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End of Year Legal Checklist

By Natalie Lenwood and Sanjana Malewar

With the end of the year fast approaching, it is important to ensure that your estate planning and personal affairs are in order. Additionally, if you are the owner of a small business, there are several essential tasks which need to be completed each year. Use the following checklist to ensure you have attended to all the necessary requirements, so you can enjoy the festive season and New Year period with your friends and family, knowing you are prepared for the coming year.

Individuals

1. Review your Will:

Updating and regularly reviewing your Will is an important to ensure that your loved ones are taken care of, and your estate is best prepared, in the unfortunate event of your passing. It is imperative to consider if there have been any changes in relationships with your executors, beneficiaries, trustees, and guardians. Additionally, consider if your assets had changed significantly, as you may need to alter your Will to reflect such changes.

2. Review your Powers of Attorney:

An Enduring Powers of Attorney enables you to appoint one, or more persons to make important financial or medical decisions on your behalf. As this year comes to an end, it is important to consider that may be a day where you are no longer able to take adequate care of your own affairs, by way of accident, illness or old age. As such, it is essential to periodically review your choice of attorney.

3. Review your funeral and end of life arrangements:

Reviewing your funeral and end-of-life planning is an opportunity to make and update arrangements that will ultimately reflect your wishes, as well as making it easier for your family and friends during the difficult time.

4. Review your health insurances:

Health insurance is an essential way to ensure financial assistance at the time of a medical emergency. As health insurance is a yearly renewable contract, it is important to review your plan to ensure your health insurance caters to your changing health requirements and needs. Additionally, at the end of the year, health insurance prices often change, and deductibles reset. As such, re-assessing your health insurance options at the conclusion of the year can often save you money.

5. Carefully check home, contents, motor vehicle and life insurances

Similarly, the end of the year is a good time to ensure that your current home, contents, motor vehicle and life insurance are the most suitable for your changing personal and economic needs.

6. Go through your personal tax filings to make sure that these are up to date

Despite only being halfway through the financial year, it is important to use this time to ensure that all personal tax fillings are up to date and all expenses have been recorded thus far.

7. Check debts and mortgage contracts

Finally, it’s important to give consideration to any debt or mortgage contracts you may be party to, and ensure you are familiar with any terms and clauses contained therein.

Businesses

1. Ensure your ATO tax filings up to date

Ensure you have completed the following ATO filings for the previous financial year and update as many as you in preparation for the upcoming end of financial year in 2023:

Profit and loss statement: A summary of your business’s income and expenses;

Income tax return: Atax return needs to be lodged if you carried on a business, even if your business didn’t earn any income. The information you need to report and how you lodge your annual tax return for your business, will differ depending on your type of business entity.

This includes reporting income, deductions, stock and assets, and personal services income. You can also begin calculating depreciation expense claims andany capital gains tax which you may have to pay. Ensure to gather records of any asset purchases or expenditure on improvements.

Yearly business activity reports or returns for different tax types: 

pay as you go (PAYG) withholding – this includes finalising income statements for Single Touch Payroll – This needs to be completed if your business withheld payments from employees, non-residents, foreign residents or other business that did not quote an ABN

fringe benefits tax (FBT)– The fringe benefits tax (FBT) year runs from 1 April to 31 March and must be paid for the year by 21^st of May or 25^th of June if you have a tax agent that lodges your FBT return

goods and services tax (GST) – If you are eligible to lodge an annual GST return, you must lodge and pay any amounts owing by the same date your income tax return is due to be lodged. If no income tax return needs to be lodged, the due date will be 28^th of February following the end of the annual tax period. Check your eligibility on the ATO website

2. Settle your business’s accounts:

This includes following up any unpaid invoices from your debtors and paying any outstanding invoices of your creditors. Ensure you have a good record keeping system to track your accounts and keep summaries of your record of debtors and creditors.

3. Check your ASIC filings, trademark and business registrations:

Depending on the type of company you operate, you may have to lodge an ASIC financial report.

Check the ASIC website to see if your trade mark and business registrations are still valid. In Australia, trade mark registration lasts for ten years and business names can be renewed for up to one or three years.

4. Check your commercial leases and ensure any options to renew leases are carefully diarised:

Keep in mind the landlordmust notify the tenant in writing if there any changes to the options relating to the date which the option is to be exercised by, to the rent payable, or the availability of early rent review or a cooling off period. This must be communicated no later than three months before the date that the option is no longer valid.

5. Review your insurances for premises, motor vehicles and equipment:

Ensure to read the product disclosure statements (PDS) of your insurance policies to check what circumstances you are covered in. Consider upgrading your level of cover if your circumstances have changed.

6. Review all leasing and financing arrangements:

Financing arrangements refer to the funding agreements between your company and third parties and defining the terms and conditions of the funds borrowed by your company. For example, loans, mortgages, lines of credit and security deposits are all financial arrangements. Reviewing these arrangements regularly will reduce risk of litigations as transactions should all be documented and compliance with terms and conditions should be ensured. 

7. Review employment contracts, contractor agreements and WorkCover estimates and payments:

Be mindful of the recent requirements outlined in the Fair Work Amendment Bill, which apply to casual employment contracts. If you operate a large business (with more than 15 employees), you have an obligation to offer permanent employment to casual employees who have been employed for 12 months or more, and have worked a regular pattern of hours on an ongoing basis for at least the last 6 months of that period. However, there will be no obligation for you to offer casual conversion if there are reasonable business grounds not to do so. For small business, your casual employees are still entitled to request casual conversion, even if there is no obligation.

Generally, you must register for WorkCover insurance if you or your company employs any workers in Victoria. Use the WorkSafe website to calculate how much your WorkCover insurance premium will cost for the following year.

Legal firms may be able to review and advise contractors in respect to their rights and obligations regarding contractor agreements.

8. Review payroll tax estimates and processes:

You need to register for payroll tax if the total Australian wages you pay are more than the threshold, which as of July 2021 is $58,333 monthly or $700,000 yearly in Victoria.

It is important to review your payroll process so it is accurate, updated, properly documented and reflective of the most recent awards and enterprise agreements.

9. Ensure your employees’ superannuation is paid and up to date:

The current rate 10.5% of gross salaries increasing to 11% in July 2023, which must be paid at least every three months. The rate is set to increase 0.5% every financial year until it reaches 12% in 2025.

10. Check and update your cyber security arrangements: 

With the increasing threat of cybercrime, it is more important than ever to ensure your cyber security arrangements are strong and up to date. Use the Australian Government’s online Cyber Security Assessment Tool to help you identify your business’ cyber security strengths and areas where your business can improve.

11. Review your marketing plans and your business structure:

As your business grows and expands, you may find a different business structure is more appropriate to suit your business’s needs. Be aware that different compliance and taxation regulations may apply, if you restructure your business.