Set yourself up for success this tax time with our range of information, digital tools, and services to help make things easier for you.
Check if your registrations are up to date
Make sure you’re meeting your obligations when it comes to director ID, GST and pay as you go instalments.
You’ll need a director identification number (director ID) if you’re a director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation. This is a unique identifier that helps prevent the use of false or fraudulent director identities. It’s free and you only need to apply once.
Find out more at abrs.gov.au/director-identification-number.
Have you checked your GST turnover recently? Businesses that have a GST turnover of $75,000 or more, and new businesses that expect to reach that turnover in the first year of operation, need to be registered for GST. If you’re not currently registered, check each month to see if you’ve reached the $75,000 threshold. You need to register within 21 days of reaching the threshold or you may have to pay GST on sales made since the date you were required to register.
For more details see ato.gov.au/GST.
When you earn business or investment income, you may need to make pay as you go (PAYG) instalments. These help you keep a healthy cash flow by planning ahead for your income tax. You make regular instalments throughout the year based on your business and investment income. These are then offset against your tax, leaving you with little or no tax to pay.
Find out more at ato.gov.au/startingpaygi.
Follow the three golden rules when it comes to claiming deductions
You can claim deductions for most expenses you incur in carrying on a business. But it’s important you only claim what you’re entitled to. Follow these three golden rules to make sure you’re across what you can claim:
The expense must have been for your business – not for private use.
If the expense is for a mix of business and private use, you can only claim the portion that’s used for your business.
You must have records to prove the expense and show how you worked out the business portion of an expense.
Find out more at ato.gov.au/businessdeductions
Work out your motor vehicle expenses the right way
Your business structure and the type of vehicle you use affects the way you calculate motor vehicle expenses. If you operate your franchise as sole trader or partnership, you can use the cents per kilometre or logbook method for a car, but for any other vehicle you need to claim the actual costs based on receipts. If you operate your franchise as a company or trust, you can only use the actual costs method.
There’s a limit on the cost you can use to work out the depreciation of passenger vehicles (except motorcycles or similar vehicles) that are designed to carry a load of less than one tonne and fewer than nine passengers. The maximum value you can use for calculating your depreciation claim is the car limit (irrespective of any amount you were paid for a trade-in) in the year in which you first used or leased the car. The car limit for the 2022-23 income year is $64,741.
Find out more at ato.gov.au/motorvehicleexpenses
Know how to claim home-based business expenses
If you operate your business from your home and have a dedicated area set aside as a ‘place of business’, you may be able to claim occupancy and running expenses. These can include mortgage interest or rent, electricity and phone use.
The methods used to calculate running costs have recently changed. For the 2022-23 income year, you may be able to use the revised fixed rate method. This is a fixed rate of 67 cents per work hour for specific expenses such as electricity, internet and phone. You can separately claim for any other running expenses that aren’t covered by the rate, as well as for the decline in value of depreciated assets such as laptops.
Find out more at ato.gov.au/homebasedbusiness
Take advantage of small business concessions
Find out whether you’re eligible for small business concessions, such as simplified depreciation rules, the small business income tax offset, immediate deductions for pre-paid expenses and temporary full expensing. They can help reduce your tax bill and some may also save you time.
Check out ato.gov.au/concessionsataglance
Keep track of losses so you can claim a deduction for it later
If your business makes a loss in a current year, you can generally carry forward that loss and claim a deduction for your business in a future year. Your business structure affects the way you can claim a tax loss. If you have more than one tax loss in a year, you’ll need to consider each of them separately.
Find out more at ato.gov.au/businesslosses.
You may be eligible for the loss carry back tax offset, which means you can offset a tax loss against profits in a previous year.
Check if this applies to you using our loss carry back tool at ato.gov.au/LCBtool.
Remember to include all your income
It’s important to include all income in your income tax return. This includes income from sales (cash and credit or debit card transactions), coupons and vouchers, and sales made online. If you receive income in other forms, such as in the form of goods, services or other products or benefits, for example, flights or accommodation, their market value is included as income in your tax return. You may also earn income that’s not part of your everyday business activities, such as making capital gains through selling assets.
Find out more about different types of income you need to include at ato.gov.au/businessincome.
Find out about the tax implications of government grants, payments and stimulus
Grants or support payments from the government are generally taxable and need to be included as assessable income in your tax return. However, some are specifically made non-taxable, including some COVID-19 payments you received to support your business.
More details are available at ato.gov.au/COVID19supportpayments
Know how to report the use of business money or assets for private purposes
Keep accurate records of any money or assets that you use from your business for private purposes. You may need to report these transactions in your income tax return.
Find out more at ato.gov.au/businessmoney
Check that your records are complete and accurate
Good record keeping is essential to helping you manage your business. Generally, you need to keep most records for five years, starting from when you prepared or obtained the record, or completed the transactions or acts those records relate to, whichever is later. Store them in a safe place and they must be in English (or easily converted to English).
Find out more at ato.gov.au/recordkeeping.
To check how well you’re keeping your business records and where you might be able to improve, use our record keeping evaluation tool at ato.gov.au/ recordkeepingevaluation.
Get expert help if you’re having trouble with cash flow
Having enough cash at the right time makes it easier for you to manage expenses and meet your tax obligations. A cash flow projection will help you understand your likely cash position at any time and identify any fluctuations that may lead to cash shortages.
Find out how to prepare a cash flow projection at ato.gov.au/managecashflow.
Your tax professional can also help you manage your cash flow using the Cash Flow Coaching Kit (ato.gov.au/cashflowcoachingkit)
Make use of tools and services available for support
We have a wide selection of tools and services to support you to get your tax and super right. Visit ato.gov.au/SBsupport for everything you need to know for tax time, handy calculators, links to our online services and how we can help if you’re having trouble meeting your tax obligations. To stay up to date with the latest ATO news, subscribe to the Small Business Newsroom.
You can find a range of additional resources on managing your business from the Australian Small Business and Family Enterprise Ombudsman at https://www.asbfeo.gov.au/my-business-health/home.
If you’re struggling with the current challenges in the small business environment, NewAccess for Small Business Owners is a free and confidential mental health program, developed by Beyond Blue to give small business owners support. Find out more about the program at https://www.beyondblue.org.au/get-support/newaccess/newaccess-for-small-business-owners