EOFY Compliance. Are you ready?

08
May

With the countdown to the end of Financial Year officially on (just 52 sleeps to go!), it’s time for business owners around the nation to ensure all their books and accounts are in order so they start off FY2012-13 in tip top shape. It’s also time for many to get prepared for the year ahead, and that includes preparing for several changes to tax compliance.

So are we ready?

It appears not. During our recent business owner and management insights panel, we found that Australian business owners have significant knowledge ‘black spots’ about the many compliance updates being introduced in the new financial year (that’s right, the one that kicks off in under two months!), putting relationships with their employees and the ATO at risk.

Despite 69% of our panel participants describing themselves as confident that their business would be compliant with the 2012-13 compliance changes, further questioning revealed that we’re not as prepared as we think. The study revealed that 45% of Australian SMEs were unaware of the removal of the flood levy, 18% weren’t aware that there were changes to the tax free threshold, 62% were in the dark about changes to the reporting of building and construction contractor payments and 13% didn’t know that the carbon tax was being introduced. (If any of the above is a shock to you, it’s time to consult your accountant or financial advisor!)

So what does this mean for the engine room of our local economy? “Business operators who don’t gain an understanding of their knowledge deficits are at risk of paying too much tax or deducting too much tax from their employees’ pay packets in the new financial year. This could cause further time, money and paperwork burdens if these grey areas are not quickly attended to,” says our CEO, Tim Reed. He believes that SMEs need easily digestible, easily accessible information about what’s changing, which is why we’re launching a range of online resources that will help navigate key EOFY compliance changes. They’ll be available on our website later this month – so watch this space!

For now, here are key changes that should be on your radar.

The flood levy is to be removed for individuals who were impacted during the last financial year.
The carbon tax compensation measures for consumers will mean a payroll change for every employee to take into account the new tax thresholds.
The tax-free threshold for individuals will increase significantly to $18,200 per year and will mean a payroll change for every employee.
The low income tax offset will be reduced from $1,500 to $445 in 2012-13 (and to $300 in 2015-16).
The superannuation changes passed as part of the Minerals Resources Rent Tax legislation could apply to some businesses’ staff. This legislation was passed in March but further detail is not yet available.
The annual reporting of contractor payments to the ATO is due for the first time on 21 July 2013, for payments made in the 2012-13 financial year. Business owners in building and construction will need to ensure their systems are prepared to begin capturing this information from 1 July 2012.
Pending legislation - The tax loss carry back scheme enables companies to carry back up to $1 million worth of losses to get a refund of tax paid in the previous year. From 1 July 2013, companies will be able to carry back up to $1 million worth of losses against tax paid up to two years earlier.

Are you confident that your business is ready for 2012-13 compliance changes?

Kristy Sheppard | Manager, Public Relations – MYOB

What others are saying

Author

Suzanne

May 8, 2012 at 12:02 pm

Re:
•The annual reporting of contractor payments to the ATO is due for the first time on 21 July 2013, for payments made in the 2012-13 financial year. Business owners in building and constructionwill need to ensure their systems are prepared to begin capturing this information from 1 July 2012.

I read somewhere that MYOB was going to release an update that allowed you to tick which Suppliers are subbies so that reporting is easier for this? Is this true or do we need to create our own workaround using custom fields or identifiers?

Author

Kristy

May 9, 2012 at 7:41 pm

Hi Suzanne

Support for reporting of contractor payment is a feature that will be added to our accounting range of products. Our products will allow users to mark on the supplier card and in some cases an employee card those that must be reported on. They will also provide the reporting of these payments directly from within the product, which can then be provided to the supplier themselves or the government.

We will also be supporting the generation of the electronic file for submission to the government, but this will be added in an update later in the year when the government’s infrastructure is in place to accept these files. Note that the first reporting deadline for clients to send records of their ‘Taxable Payments’ to the ATO is not until July 2013.

Author

Molly

May 10, 2012 at 3:35 pm

I’d be really interested to know how MYOB calculate the value of an annual upgrade. For Premier, the cost of annual cover is $858. This is an increase of 13% over last year’s fee, when the increase in CPI over that time is less than 2% It also represents 46% of the current purchase price of the software. That’s a bit like paying $20,000 for a new car, and then paying another $9,000 every year to Ford or Holden for the privilege of being able to drive it.

Author

Diane

May 11, 2012 at 11:12 am

What about the new governement imposed requriments to publish on employee payslip the scheduled or planned date of remittance of super contibutions accrued to the employees nominated super fund?

Author

Kristy

May 16, 2012 at 11:04 am

Hi Diane

Thanks for your query. The reporting of such superannuation details on payslips has been deferred by the government until 1/1/2013. We will be supporting this in our products – once the requirements are finalised by the government.

Author

Kristy

May 16, 2012 at 11:10 am

Hi Molly

Thanks for your feedback regarding the price increase for your Cover subscription. We apply incremental increases each year to reflect the value provided to our Cover members and to invest in technology to enhance clients’ usability of our software and services. MYOB invests millions of dollars in research and development – $25 million per year, in fact – to develop and support our clients, and the products and services that help run their business.

Your subscription also provides:

* The latest compliance updates, which is especially important in this compliance-heavy year with the various tax changes that come into effect from July 1. These include personal tax changes related to clean energy (Carbon Tax), eg. increasing the tax-free threshold and adjusting the first two marginal tax rates, plus the removal of the Temporary Flood and Reconstruction Levy (Flood Levy) and changes to taxable payments reporting for the building and construction industry. To find out more about this year’s changes you can download our ‘Federal Budget & Compliance Impacts on Businesses in 2012’ whitepaper here: http://myob.com.au/myob/business/eofy-carbon-tax/eofy-2012-tax-resources-1257829743017 (scroll to the third last section at the bottom of this page)

* Regular upgrades to your software as they are released

* Exclusive benefits and discounts such as training and web services

* Priority access to dedicated phone support and email, as well as access to the MYOB Community Forum and Live Chat.

If it’s been a while since you looked into your Cover benefits then please feel free to visit http://myob.com.au/cover.

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