The end of the financial year is rapidly approaching and it is the perfect time for small businesses to undertake tax planning for the current and next financial year.
Here are some items to consider in your yearly tax planning.
Your current tax position based on current profit and loss
It’s never a bad time to take stock of your current position! Many businesses can get stuck working in their business and not taking the time to step back and look at it critically. By examining where your major expenditure is, how sales are tracking and what impact the current economic times are having on your business, you can get a bigger picture idea of how business is going.
You should make sure you are on top of your obligations that need to be paid by the EOFY including super contributions, any repayments of loans and dividends/trust distributions if applicable. We can help you with identifying any of these upcoming obligations during tax planning, particularly if your business has grown significantly during the year.
Look at strategies to minimise any tax payable
There are often several tax incentives or bonuses you can take advantage of before the current financial year ends, which might be advantageous to your business.
These incentives can change each year based on policies offered to businesses. This could include government schemes that offer rebates for certain asset or technological purchases.
Some effective ways to minimise tax payable might be bringing forward the purchase of plant and equipment or prepaying expenses before the end of the year, if this applicable to your situation.
We are well versed in current incentives on offer and can help you with finding those that will best work for your business through tax planning.
Checking you are putting enough tax aside
As your business grows and changes, so can your tax obligations. This is a good time to examine how much tax you are setting aside each month or quarter and if it is enough to cover all your tax obligations.
Depending on your situation, this could include goods and services tax, income tax, payroll tax and fringe benefits tax. There may be other financial obligations including superannuation to employees.
It is important to make sure you can cover these taxes so you aren’t caught short by the Australian Taxation Office and face penalties.
Reviewing your business structure
It’s important to check periodically to see if your business structure still suits your business and/or family situation.
Over time your business structure may need to change so that it is best serving your needs. We see business growth or changes to families (ie babies born) being a trigger point for a business reviewing their structure.
Our start up business document contains information about different entity structures which might be helpful to review! If a change would be beneficial we can guide you through this process.
At Ultimate Tax we want to see your business succeed! We know as a small business ourselves how beneficial yearly planning is to look critically at your business. We are here to help you examine your current position, find strategies to minimise tax and put enough tax aside. We’ll also discuss many other ways to plan out your year to see you succeed, with the above being just some of the items we’ll discuss in depth.
Our Managing Director Bobby is available to meet with you about tax planning, with sessions currently open to book. You can contact the office via office@ultimate-tax.com.au or call 6144 3370 to book in.
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