Tax time reminders for small businesses from the ATO

Tax time is upon us, and the ATO has reminded small businesses of a number of areas they should be thinking about in the lead up to preparing their tax return and looking forward to 1 July, including Single Touch Payroll (STP) obligations; PAYG instalments; and reviewing their tax-deductible expenses, eligibility for small business concessions and their overall record-keeping. The ATO has also highlighted its self-paced online learning platform for small businesses to help small businesses understand their tax obligations.

The ATO is encouraging small business owners to prepare for their 2024 tax return lodgment by considering the following:

• Purchase and keep records of tax-deductible items: The end of the financial year on 30 June represents the last chance to purchase any tax-deductible items that the business intends to claim for 2023–2024. Small businesses should ensure that any tax-deductible items can be documented both for cost and usage, including apportionment for work and private use where relevant.
• Check small business concessions: Check if the business is eligible for any small business concessions. Small businesses, depending on eligibility, may be able to access a range of concessions based on their aggregated turnover – this applies to sole traders, partnerships, companies and trusts – including CGT concessions, the small business income tax offset or the small business restructure roll-over.
• Finalise STP records: The ATO reminds small businesses that if they have employees, the 2023–2024 STP information must be finalised by 14 July. This important end-of-year obligation ensures that employees have the correct information required to lodge their income tax return. STP information for all employees paid in the financial year, even terminated employees, must be finalised.
• Check your PAYG withholding and instalments: The Stage 3 income tax cuts became law earlier this year. From 1 July, individual rates and thresholds will change and will impact PAYG withholding for the 2025 financial year. Small businesses should check that the correct PAYG withholding tax tables are being used and that their software has updated to the new withholding rates from 1 July. If a small business thinks that their PAYG instalments could result in paying too little or too much tax, instalments may be varied. This can be done when lodging the activity statement through Online Services for Business or via a registered tax agent. The variation should be lodged on or before the day the PAYG instalment is due and before lodging the tax return for the following financial year.
• Review record-keeping: Looking toward the next financial year, small businesses should review their record-keeping from the past year and see if anything needs to be done differently in the future.

As part of tax time preparation, the ATO encourages small business owners to consider the self-paced courses offered on the ATO’s Essentials to strengthen your small business online learning platform. Launched in February of this year, the platform offers free courses to help small business owners understand their tax and superannuation obligations and is a useful resource for tax practitioners to share and use with staff and clients. Co-created by the ATO with small businesses and educational experts, the platform offers more than 20 courses including videos, case studies, audio content and written information, quizzes, and learning pathways that can be customised. Courses include:

• life cycle stages – idea, start-up, day-to-day, change and exit;
• reporting obligations – for example, GST, FBT, employees;
• claiming small business tax deductions; and
• small business concessions.