6 changes to tax laws business owners should prepare for FY 2023/24

6 changs to tax laws business owners should prepare for in 2023
The ATO has made several changes to the tax laws for the 2023/24 financial year that will effect lots of business owners, see what they are & how to handle them
Outline

Six tax laws that are changing in 2023/24 financial year

  • The ATO changes tax laws every year
     
  • An accountant can help you keep on top of the changes
 
  • An accountant or bookkeeper can help submit your tax returns & be compliant

Every year the ATO makes changes to the tax laws which is announces on its website. If a business owner is attempting to do their own tax returns it can be difficult to not only keep up with all the changes but also interpret how it may effect their operations. Simple mistakes can lead to an ATO Audit or Risk Review which you really want to avoid.

Every accountant in Sydney must keep up to date with these regulatory changes to tax laws as it is the only way any tax return can be submitted with 100% compliance based on the relevant criteria. Every small business has to understand the changes for each financial year as the new requirements come into effect. 

It typically means that accounting practices may need to change, different record keeping methods might need to be used or elegibility might change for deductions.  The main changes coming into play as of July 1st that will effect most business owners include the following;

 

Instant asset write-off

From 1 July the instant asset write-off threshold for eligible small businesses would be $20,000 on a per-asset basis for 12 months. From 1 July assets valued at more than $20,000 that could not be immediately deducted could be placed into the small-business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each following year.

 

Small-business energy incentive 

A tax incentive worth up to $20,000 would be available for small businesses next financial year to provide an additional 20 per cent depreciation for eligible assets that support electrification and the more efficient use of energy by small businesses. The scheme would provide businesses with an annual turnover of less than $50 million incentive to save on energy bills by making investments such as electrifying their heating and cooling systems, upgrading to more efficient fridges, or even induction cooktops. While the scheme was still pending passing through Parliament, eligible assets or upgrades would need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. 

 

Super guarantee

From 1 July the super guarantee rate would increase from 10.5 per cent to 11 per cent for all employees eligible to receive superannuation. Small-business owners would need to use the new rate to calculate super on payment made to employers on or after 1 July, even if some or all of the pay period was for work done before 1 July. 

 

National minimum wage and award rate

Small businesses to be aware that from the first full pay period on or after 1 July, the national minimum wage would increase to $23.23 per hour and that award rates of pay would be increased by 5.75 per cent. 

 

Single touch payroll

Small businesses were alerted to the requirement to have finalised their employees’ single touch payroll data by 14 July.  The ATO said employers were required to report pay-as-you-go withholding information every time they pay employees through single touch payroll with the amounts reported to be used as pre-fill information in activity statements from 1 July. 

 

Paid parental leave scheme

For employees whose baby was born or placed in their care on or after 1 July, the scheme would change with the 18 weeks of paid parental leave entitlement combined with the dad and partner entitlement of two weeks’ pay.  This change would mean partnered couples would be able to claim up to 20 weeks of paid parental leave between them, while parents who were single at the time of their claim could access the full 20 weeks.

Benefits of using a small business tax accountant to remain compliant with ATO tax rulings?

There are so many benefits of using a tax accountant to ensure your business is compliant with any existing or new ATO tax rulings. As a business owner, staying compliant with tax laws and regulations is crucial for the long-term success and sustainability of your company. The Australian Taxation Office (ATO) regularly updates its tax rulings and legislation, making it challenging for business owners to stay informed and ensure compliance when submitting annual tax returns. 

In such circumstances, partnering with a qualified tax accountant can provide invaluable assistance. We explain some of the benefits of using an accountant to manage changes to the ATO tax rulings, particularly for the 2023/2024 financial year, ensuring your business remains compliant and optimised for success.

 

  1. Stay Informed and Compliant:

Keeping up with changes to ATO tax rulings can be a daunting task, as tax laws are subject to frequent updates and revisions. By engaging the services of an experienced accountant, you can rely on their expertise to stay informed about the latest tax regulations and requirements. Accountants closely monitor ATO updates, ensuring that your business’s tax strategies align with the current laws. They will assist you in understanding and implementing changes related to deductions, exemptions, thresholds, and reporting requirements, ensuring your annual tax returns are accurate and compliant.

 

  1. Tax Planning and Optimisation:

An accountant with a deep understanding of ATO tax rulings can assist you in developing effective tax planning strategies. By proactively considering the impact of new laws and regulations on your business, accountants can optimise your tax position and minimise your tax liabilities. They analyze your financial situation, identify opportunities for deductions, exemptions, and credits, and devise strategies to maximise your tax benefits within the boundaries of the law. Leveraging their expertise, accountants can help you navigate complex tax scenarios, ensuring your business remains competitive and financially efficient.

 

  1. Reduce the Risk of Penalties and Audits:

Inaccurate or incomplete tax returns can result in penalties, fines, and even audits by the ATO. By working with an accountant, you minimise the risk of errors and omissions, reducing the likelihood of facing penalties or being selected for an audit. Accountants have a meticulous eye for detail and are well-versed in the documentation and record-keeping requirements mandated by the ATO. They can ensure that your tax returns are prepared accurately, supported by the necessary documentation, and submitted within the specified deadlines, giving you peace of mind and mitigating compliance-related risks.

 

  1. Expert Guidance and Advice:

Navigating the complexities of tax legislation can be challenging for business owners, especially when it comes to understanding the implications of new ATO tax rulings. Accountants serve as trusted advisors, providing you with expert guidance and advice tailored to your business’s unique needs. They can interpret the ATO’s guidelines and help you understand how they impact your business’s tax obligations. With their insights, you can make informed decisions that align with your financial goals and maximise tax advantages while remaining compliant with the law.

 

  1. Audit Support and Representation:

In the event of an ATO audit or inquiry, having an accountant by your side provides invaluable support and representation. Accountants are familiar with the audit process and can help you prepare the necessary documentation and information required by the ATO. They can liaise with the ATO on your behalf, ensuring effective communication and minimising disruptions to your business operations. Their expertise in handling audits and their knowledge of ATO tax rulings will prove invaluable in defending your business’s tax position and ensuring a smooth audit process.

 

  1. Focus on Core Business Operations:

Managing tax compliance and staying updated with ATO tax rulings can be time-consuming and distract you from focusing on core business operations. By entrusting these responsibilities to an accountant, you can free up your time and energy to concentrate on growing your business. Accountants can handle all aspects of tax compliance, including preparing and submitting annual tax returns, managing record keeping requirements, and communicating with the ATO. This allows you to redirect your efforts towards strategic decision-making, business development, and customer satisfaction.

 

Staying compliant with ATO tax rulings is vital for the financial well-being and sustainability of your business. Engaging the services of a qualified tax accountant in Sydney can offer numerous benefits, including staying informed and compliant, effective tax planning, reducing the risk of penalties and audits, receiving expert guidance and advice, and accessing support during ATO audits or inquiries. By partnering with an accountant, you can navigate the complexities of tax legislation with ease, ensuring that your business’s tax returns for the 2023/2024 financial year are accurate, compliant, and optimised for success. 

Do you use a bookkeeper, tax accountant or Certified Practising Accountants to prepare a tax return?

In Australia, both bookkeepers and tax accountants can assist business owners with submitting tax returns, while Certified Practising Accountants (CPAs) are qualified accountants who have obtained additional certification and meet specific professional standards to deliver even more support for a business owner.

Let us explain the roles and responsibilities of each in relation to tax return submission:

  1. Bookkeepers: they play a crucial role in managing day-to-day financial transactions and maintaining accurate financial records for businesses. While they are knowledgeable in areas of financial record keeping, reconciliations, and reporting, their role primarily focuses on bookkeeping tasks rather than providing tax advice or preparing tax returns.

    Bookkeepers can assist with organising and compiling financial data needed for tax return preparation, ensuring that all income and expenses are accurately recorded. They may also generate various financial reports and statements that can be useful during the tax return preparation process. However, it’s important to note that bookkeepers are not qualified to provide tax advice or handle complex tax matters. They typically work in collaboration with accountants to ensure that tax returns are prepared accurately and in compliance with applicable laws.


  1. Accountants are professionals who have a broader understanding of financial management and taxation. They possess the necessary knowledge and expertise to provide tax advice and assist in the preparation and submission of tax returns. Accountants can analyse financial data, identify tax deductions, credits, and exemptions, and develop effective tax strategies for businesses.

    Accountants can also offer guidance on various tax matters, such as understanding the impact of new tax laws, compliance with ATO tax rulings, and optimising your tax position. They can help business owners navigate complex tax regulations and ensure that tax returns are prepared accurately and submitted on time. Accountants are well-versed in the interpretation and application of tax laws and can provide valuable insights to maximise tax benefits while remaining compliant.


  1. Certified Practising Accountants (CPAs): Certified Practising Accountants (CPAs) are accountants who have obtained additional certification from CPA Australia, a professional accounting organisation. CPAs have met specific education, experience, and ethical requirements, and they are committed to maintaining high professional standards. Although this also means their breadth of experience, knowledge & understanding is broader than either an accountant or a bookkeeper so usually they would get involved with a business owner on a more strategic level.

    CPAs possess advanced knowledge and expertise in accounting and taxation. They can provide comprehensive tax advice, tax planning, and preparation of complex tax returns. With their advanced skills, CPAs can handle more intricate tax matters, such as dealing with multinational tax issues, business restructuring, and high-level tax planning strategies.
 

In Australia, while bookkeepers assist with financial record keeping and organising data, accountants and Certified Practising Accountants (CPAs) play a more significant role in providing tax advice and helping with the preparation and submission of tax returns. Accountants possess a broader understanding of tax laws and regulations, while CPAs have additional certification and expertise. It is advisable to work with qualified accountants or CPAs to ensure accurate tax return submission and compliance with applicable tax laws. 

For most business owners in Sydney using a bookkeeper will be sufficient, but if your business is slightly more complicated than ‘normal’ then using either a tax accountant or CPA will be a better choice.

Rick & Bryn
Rick & Bryn

Experienced accountants who love helping other business owners in Sydney to maximise profits, improve cash flow & grow their business.

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