Is EOFY a good time to buy things for my business?

End of Financial Year can be a good time to buy things you need for your business. In today’s Tax Tip, Peter explains why one of his tips is “Buy stuff!”

Buy Stuff

Buy things you need for your business. Take a good look around and see what you need. What’s broken, busted, burst or battered? If you need new things, it could be a good idea to get new stuff before 30th June.

This is because you can take advantage of the Instant Asset Write Off. It lets you claim 100% tax deduction for assets purchased up to $150,000. The asset needs to be installed and ready for use by 30th June to be eligible.

But the tax break goes back down to $1,000 from 1st July. After 30th June, assets which cost more than $1,000 will be depreciated over their useful life again. This means the tax deduction gets spread over several years and the benefit is not as great.

Yes, I know the COVID downturn has had an impact on many businesses. Profitability might have taken a hit. But you should still take a look at your figures to see where you stand. They might show a tidy profit, in which case it could be a good time to renew that busted piece of equipment.

Of course, it’s not wise to spend money if you don’t need the equipment, or if you need the cash to support your business in the months ahead. Which is why it’s best to talk your plans through with your accountant first.

Let me know if you need a hand.

JobKeeper Business Monthly Declaration

To receive the JobKeeper payment, your business must make a monthly declaration to the ATO. This is referred to as a business monthly declaration.

Here’s what is involved in making the declaration.

Note the deadline: The business monthly declaration must be lodged with the ATO by 14th of the month to claim JobKeeper payments for the previous month. For example, the declaration for May must be made by 14th June.

Before you make the declaration you will need to:

  • Work out your actual GST turnover for the current month.

  • Work out your projected GST turnover for the following month.

  • Make sure you have paid each eligible employee at least $1,500 (before tax) per JobKeeper fortnight.

  • Re-confirm your eligible employees and eligible business participant (if you have one). If your eligible employees have changed the ATO need to be notified of this.

  • Re-confirm your financial institution details for receiving the payments.

And remember, you can enrol for JobKeeper throughout the period from 30 March to 27 September. So, if you suddenly find turnover falls by 30% or more as a result of Covid-19 you may be eligible to claim JobKeeper. However, to claim the JobKeeper payment for a fortnight you must enrol before the end of that JobKeeper fortnight.