deposits, as the Square Credit Card Merchant takes its % fee out before on-sending the balance – so the software can’t match them! There was a family loan to the business to assist with taking on a new shared office with another professional. Most of all, like many small business owners, she didn’t know how much the books can help her improve the business, nor how powerful a One-Page Business Plan and quarterly checklist for the accounts can be!
WANT to have –
She was sure the books could be up to date every month. And communication could be responsive and helpful – YES!
COST to have that state –
A monthly cost would need to be paid, as she was not enjoying the books, and wanted to do what she knew best – her service and products! She wanted to know if it could be done for $100 based on her current small business
NEED to spend to get there –
Getting it back on track was the key – what would it cost, and what would need to be done?
NOW what action to take –
After meeting Paul Humphreys of Account Keeping Plus, at a local council event 6 months ago, luckily she had kept his card (it stood out because it came with a chocolate attached!). He was easy to talk to and helpful – I’ll give him a call and see what he is like.
Well after several tips on ways to promote my business and market online, he explained how monitoring a few key indicators is so important to know where the business is going and if it’s achieving the goals I set. He explained how the different payments arrived in the bank and the need for clearing accounts and loan accounts for the family loan.
We arranged to meet, and I was given a complimentary Business Score –and later he emailed me the results that gave me a Business Plan On a Page – it really got me focused on the weak points!
He is now getting me up to date – finally! What a relief!
Need help? Not sure?
Call for FREE30min advice / strategy session today!
0407 361 596 Aust– No obligation!
You also get FREE30 min to assess the setup of your company in the software,
DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised!CLICK HERE
