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Company SetUp

Business Tips: Getting Ready for Year End

Some things to consider before 30 June 2021 if you run a business…

YEAR-END STOCKTAKE / WORK IN PROGRESS
If applicable, you need to prepare a detailed Stocktake and/or Work in Progress listing as of 30 June 2021. Review your listing and write-off any obsolete or worthless stock items.

WRITE-OFF BAD DEBTS
Review your Trade Debtors listing and write-off all bad debts BEFORE 30 June 2021. Prepare a
management meeting document listing each bad debt, as evidence that these amounts were written
off prior to year-end and enter these into your accounting system before 30 June 2021.

SMALL BUSINESS CONCESSIONS – PREPAYMENTS
“Small Business Concession” taxpayers can make prepayments (up to 12 months) on expenses (e.g.
loan interest, rent, subscriptions) BEFORE 30 June 2021 and obtain a full tax deduction in the 2021
financial year.

PRIVATE COMPANY (“DIV 7A”) LOANS
Business owners who have borrowed funds from their company in previous years must ensure that
the appropriate principal and interest repayments are made by 30 June 2021. Current year loans

must be either paid back in full or have a loan agreement entered in before the due date of
lodgement for the company return, or risk having it counted as an unfranked dividend in the return
of the individual.

TEMPORARY FULL EXPENSING
Businesses with an aggregated turnover of less than $5 billion can immediately deduct the business
portion of the cost of eligible new depreciating assets. Corporate tax entities unable to meet the $5
billion turnover test may still be eligible for temporary full expensing under the alternative income
test. The eligible new assets must be first held, and first used or installed ready for use for a taxable
purpose, between 7.30pm AEDT on 6 October 2020 and 30 June 2022.

For businesses with an aggregated turnover of less than $50 million, temporary full expensing also
applies to the business portion of eligible second-hand depreciating assets.

Businesses can also immediately deduct the business portion of the cost of improvements to eligible
depreciating assets (and to assets acquired before 7.30 pm AEDT on 6 October 2020 that would
otherwise, be eligible assets) if those costs are incurred between 7.30 pm AEDT on 6 October 2020
and 30 June 2022.

PAY EMPLOYEE SUPERANNUATION NOW
To claim a tax deduction in the 2021 financial year, you need to ensure that your employee
superannuation payments are received by the super fund or the Small Business Superannuation
Clearing House (SBSCH) by 30 June 2021.

You should avoid making last-minute superannuation payments as processing delays may cause
them to be received after year-end.