As the dust settles from last week’s budget announcements, smart business owners will be looking at tax planning opportunities for the upcoming end of financial year.
Scheduling in a tax planning catch-up well in advance of June 30 will provide the time necessary for implementing any actions that can make the most of business and tax minimisation opportunities. It will also help you to manage expenses and cashflow, and of course, expose any nasty surprises that could result in paying more tax than necessary.
If you haven’t taken advantage of tax planning in previous years, we highly recommend doing so. This is because, in our experience, getting advice early almost always yields benefits including considerable tax savings and efficiencies that directly support not only a healthy business cashflow but your own personal prosperity.
Moreover, tax planning should be considered a prudent business practice for addressing strategic tax matters outside of basic compliance, including asset management, depreciation, lending, super contributions, stock levels and the various tax deductions available to your business.
Pay less tax
Among the key reasons we advocate for tax planning each year is of course to avoid paying more tax than you should. This year, the Federal Budget added additional tax saving avenues for business owners including a 20% tax deduction for investment in digital technology, cyber security and employee skills and training. As expected, temporary full expensing has been extended to 30 June 2023.
Taking these provisions into account, business owners might also consider the benefits of prepaying or holding over some expenses to achieve the most tax effective outcomes. For individuals, increasing super contributions or prepaying interest on investment properties can also be tax effective strategies.
Defer without snowballing
Deferring income or a bonus into the next financial year can be wise option. However, it takes planning to make sure this is first of all possible for you and secondly, isn’t likely to create further headaches for next year.
Any accountant worth their salt can get your tax bill down – but if all it means is snowballing expenses for next financial year, it can’t be considered a net positive.
Timing is everything
Cashflow timing will be important for businesses managing PAYG obligations, so we invite you to lean on our expertise. Changes to superannuation provisions (SG increases to 10.5% from 1 July) may also mean additional costs and complexity for some businesses, which can be addressed as part of your tax planning strategy.
As previously mentioned, we’re strong advocates for tax planning as it almost always provides benefits that would be otherwise forfeited once the calendar ticks over to 1 July. Visit our Tax Planning page to find out more or get in touch today to make an appointment.
If you need advice about this or any of the other topics we write about, please contact us on (07) 5438 8088 or email email@example.com.
Core Business Accountants specialise in business advice for growing and mature family-owned and small and medium-sized businesses.