Published on 23/06/2015 by Punchmedia

10 Legalities & To-Dos SMBs Must Know This EOFY

Now is the time of year most small business owners fear, this end of financial year more so than ever. Why? There are several new legislative changes that will affect your small business in the new financial year. This article outlines major changes that will affect your small business in the new financial year. Obtain a solid understanding of all major changes so that you can hit the ground running and focus on the more important aspects (creating certainty in the revenue stream of your small business). This article also looks at some essential tips and tricks to come in mind as the financial year comes to a close. These tips will assist in planning and setting up for the 2015-2016 financial year. Remember putting the hard work in now will assist with organisation and success in the long run.

Legal Changes

1. Minimum Wage Increased

The Fair Work Commission has handed down its decision to increase the minimum wage from a minimum base rate of $16.87 per hour to $17.29 an hour from July 1. Workers will have this entitlement from July 1, so employers need to take the wage increase seriously and be ready to increase the wage packet immediately, or be ready to address issues such as back pay.

2. High Income Threshold for Unfair Dismissals Increased

Unfair dismissal is when an employee is dismissed from their job in a harsh, unjust, or unreasonable manner. This is particularly important if an employer is performance managing an employee and is considering dismissal. Employees working for a small business must be employed for at least 12 months before they can apply for Unfair Dismissal. Further, the threshold is set to increase on July 1, 2015 to $136,700.

3. South Australia WorkCover Changes

The South Australian State Government, from July 1, 2015, will replace the South Australian WorkCover Scheme to the new Return to Work Scheme. This scheme applies to non-seriously injured workers only. The scheme means that from July 1, non-seriously injured workers who have a claim to weekly payments will have payments capped at a maximum of two years (from the date of injury). Non-seriously injured workers will have their medical expenses capped at one-year from the last entitlement, after income support ends. For employers this means the measures will see a drop in WorkCover premiums.

4. New Employee Share Scheme Legislation

The new scheme will give employers flexibility. How? Incentivising employees through offering company shares, as well as the option to have equity in the company. Currently, when employees receive share options from a company, they are taxed. As of July 1, 2015, the new scheme will stop them being taxed up front. In fact, the employees will only be taxed once they sell the shares.

5. Superannuation

There will be no changes to superannuation contributions. Rather, they will remain consistent at 9.5%. However, SuperStream requires employers to make super contributions on behalf of their employees by submitting data and payments electronically (including EFT Payments, Direct Debit, and BPAY). As of July 1st, 2015, small businesses employing fewer than 20 people must be compliant with SuperStream. If you are not compliant with SuperStream, the ATO will be imposing a penalty.

Essential Tips & To-Dos

1. Use a Registered Tax Agent

This is a simple one, ensure your tax agent is registered with the Tax Practitioners Board – link. Unfortunately there is no protection for taxpayers who use unregistered agents so this is certainly an aspect you need to be aware of.

2. Review Finances

Whilst you can complete this task on your own, it is advised you sit down with your accountant or bookkeeper for a subjective third-party viewpoint to then review your finances.

• Did you meet your targets last financial year?
• What can you do differently next financial year?
• Set performance targets – these will help you to stay on track
• Create a cash flow forecast – this will help manage any potential shortfalls and ensure you can still pay staff and suppliers

3. Analyse and Update Marketing & Business Plans

Reviewing and analysing previous marketing and business plans can often be overlooked. Do not underestimate the power of such tasks; doing so will help with the following:

• Assessing performance of current strategies – are they working? If not, why?
• Reiterate and redefine current goals and priorities – this helps with accountability and staying on track
• Prioritising the efforts of the business and employees in order to maximise output

Similarly, look at the structure of your business. Does it need restructuring or changing? Or, is it working as effectively and efficiently as possible?

4. Review Insurances

Insurance is one of those things that you just to have to be across, despite it being dull and time-consuming. Check that you have the right level of insurance, if you are unsure, make sure you check with a professional who knows the ins and outs of your business. Particularly if your circumstances have changed, don’t assume you’re covered. In fact, it may even be beneficial to read the product disclosure statements carefully, as the definition of certain terms can vary from one insurer to another.

5. Backup & Secure Files

Use the end of financial year as a reminder to backup your data. Financial, registration, customer, and other important business data documents and details need to be secured in an off-site location. This will ensure that if anything untoward happens, you will still have important documentation to keep your business up and running. Want some more advice on purchasing your very own SMB? Check out the business for sale page AnyBusiness here.

punchmedia

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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