As the financial year wraps up, it’s the perfect opportunity to step out of the day-to-day grind and set your business up for future success.
During the end of financial year (EOFY), the insights and guidance from a lawyer can prove invaluable. They can help interpret upcoming legislative changes, address compliance matters, and assist with maximising returns. As we edge closer to wrapping up FY23, here are 10 crucial questions to ask your lawyer, ensuring your business is well-prepared and legally resilient for the new financial year.
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1. What impact will recent legal changes have on my business?
This month, sweeping amendments to Australia’s industrial relations landscape are being ushered in due to the passing of the Secure Jobs, Better Pay bill last year. Starting from June 6, Australian workplaces will have to adapt to new multi-employer bargaining rules, revised flexible working provisions, and modifications to pay secrecy clauses.
Key changes you should explore with your lawyer include:
- Expansion of multi-employer bargaining: The recently named cooperative workplaces bargaining stream will facilitate multiple workplaces to consolidate under a single agreement.
- Changes to the Better Off Overall Test (BOOT): The BOOT, which gauges if workers will benefit from better conditions under a new enterprise agreement compared to an underlying modern award, will be revised for enterprise agreements made on or after June 6.
- Flexible working arrangements: Enhancements to the Fair Work Act will broaden and strengthen access to flexible work arrangements for long-term workers. You can read more about these changes in our comprehensive guide.
- ‘Zombie’ agreements: To modernise working conditions, ‘zombie’ agreements — outdated workplace agreements initiated before 2010 — will automatically terminate on December 7 this year.
- Pay secrecy rules: The Secure Jobs, Better Pay Act will curb pay secrecy clauses that prevent employees from discussing their wages with others.
These changes could significantly impact your business operations, making it essential to consult with your legal counsel to understand their implications and ensure you’re adequately prepared.
2. Is now the right time to change business structures?
The end of the financial year provides an ideal opportunity to reassess your business structure. It could be the perfect time to register a company if your current business structure’s drawbacks – like higher individual tax rates and financial liability – outweigh its benefits.
3. What can I claim?
As the financial year wraps up, you should consider how to maximise your deductions. There are few extra incentives to consider before 30 June:
- The Instant Asset Write-Off: This provision allows eligible businesses to claim an immediate deduction for new assets.
- The Small Business Technology Investment Boost and Business Skills and Training Boost: Small businesses (with annual turnover of less than $50 million) will be able to deduct an extra 20% for expenses related to digitalising their operations.
Various products and services are tax-deductible, including fees for accounting, bookkeeping, and legal services. You could even claim a deduction for our legal plans.
4. What does the Budget mean for my business?
The recently released 2023 Federal Budget says a lot about the Government’s plans for Australia’s economic recovery. Notably, the priority is to get Australians in jobs and ease the burden on businesses. Some announcements in the Budget you might want to ask your lawyer about are:
- A $23.4 million investment in building resilience to cybersecurity threats for small businesses
- An estimated one million eligible small businesses to have $325 deducted from their power bills
- Support for small enterprises to adopt artificial intelligence technologies to improve business processes and increase competitiveness
- A lodgement penalty amnesty program for small businesses with aggregate turnover of less than $10 million to encourage them to re-engage with the tax system
- A halving of the increase in quarterly tax instalments for GST and income tax in 2023–24. Instalments will only increase by 6 per cent instead of 12 per cent
5. How can I recover money owed to my business?
Having debts owed to you can be frustrating, especially when you’re trying to balance the books for EOFY. Your lawyer can advise on the correct process to follow to recover a debt, from issuing a letter of demand to lodging a claim in Court.
6. How do I manage employee pay increases?
The end of the financial year is a common time for employees to seek salary increases. Consult with your legal team to devise a strategy that will either allow you to meet their request or suggest alternative compensations, ensuring you remain competitive in the upcoming financial year.
7. What tax errors will the ATO be cracking down on this year?
The ATO annually discloses common tax errors they intend to scrutinize. Familiarize yourself with these, as well as any key changes to tax policies, to avoid potential complications. This year, the ATO is expected to concentrate on:
- Proper record-keeping
- Claims related to work-from-home expenses
- Reporting of capital gains or losses from cryptocurrency trading
- Secondary income or revenue streams (“side hustles”) that haven’t been reported
- Double-dipping tax deductions
Consult with your legal counsel to ensure you’re compliant with all regulations and minimize the risk of misunderstandings with the ATO.
8. How far ahead should I plan?
Planning ahead is always smart, but you don’t want to plan so far into the future that you can’t adapt to changing circumstances. Your lawyer can advise on how far ahead you should plan your budgets and account for expenses such as tax, salaries and general administration.
9. What’s the best way to maintain my records?
Accurate record keeping goes a long way when it comes to EOFY. Your lawyer can provide some recommendations on how your books should look all year round, and how you can maintain them.
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10. Are there any changes to tax laws I should be aware of?
Tax laws tend to change fairly frequently, particularly in light of the pandemic. It’s worth checking with your lawyer whether there are any updates that will impact your business.
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