Closing your business? What you need to know

If you decide to close your business, don’t throw out all your records just yet. Record keeping rules still apply when you sell or close your business.

You need to keep your records for 5 years after:

• the records are prepared
• obtained
• the transactions are completed (whichever circumstance is the latest).

You also need to be mindful of which records you need to keep longer than 5 years.

While you’re closing everything down, you’ll need records to help you finalise your:

• tax obligations – for example, preparing final accounts, lodging all outstanding business activity statements and income tax returns
• super guarantee obligations – such as finalising super payments and quarterly lodgments
• Single Touch Payroll data or lodging a payment summary annual report (for payments you don’t report through STP).

If you've let your employees go, you don’t need to wait until the end of financial year to finalise your STP data. Finalising is an important step, as it allows your employees to lodge their income tax return at the end of the year.

It’s important to remember you may have GST and capital gains tax implications when you dispose of capital assets related to your business. Cancelling your GST registration may affect some - but not all - of your other registrations such as fuel tax credits, luxury car tax and wine equalisation tax.

If you’re closing your business and aren’t still engaged in activities required to terminate it, you’ll need to cancel your:

• GST registration within 21 days of stopping your business activities
• ABN registration within 28 days of stopping your business activities.

You can contact the ATO for further information or seek professional help and advice from our tax professionals to discuss options tailored to your circumstances.

Source: ATO Newsroom