Financial year in Australia: Important dates & information
Instead of running wayward with calculations and estimations, all businesses progress in terms of financial years. A financial year is similar to the usual Gregorian year of 12 months; just the start and end of the financial year change.
Having a concrete time period for making all calculations, setting targets, projecting estimations, and tracking growth is important to take the business forward prudentially. A financial year also serves as a universally standard basis for the comparison of companies and industries.
What is the financial year?
A financial year is similar to a normal year of 12 months. However, the start and end dates of a financial year are different than usual. This is done for tax purposes. A financial year in Australia begins on 1 July and ends on 30 June.
For example, 1 July 2022 – 30 June 2023 is a financial year in Australia. All businesses are supposed to wrap up their paperwork, taxes, and accounting by the end of every fiscal year.
A summary of all expenses and income made by the business in the financial year has to be submitted to the Australian Taxation Office (ATO) to calculate how much is owed in the form of taxes.
When does the financial year start and end?
One fiscal or financial year in Australia starts on 1 July and ends on 30 June. All taxes, filings, decisions, targets, etc., are measured in a span of one financial year for all businesses.
The obligations and requirements of tax filing are different for different business types and also vary on the basis of the way a company submits its tax returns.
What needs to be submitted at the end of a financial year?
As stated above, there are different requirements and details needed for the tax filing of different business types. However, in short, a tax return is a synopsis of the expenses and income made by a business in one financial year.
Sole traders
Sole traders or self-employed people are supposed to file for an individual tax return at the end of every financial year. All the work expenses and income generated are considered under individual tax returns but as a separate business schedule.
These tax returns can easily be filed on paper or online through myTax (accessed through myGov) or a tax agent. All income, whether earned in Australia or internationally, has been declared under the Australian Tax Return.
Partnership/Company
At the end of every financial year, companies are also required to submit a summary of the earned incomes and expenses made. However, the business file for a separate company tax return.
The owner and other stakeholders of the company have to lodge individual tax returns for the income they earn from wages and dividends of the company. SBR-enabled software can help companies file their tax returns or paper or tax agent.
EOFY lodgement dates for small businesses
As a sole trader or self-employed person, tax returns have been filed from 1 July to 31 October every fiscal year. Your tax agent or government websites can give you all the information necessary.
Tax returns lodged for your partnership are again from 1 July to 31 October in every financial year. Again, tax agents and government websites provide all essential information.
Unlike sole traders and partnerships, company tax filing dates are different. Every financial year many companies file their tax returns by 28 February. However, the official ATO website will provide all specific dates.
What do you need to do at the end of the financial year?
1. Prepare financial reports
The first step for filing your tax returns is collecting all important accounting and financial documents.
This includes the previous year's tax returns, balance sheets, income statements, profit and loss documents, etc. Hence, make sure that all these are updated, properly sorted, and collected.
2. Tax return
Now, either go to the official government tax website to file the tax returns on your own or hire a consultant/agent to do the taxes for you.
Do you own a small business and wanted to know more about filing tax returns for your business? Check out our guide on how to file tax return for small business and do it in the best way.
3. Submit BAS statement
BAS stands for Business Activity Statement. This needs to be recorded monthly, quarterly, or annually. If your GST turnover is less than $75,000, then you voluntarily register and log in to the BAS by 31 October.
4. Finances and business plans
The end of a financial year is an optimal time to prepare and set goals for the business. Analyze all the data, set priorities, create business strategies, and implement changes required for the success of the future financial plan.
See if you have met all your aims for the current financial year and then strategize according to the new goals to be achieved.
5. Insurance and business structure
The end of a financial year in Australia is also a good time to think about business insurance and structure.
If, over the year, there have been tough times or not-so-optimal conditions your business has faced, then, of course, you need to renew the insurance plan.
You might also want to consider expanding the business growth or making changes in the structure for better tax compliance and profit making.
Volopay- an all-in-one solution to manage your business expenses
The end of a financial year can be hectic and complex. However, if you keep all your data and accounting sorted and organized from the start of the year, it won’t be that difficult.
An even better solution is to automate your business financial management to cut off all the grunt work and invest time in planning and analysis. The best option for financial management automation is Volopay!
Volopay is an all-in-one expense management software that provides all features, from basic expense-making features to advanced management features of corporate cards and accounting automation systems.