Tax time essentials: Small business tax time toolkit

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(ATO)

 

Our Tax time toolkit for small business has fact sheets to help you with:

  • home-based business expenses
  • motor vehicle expenses
  • travel expenses
  • using your company’s money or assets
  • pausing or permanently closing your business.

You can also download the Small Business Tax Time Toolkit (PDF, 1.0MB)This link will download a file

For more information see Tax time essentials for individuals.

Reporting JobKeeper payments

JobKeeper payments are taxable and need to be included in tax returns.

If you’re a sole trader who has received JobKeeper payments, you need to include the payments as business income at the label ‘Assessable government industry payments’ in your individual tax return.

If your business is a partnership, trust or company, and your business received JobKeeper payments, you need to report JobKeeper payments as either:

  • business income at the label ‘Assessable government industry payments’ in your partnership or trust tax return
  • income at the label ‘Assessable government industry payments’ in your company tax return.

Your accounting method will also affect the total JobKeeper payments that need to be included in your tax return. If your business operates on:

  • an accruals accounting basis
    • JobKeeper payments relating to valid business monthly declarations made on or before 30 June 2020 are included in your 2019–20 tax return
    • JobKeeper payments relating to valid business monthly declarations made on or after 1 July 2020 are included in your 2020–21 tax return
  • cash accounting basis
    • JobKeeper payments you received on or before 30 June 2020 are included in your 2019–20 tax return
    • JobKeeper payments received on or after 1 July 2020 are included in your 2020–21 tax return.

From early July, sole traders who have received JobKeeper payments for themselves and any eligible employees will also be able to find the total amount of JobKeeper payments they’ve received through Online services for business and myTax. Their registered tax agent will also get this information. The amount will be provided as ‘information only’ and will not be mapped to a label. Remember to review and cross-check the payment amounts against your own records to make sure they’re accurate.

If you have received a JobKeeper overpayment, you will need to repay the amount.

Depending on the circumstances, we may decide it does not have to be repaid (particularly if there was an honest mistake) and will let you know.

If you:

  • have repaid, or are repaying JobKeeper overpayments, you do not need to include the amount as assessable income in your tax return. If you have already included the overpaid amount in your business income tax return in an earlier year, you will need to amend that earlier return to reduce your assessable income by the amount you have repaid
  • don’t need to repay JobKeeper overpayments because we have waived it, you will still need to include the overpaid amounts as assessable income in your business tax return.

Your employees won’t need to do anything different as the payments will be included as salary and wages, or an allowance, in the regular income statement or payment summary you provide as an employer.

See also:

Reporting cash flow boost credits

You don’t pay tax on cash flow boost credits, as they are non-assessable non-exempt income. How you report the amounts in your returns or financial statements is different depending on your business structure.

Cash flow boost credits do not need to be included in your tax return. However, if you have included the amounts in your gross income for accounting purposes, you can include it at:

  • item P8 business income and expenses as other business income and as an income subtraction reconciliation amount in the individual tax return for sole traders
  • item 5 as other business income and as an income subtraction reconciliation amount for partnership and trust tax returns
  • item 6R other gross income and item 7Q other income not included in assessable income for company tax returns.

See also:

Other government payments

If you’ve received an Australian, state or territory government grant or payment in response to recent natural disasters or COVID-19, you may need to include it in your assessable income.

See also:

Single Touch Payroll

With Single Touch Payroll (STP), you report employees’ payroll information to us each time you pay them through STP-enabled software.

STP started on 1 July 2018 for employers with 20 or more employees and 1 July 2019 for employers with 19 or fewer employees. If you haven’t started reporting through STP, you need to start as soon as possible.

Every year, employers must make an end-of-year finalisation declaration through STP. Generally, you need to make this declaration by 14 July each year.

You can finalise your data earlier if it’s ready. The sooner you finalise your employees’ information, the sooner they will be able to lodge their tax returns. If you have been impacted by COVID-19 and need additional time, you can complete your STP finalisation up until 31 July. It’s important that you finalise your employees’ data by 14 July if you can, and let your employees know when you have so they can lodge their income tax returns.

Reporting through STP means you no longer need to give your employees payment summaries or lodge an STP payment summary annual report with us.

Your employees can find the information they need in their income statement in ATO online services through myGov, or by contacting their tax agent.

Find out about:

See also:

Economic stimulus measures

As part of the 2020–21 Budget, the government is implementing a number of measures to help businesses recover from the impact of COVID-19.

JobMaker Hiring Credit

The JobMaker Hiring Credit scheme is an incentive for businesses to employ additional young job seekers aged 16–35 years.

Eligible employers can access the JobMaker Hiring Credit for each eligible additional employee they hire between 7 October 2020 and 6 October 2021.

Through the JobMaker Hiring Credit scheme, eligible employers may receive payments of up to:

  • $200 per week for each eligible additional employee aged 16–29 years old inclusive
  • $100 per week for each eligible additional employee aged 30–35 years old inclusive.

All payments under the JobMaker Hiring Credit scheme are assessable as ordinary income.

The normal deductions apply for amounts your business pays to employees if those amounts are subsidised by JobMaker Hiring Credits.

JobMaker Hiring Credits are:

  • not subject to GST
  • do not need to be included in your business activity statements (BAS).

Temporary full expensing

Eligible businesses can deduct the business portion of the cost of eligible depreciating assets first held and used or installed ready for use between 7:30pm (AEDT) on 6 October 2020 until 30 June 2022.

Loss carry back

Eligible corporate entities may be able to claim a refundable tax offset in their 2020–21 and 2021–22 company tax returns, if they made a tax loss in the 2019–20, 2020–21 or 2021–22 income years. Loss carry back is intended to interact with temporary full expensing, encouraging new investment which may result in tax losses. The choice to carry back tax losses may result in a tax refund which will increase business cash flow.

See also:

Online services

Our online services help make it quick and easy to manage your tax and super:

  • ATO online services – sole traders can access this on any device to lodge their tax return, manage activity statements, PAYG instalments and accounts, make payment arrangements and more.
  • Online services for business – this service allows you to prepare and lodge activity statements and annual reports, organise payment plans, manage accounts, and more, at a time that’s convenient to you.

Help to lodge and pay

It’s important to lodge on time, even if you can’t pay. This will give you certainty of your tax and super position, which means you’ll have a greater understanding of what you need to do, when to ask for help, and the support options available to you. If you forget a due date or are stressed that you won’t be able to lodge or pay on time, it’s never too late to ask for help.

We have options to help you if you’re having problems lodging or paying on time, including making a payment plan in Online services for business for amounts owing up to $100,000.

Find out about:

See also:

Tools to help you

Use our calculators and tools to help you run your business. These include:

See also:

Learning resources

We also have learning resources to help you run your business, such as:

  • Small business workshops – face-to-face workshops are currently on hold, but you can register for an online webinar
  • Small business webinars – register to find out about tax and super obligations and entitlements for your business, with topics including
    • GST
    • activity statements
    • income tax deductions
    • home-based business
    • record keeping
  • atoTVExternal Link – watch our videos about tax and super
  • ATO podcast – Tax inVoice – listen to the latest tax and super information
  • Record keeping for business – find out what you need to do to meet your business’ record-keeping requirements
  • PAYG withholding – find out if you need to register for PAYG withholding, how much tax to withhold, payment summaries or income statements and more
  • PAYG instalments – many small businesses automatically enter the PAYG instalment system after they lodge their tax return, but entering earlier might help reduce the tax you may need to pay at the end of the year
  • Super for employers – everything you need to know about paying super for your workers
  • Fringe benefits tax (FBT) – find out if you need to pay FBT on certain employee benefits
  • Small business showcaseExternal Link (fairwork.gov.au) – access information on workplace laws and other topics relevant to small business owners at every stage
  • Business.gov.auExternal Link – access government transactions and services, as well as information on how to plan, start and run your business.

Dealing with disasters

If you’re affected by COVID-19, or a natural disaster such as a bushfire, cyclone, flood, storm or drought, we can help you with your tax affairs so you can focus on your family and community.

Depending on your circumstances, we may:

  • give you extra time to pay your debt or lodge tax forms such as activity statements
  • help you find your lost tax file number (TFN) after verifying your identity
  • re-issue tax returns, activity statements and notices of assessment
  • help you re-construct lost or damaged tax records
  • prioritise any refunds you are owed
  • set up a payment plan tailored to your individual circumstances, including an interest-free period
  • remit penalties or interest charged during the time you have been affected.

Find out more:

More support and services

Additional resources that can help you with your small business include:

  • Small business newsroom – subscribe and get the latest tax and super news delivered to your inbox
  • Live chatExternal Link – ask about GST, ABN, myGovID, BAS and your account from
    • 3.00pm–8.00pm (AEDT) Monday to Friday
    • 10.00am–2.00pm (AEDT) on Saturday (except public holidays)
  • Contact us for account balance, business registration, business tax return preparation, BAS enquiries and more
  • National Relay ServiceExternal Link – if you have difficulty hearing or speaking to people on the phone, you can contact us through the National Relay Service
  • After-hours call back serviceExternal Link – get help at a time that’s convenient for you by completing the online form to book a time to talk to us from 6.00pm–8.00pm Monday to Thursday (except public holidays)
  • Join the discussion online – follow us on social media for tips and updates or check out our ATO Community forum to ask questions about tax and super
  • Registered tax or BAS agentsExternal Link – contact a registered agent to help manage your tax and super
  • Support in difficult times – support for anyone who needs help with their tax and super during difficult times.

Aboriginal and Torres Strait Islander peoples and other languages

In addition to our range of tools and services, we have information:

  • on Tax for businesses – for Aboriginal and Torres Strait Islander peoples
  • in languages other than English (including Arabic, Chinese, Hindi, Korean, Punjabi and Vietnamese) to help people from culturally and linguistically diverse backgrounds understand tax and super in Australia.

If you would like to speak to us, you can also:

  • phone our Indigenous Helpline on 13 10 30
  • phone the Translating and Interpreting Service (TIS) on 13 14 50 if you would like to talk to us in your language.
Last modified: 05 Jul 2021
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Categories: Tax