The end of the financial year is an important time for Australian businesses. Not only is it the point at which companies take stock of their financial health and draw up financial statements, but the end of the financial year signals that it’s time to complete your tax return. Find out everything you need to know about the financial year in Australia, right here.
What is the financial year?
The financial year is a 12-month period that the government/businesses use for tax purposes. At the end of the financial year, businesses are required to finalise their books and complete their tax return (summary of expenses and income for the financial year), which the Australian Tax Office (ATO) will use to determine the amount of tax owed by your business.
When does the financial year start?
In Australia, the financial year starts on 1 July.
When does the financial year end?
The end of the financial year in Australia is 30 June.
The date upon which you are required to submit your tax return depends on the type of business that you operate. Here’s everything you need to know:
Sole traders and self-employed – Must lodge an individual tax return from 1 July to 31 October.
Partnership – Must lodge a partnership tax return from 1 July to 31 October. If you’re lodging your tax return with a registered tax agent, you’ll need to contact them for more information.
Company – Lodgement dates vary, but most company tax returns are due by 28 February. However, it’s important to check with the ATO for your specific date.
What do you need to do at the end of the financial year?
There are several tasks that you should complete at the end of the financial year. Here’s a rundown of everything you need to do at the end of the financial year in Australia:
Prepare your financial reports – To lodge a tax return, you’ll need a profit and loss statement, balance sheet, cash flow statement, and the previous year’s tax return. Ensure that all these documents are ready to go.
Lodge your tax return – Now, it’s time to lodge the tax return for the financial year. You can do this yourself or hire an accountant to handle it for you.
Submit your BAS statement – Business Activity Statements need to be lodged monthly, quarterly, or annually (depending on your turnover). If you’re reporting annually (because you’re voluntarily registered for GST and your GST turnover is lower than $75,000) then your BAS statement submission date is 31 October.
Review your finances and business plans – The end of the financial year is also an excellent time to set yourself up for the year ahead. Think about your goals and priorities, the viability of your business strategy, changes in your business/financial environment, and new opportunities on the horizon. You should also go over your bookkeeping with your accounting to check whether you met your targets and what you may decide to do differently over the next financial year.
Update your insurance/business structure (if necessary) – Have your circumstances changed over the course of the preceding financial year? If so, your insurance coverage may need a revamp. You should also think about the extent to which your business has grown, and whether you need to amend your business structure to accommodate this, as compliance/tax regulations may differ depending on your overall business structure.
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