Cash flow planning for tax obligations

/Cash flow planning for tax obligations
Cash flow planning for tax obligations2015-05-01T10:23:30+00:00
Cash flow planning for tax obligations.


Small businesses often fail, not because of a lack of profit generating ability, but more so due to poor cash flow planning. Often, clients focus on cash flow planning around debtors and creditors (working capital) and major capital purchases. However, consideration must be given to cash flow planning around tax liabilities. This is particularly important given we are in an age where Directors are personally liable for unpaid Pay As You Go Withholding tax payments and unpaid superannuation guarantee charges.

Below is an outline of the general tax obligations that you may encounter over the span of a financial year, (depending on registration requirements and the size of your business). This list is not exhaustive, but a general indication of tax obligations for small to medium businesses in Western Australia. The dates listed below are lodgement and payment dates unless specified (these will vary year on year):

July

21 July: Payroll Tax for the month of June (Western Australian Payroll Tax);
21 July: Payroll Tax for the June quarter (Western Australian Payroll Tax);
21 July: Payroll Tax Annual Returns (Western Australian Payroll Tax);
21 July: Business Activity Statement for June (for GST and Pay As You Go and FBT Instalments);
21 July: Annual payroll Tax Reconciliation due for lodgement (Western Australian Payroll Tax);
28 July: June Quarter Business Activity Statement (for GST and Pay As You Go and FBT Instalments);
28 July: Superannuation Guarantee for April – June (must be paid by the cut-off date; late paid employee Superannuation contributions and Superannuation Guarantee Charges are not deductible!);

August

7 August: Payroll Tax for the month of July (Western Australian Payroll Tax);
21 August: Business Activity Statement for July (for GST and Pay As You Go and FBT Instalments);
25 August: June Quarter Business Activity Statement (for Tax and BAS Agents lodging electronically);

September

7 September: Payroll Tax for the month of August (Western Australian Payroll Tax);
21 September: Business Activity Statement for August (for GST and Pay As You Go and FBT Instalments);

October

7 October: Payroll Tax for the month of September (Western Australian Payroll Tax);
7 October: Payroll Tax for the September quarter (Western Australian Payroll Tax);
21 October: Business Activity Statement for September (for GST and Pay As You Go and FBT Instalments);
28 October: September Quarter Business Activity Statement (for GST and Pay As You Go and FBT Instalments);
28 October: Superannuation Guarantee for July – September (must be paid by the cut-off date; late paid employee Superannuation contributions and Superannuation Guarantee Charges are not deductible!);
31 October: Income Tax Returns for certain taxpayers – including those who do not use a tax agent or have outstanding tax returns from prior years. Note – payment of any tax liability is generally due 14 days from assessment;

November

7 November: Payroll Tax for the month of October (Western Australian Payroll Tax);
21 November: Business Activity Statement for October (for GST and Pay As You Go and FBT Instalments);
25 November: September Quarter Business Activity Statement (for Tax and BAS Agents lodging electronically);

December

1 December: Payment date of income tax for medium/large taxpayers, companies and superfunds (tax returns to be lodged 15 January);
7 December: Payroll Tax for the month of November (Western Australian Payroll Tax);
21 December: Business Activity Statement for November (for GST and Pay As You Go and FBT Instalments);

January

7 January: Payroll Tax for the month of December (Western Australian Payroll Tax);
7 January: Payroll Tax for the December quarter (Western Australian Payroll Tax);
15 January: Lodgement due date of income tax returns for medium/large taxpayers, companies and superfunds;
21 January: Business Activity Statement for December (for GST and Pay As You Go and FBT Instalments);
28 January: Superannuation Guarantee for October – December (must be paid by the cut-off date; late paid employee Superannuation contributions and Superannuation Guarantee Charges are not deductible!);

February

7 February: Payroll Tax for the month of January (Western Australian Payroll Tax);
21 February: Business Activity Statement for January (for GST and Pay As You Go and FBT Instalments);
28 February: December Quarter Business Activity Statement (for GST and Pay As You Go and FBT Instalments);
28 February: Income Tax Returns for certain taxpayers – including new entities (including payment of any tax liabilities for new companies or superannuation funds);

March

7 March: Payroll Tax for the month of February (Western Australian Payroll Tax);
21 March: Business Activity Statement for February (for GST and Pay As You Go and FBT Instalments);
31 March: Income Tax Returns for certain taxpayers – including companies and superannuation funds with income in excess of $2m for the prior year and for certain individuals and Trusts. Note – payment of any tax liability is generally due 14 days from assessment for individuals;

April

7 April: Payroll Tax for the month of March (Western Australian Payroll Tax);
7 April: Payroll Tax for the March quarter (Western Australian Payroll Tax);
21 April: Business Activity Statement for March (for GST and Pay As You Go and FBT Instalments);
28 April: March Quarter Business Activity Statement (for GST and Pay As You Go and FBT Instalments);
28 April: Superannuation Guarantee for January – March (must be paid by the cut-off date; late paid employee Superannuation contributions and Superannuation Guarantee Charges are not deductible!);

May

7 May: Payroll Tax for the month of April (Western Australian Payroll Tax);
15 May: Income Tax Returns for all other taxpayers. Note – payment of any tax liability is generally due 14 days from assessment for individuals or by 5 June;
21 May: Business Activity Statement for April (for GST and Pay As You Go and FBT Instalments);
21 May: Fringe Benefits Tax Returns due for lodgement and payment (if lodged via paper);
26 May: March Quarter Business Activity Statement (for Tax and BAS Agents lodging electronically);
28 May: Fringe Benefits Tax Returns due for lodgement and payment (if lodged electronically)

June

5 June: concessional lodgement date for individual income tax returns (provided payment also made)
7 June: Payroll Tax for the month of May (Western Australian Payroll Tax);
21 June: Business Activity Statement for May (for GST and Pay As You Go and FBT Instalments);
25 June: Fringe Benefits Tax Returns due for lodgement and payment (if lodged via tax agent, electronically)
30 June: Superannuation Guarantee for April – June (must be paid by this date to ensure tax deduction in the current financial year);

So where to from here:

– Speak to your tax agent to ensure that you know and understand your tax lodgement requirements, including annual income tax, monthly or quarterly Activity Statements etc. Also, if you have an internal accountant or office manager, ensure that they also understand these obligations;

– Include your monthly, quarterly or annual tax obligations in your budgets and/or cash flow statements and revisit these regularly;

– Consider maintaining a separate bank account for “tax liabilities”, i.e. as you make sales or pay salary to staff, contribute the GST or PAYG Withholding amount into this bank account and do not draw down on it… it’s for your tax obligations!;

– Ensure that you are meeting your Superannuation Guarantee obligations (quarterly cut-off dates) to avoid penalties and non-deductibility of payments;

Now… for the next two weeks, Tolerable Tax will be on hiatus as my wife and I welcome the new little addition to our family! When Tolerable Tax returns, I will be outlining tax planning options for 30 June 2015. So until then, may your tax be tolerable!

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