I know that many of you will groan at the very mention of the dreaded 30 June deadline but as an accountant and business advisor, nothing frustrates me more than not being able to achieve the very best tax outcome for a client. The tax landscape is constantly changing with new rules regularly being introduced or amended. For me, end of year tax planning is one of the most important services that we offer our clients.
Obviously there are numerous strategies that you can put in place depending on your circumstances and the type and structure of your business but the most important thing to remember is that to ensure you give yourself the best opportunity to legally reduce your tax bill you need to start working towards it now!
What’s more, there seems to be a common misconception that only larger businesses can benefit from tax planning. In fact, some of the most significant benefits I have been able to help achieve have been for small and medium sized business clients.
Some of the more common strategies that can be implemented if you consult with an accountant before June 30th include:
- deferring income
- prepayment of expenses
- taking advantage of small business tax incentives
- writing off bad debt
- securing superannuation deductions
- selling obsolete stock
The key to getting the best tax outcome though is certainly early planning – the earlier the better!
Another common misconception is that tax planning is all about minimising your tax bill. However, there are other significant benefits to be gained from sitting down with a good accountant before the end of the year.
For me, getting a bird’s eye view of your tax position also enables you to make informed strategic decisions and future proof your financial position. Put simply by understanding your future tax obligations, you can manage your cash flow far more effectively and this is the lifeblood of your business! Tax can be one of the biggest outflows of cash for businesses every year and yet most business owners don’t prepare for it!
Consulting with your accountant now can pay dividends for that 30 June deadline. Undertaking a tax review now ensures that you:
- are able to take advantage of all of the available allowances, deductions, exclusions and exemptions
- avoid any unpleasant and often expensive surprises
- obtain an 18 month schedule of estimated taxation payable
- have the option to vary your pay as you go instalments (PAYGI) immediately rather than waiting until you lodge your tax return potentially easing your cash flow.