The end of the financial year is an important date for businesses and people in Australia. The financial year does not end on December 31 like the calendar year. Instead, it ends on June 30 each year.
When is the 2023 Financial Year Finish Date?
The end of the 2023 financial year in Australia is June 30, 2023. This means the 2023 financial year runs from July 1, 2022 to June 30, 2023.
The end date is always June 30 every year. The 2024 financial year will end on June 30, 2024. And the 2025 financial year will finish on June 30, 2025.
Why is the Financial Year Different than the Calendar Year?
Most countries end their financial year on December 31 along with the calendar year. But Australia's financial year ends on June 30. There are historical reasons for this.
Originally, Australia adopted the June 30 financial year end to match up with Britain. Back when Australia was a British colony, it used the same financial calendar as the United Kingdom. And Britain's financial year ended on June 30.
Even after becoming an independent nation, Australia kept the June 30 financial year end date. The different financial year has stayed in place ever since.
Who Needs To Get Ready for End of Financial Year?
Both businesses and people need to prepare for the end of the financial year in Australia. Here is what businesses and people need to do:
Businesses
- Finish profit and loss statements
- Review accounts receivable and payable
- Pay unpaid bills
- Close accounting books
- Update stock counts
- Review and update budgets
- Submit BAS/GST filings
- Prepare employee PAYG summaries
- Pay superannuation entitlements
- Write off bad debts
- Update depreciation schedule
- Check for taxes or charges owed
Individuals
- Collect payment summaries from employers, banks, etc.
- Review income and expenses for the year
- Keep receipts for deductions and expenses
- Calculate capital gains/losses from asset sales
- Submit tax return and assessment
- Pay any outstanding taxes
- Contribute maximally to super by June 30 deadline
- Review insurance policies like life, income, TPD
End of Year Checklist for Businesses
Businesses should use an end of financial year checklist to make sure they complete all needed tasks. Here are some key end of year tasks:
Finalize Financial Statements
Finish your profit and loss statement for the full financial year. This outlines your revenue, expenses, and profit or loss.
Close out your balance sheet, which lists assets, liabilities, and equity. Make sure your books are up to date and accurate.
Pay Outstanding Bills
Pay any overdue or outstanding invoices and bills before the June 30 deadline. This reduces accounts payable.
Settle expenses with suppliers and vendors. Try to negotiate deals to pay early at a discount.
Review Accounts
Look over accounts receivable to see what clients owe you money. Send payment reminders and try to collect before end of year.
Write off any bad debts that are clearly unrecoverable. This cleans up your balance sheet.
Update Company Finances
Review budgets and spending from this financial year. Update budgets for the 2023-2024 year.
Take stock of inventory and update stocktake counts in your records. Make sure values are accurate.
Manage Tax Tasks
File your Business Activity Statement (BAS) and pay any owed GST before the deadline.
Organize payment summaries for employees and submit to the ATO. Stay on top of superannuation.
Check for Taxes and Charges
Pay any taxes, duties, levies or charges so you don't carry them into the next year.
Look for deductions you can claim like instant asset write-offs.
End of Year Checklist for Individuals
People should also complete an end of financial year checklist to maximize returns. Here are key tasks:
Collect Payment Summaries
Gather summaries of earnings from your employers, banks, government agencies, etc. These summarize the income paid to you.
Review Income and Expenses
Tally up all sources of income earned during the financial year from July 1 to June 30.
Also total up expenses, deductions, and offsets like charitable donations. Keep receipts as proof.
Submit Your Tax Return
Fill out your tax return informing the ATO of your income and tax status.
You can submit online using myTax or through a registered tax agent.
Pay Outstanding Tax
Pay any remaining tax owed by the deadline to avoid late fees. An accountant can help calculate tax owed.
You may get a refund if you overpaid taxes during the year. The ATO will process refunds after your return is filed.
Maximise Super Contributions
Make sure to contribute up to the cap to your superannuation fund before June 30.
The annual concessional contributions cap is $27,500. Use super to reduce taxable income.
Review Insurance
Assess your insurance policies before end of financial year. Check if you have adequate life, income, and total permanent disability (TPD) cover.
Update beneficiaries and policy details as needed. Shop for better premiums and coverage.
End of Financial Year Sales
Many retailers have end of financial year sales starting in May. These are like Boxing Day sales held just before June 30.
End of year sales offer big discounts on:
- Clothes and fashion up to 70% off
- Furniture and homewares
- Electronics and appliances
- Cars and vehicles
- Department store clearance sales
It's a good time to buy discounted items. And businesses can get deals on equipment for upgrades and write-offs.
Changes Coming in 2023 Financial Year
The government has announced several policy changes that take effect in the 2023 financial year starting July 1:
- Tax relief - There will be an adjustment in tax brackets providing relief for middle income earners.
- Super rate rise - The superannuation guarantee percentage will increase from 10% to 10.5% of salary.
- FBT and payroll changes - Reforms to fringe benefits tax and payroll reporting.
- Asset write-off thresholds - The instant asset write-off limit will change.
- Patent box concessions - Tax concessions for income derived from patents will be introduced.
Conclusion
The 2023 financial year in Australia ends on June 30, 2023. The key tasks for businesses include finalizing accounting records, managing taxes, paying bills, and updating finances.
Individuals need to collect payment summaries, submit tax returns, maximize super contributions, and review insurance.
June also brings end of financial year sales. And the new 2023-2024 financial year starting July 1 will kick off several tax and policy changes.
Now you know exactly when the end of financial year deadline is and what you need to do to prepare!
Frequently Asked Questions
What day of the week is the end of financial year 2023?
The end of financial year 2023 falls on Friday, June 30, 2023.
When should I submit my 2022-2023 tax return?
You should aim to submit your 2022-2023 tax return to the ATO as early as possible, ideally by October 31, 2023. This ensures you receive any tax refund quickly and avoid late fines.
What happens if I miss the June 30 deadline?
If you miss end of financial year deadlines for taxes, super contributions, etc. you may face fines, interest charges, or other penalties from the ATO or your super fund. So make sure to meet cut-offs.
How long do I have to keep financial records each year?
You must keep financial records for five years from the tax return due date. For the 2022-2023 records, you should retain them until at least June 30, 2028.
Where can I learn more about the upcoming 2023 financial year tax changes?
The Australian Government budget site outlines expected tax changes in detail. You can also consult reputable accounting and tax resources like CPA Australia and the ATO for guidance.
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