Are you considering winding down your business? There are many reasons that business owners may decide to exit their business, but in every case there are tax and superannuation considerations that should be taken into account.
It pays to be aware of the regulations that surround moving on from a business so that you can plan accordingly and take steps to improve your final financial position. Another advantage is that you can leave your business feeling confident that you have met all of your compliance responsibilities and completed all of the necessary administrative tasks.
Here are a few of the important tasks that need to be completed when you exit a business:
Lodging your final BAS
Completing your final BAS can be a difficult task. Where a business has been sold, as opposed to wound up, the final sale price may be subject to GST.
De-registering your roles
You should only de-register your rolls with the ATO once the business has been sold, final payments have been made to employees, contractors and suppliers, and your final BAS has been lodged and paid. For most businesses, de-registering your roles will involve cancelling GST registration, PAYG and the ABN. It is important to note that if you pay any expenses post de-registering then you will be unable to claim the relevant GST.
Ensure that any insurance policies that you have remain active until your final day of operation. Cancelling your insurance too soon is extremely risky.
Paying out staff entitlements
Upon the closure of your business, you will need to pay out any annual leave that your employees have accrued. Businesses may also need to pay out eligible employees for long service entitlements. Furthermore, you will have to pay your superannuation guarantees for the final quarter that you have been in operation.
Business owners who are selling because they are planning on retiring, or who are nearing retirement age, have a number of generous capital gains tax (CGT) concessions available to them. These concessions may rely upon the proceeds going directly to an eligible superannuation fund. As such, it is advisable to seek advice from your accountant in regards to strategic timing and maximising your concessional and/or non-concessional superannuations caps.
Lodging your final tax return
No matter what time of year you choose to close your business, you will still need to lodge a tax return come June 30.
Closing a business can be an emotionally taxing time, without the added stress of paperwork and answering to the ATO. Our team is here to help you handle this stressful period, and are more than happy to discuss your options with you.
Call (02) 4926 2300 or email us.
Our accountants are here to help with any questions you may have in relation to winding down your business and what you need to do. Call the expert team at Leenane Templeton to discuss your business further.