The 2022/23 financial year starts on 1 July.
It’s important that you’re aware of the key timescales around the end of the financial year, in particular the deadlines around submitting your tax return.
Read about the steps you should take when you’re completing your return, and to find out how making contributions to your super fund can help reduce your future tax bill.
Completing your 2021/22 tax return
If you had any taxable income in the 2021/22 tax year you need to submit a tax return. The deadline for submitting this is 31 October 2022. This deadline can potentially be extended if you use a tax agent to complete your return.
This also applies if you’re a sole trader or self-employed. In these instances, you’ll need to provide a separate business schedule outlining your business income and expenses alongside your tax return itself.
The quickest and most straightforward way to submit your return is via the myTax system run by the Australian Tax Office (ATO).
Be aware that, if you’re British and reside in Australia for tax purposes, you have to declare all the income you earned both in Australia and internationally on your Australian tax return.
Business tax returns are also due on 31 October
If you’re a business owner, you’ll need to complete a tax return and submit it to the ATO by the end of October, as well as starting to plan ahead for the coming financial year.
When you’re completing your return, don’t forget to make the most of the tax deductions that are available through claiming for business expenses.
These can include:
- Travel expenses
- The cost of tools and machinery
- Fuel costs
- The cost of working at home if you run your business there.
It’s also worth checking to see if there are any tax concessions you may be eligible for. These are normally based on your business turnover and are assessed under different criteria including:
- Business deductions
- Capital Gains Tax (CGT)
- Superannuation.
Some of the available deductions can be complex, and we’d always recommend you speak to a tax expert about this.
Give your super fund a boost in the new financial year
Saving for your retirement should always be one of your key financial priorities.
Various rules around super contributions mean that making contributions can be highly tax-efficient as well as increasing the value of your fund.
Here are four ways you could benefit.
1. You could save tax with a contribution to your super fund
By making a one-off concessional contribution to your super, you could save up to 30% in tax.
Such a contribution, in the 2022/23 financial year, will be taxed at the concessional rate for super funds of 15%, instead of at your marginal tax rate, which could be up to 45%.
So not only will you reduce your tax bill, but you’ll also have given your super fund a handy boost.
Be aware of the “concessional contribution cap”, which is $27,500 in 2022/23 tax year. Penalties apply if you exceed this cap, and it includes any contributions made by your employer.
If you didn’t maximise your tax-efficient concessional limit in the financial year that’s just ended, you can carry forward any unused concessional contributions from that year subject to your total super balance being under $500,000.
2. Boost your super fund with a non-concessional contribution
As well as concessional contributions, you can also give your super fund a big boost by making a voluntary non-concessional contribution (NCC) in the new tax year.
The NCC cap is four times the concessional cap – so $110,000 in the 2022/23 tax year.
As these contributions are made from your after-tax income they are not taxed once received by your super fund.
3. Make a tax-efficient super contribution for your spouse
As well as contributing to your own super fund, you could also take the opportunity to boost the super fund of your spouse, especially if they are only on a low income, or not working at all.
In the 2022/23 tax year you can claim a tax-offset of 18% on super contributions of up to $3,000 that you make on behalf of your spouse.
So, as well as boosting their fund, you can reduce your tax bill and help equalise your respective retirement incomes.
4. Make use of the First Home Super Saver Scheme
If you’ve only recently moved to Australia or have been here for some time but have not yet purchased a residential property, you may want to consider making use of the First Home Super Saver Scheme (FHSSS).
The FHSSS scheme allows you to save money for your first home inside your super fund, helping you save faster with the concessional tax treatment of superannuation.
You and your spouse can make a personal super contribution up to a maximum of $15,000 per person per tax year, with a total limit increasing from $30,000to $50,000 from 1 July 2022. Contributions must be within existing contribution caps.
Get in touch
If you have any queries regarding your financial planning, please get in touch with us.
Please note
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of legislation in both Australia and the UK as at 1 June 2022 which is subject to change.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Your pension income could also be affected by the interest rates at the time you take your benefits. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
