While you focus on the day-to-day operations of your business, it’s easy to overlook the importance of strategic tax planning for the end of the financial year.

That’s where our tax planning services can help!

Our strategic tax planning not only minimises your tax bill, it brings peace of mind.  Knowing your likely tax position is certainly better than being ‘surprised’ with a tax bill a month away from its due date, together with unexpected adjustments to your ongoing income tax instalments. Good tax planning will keep money in your business for as long as possible, allowing you to operate with confidence! 

Our tax planning will firstly look to project your likely profit position and corresponding tax position.  We will then recommend specific strategies to minimise your tax. Here is a quick summary of some of the strategies we will consider implementing to achieve the best possible outcome:

1. Pre-pay expenses

Small business entities can prepay business expenses and bring forward tax deductions to the current year, subsequently reducing the amount of tax payable. Examples of common items suitable for pre-paying are interest on business or investment loans, rent, leases, stationery and insurance. This needs to be a well thought out decision, as it has cashflow implications and an impact on future tax.  Deferring may not always be the right choice!

2. Using all of your superannuation cap

If maximising your superannuation is part of your retirement plan, then don’t forget to contribute as much as you can into your super fund. We can guide you as to how much you can contribute tax effectively.  With the introduction of carry-forward unused concessional contributions, it might be more than you think.

We recommend you seek Financial Advice from a qualified financial planner before making a contribution.

3. Pay your employee’s super early!

Superannuation contributions for employees are not legally due until 28 days after the end of the quarter. For most employers, the final quarter’s superannuation is not payable until July the following financial year. Superannuation is only deductible once paid, so NOT paying your super early could defer your deduction into the next financial year – a missed opportunity.  To bring forward the tax deduction, consider prepaying your super prior to 30 June – keeping in mind the super needs to be received by the Fund prior to that date. Don’t leave it too late!

4. Review your Debtors

In most instances, income tax is payable on any invoices you’ve issued, even if you haven’t been paid. Don’t pay tax on any invoice you know won’t ever get paid. Review the list of those who owe you money and write off those ‘bad debts’ now.

5. Review your Stock

The value of your closing stock directly affects your business profit, the higher your stock value the higher your profit and tax. Review and identify any obsolete or old stock and scrap it or re-value it to its correct value. Individual items of stock can be valued at the lower of cost, market value, or replacement value.

6. Maximising Depreciation

There are some great concessions for small business which will allow for the immediate write-off of most assets installed and ready for use in business.  This presents a big opportunity to invest now and get the tax benefit immediately.  We will work through these investment decisions with you and make sure they are the right ones for you and your business.

7. Defer Income

If your cashflow allows, you may consider deferring some of your invoices until after the end of the financial year.  If the income was not invoiced this financial year, it can’t be taxed this financial year. This decision will have an impact on your cashflow and future income tax, so needs to be carefully considered.  It is not always the right decision!