As we navigate through the evolving landscape of taxation in Australia, it’s crucial to stay informed and proactive in managing your business’s tax affairs. In this newsletter, we will highlight key strategies and considerations for tax planning in 2024 that can benefit your business.
1. Utilising Small Business Tax Concessions
For eligible small businesses, there are various tax concessions available that can significantly reduce tax liabilities. These concessions include:
- Small Business Income Tax Offset: A tax offset of up to $1,000 for small businesses with turnover less than $5 million.
- Simplified Depreciation Rules: Instant asset write-off and accelerated depreciation for eligible assets. The Instant asset write-off threshold for the 2024 financial year is $20,000.
- Capital Gains Tax (CGT) Concessions: Small business CGT concessions can apply to reduce or eliminate CGT on certain assets.
2. Strategic Timing of Income and Expenses
Managing the timing of income and expenses can have a significant impact on your taxable income. Considerations include:
- Deferring income to future years or accelerating deductions to the current year to optimise taxable income.
- Utilising prepayments and other timing strategies to manage cash flow and tax outcomes.
3. Dividend Planning and Imputation Credits
Optimising dividend strategies can enhance tax efficiency for both companies and shareholders. You should consider:
- Franking dividends to utilise imputation credits and reduce shareholder tax liabilities.
- Assessing the impact of dividend imputation on your company’s overall tax position.
- Aligning dividend policies with your company’s financial objectives and shareholder expectations.
4. Superannuation
It’s advisable to ensure that your employees’ superannuation contributions are made before the 30th of June to qualify for a tax deduction in the current financial year. In general, individuals can contribute up to $27,500 to their superannuation for the 2024 financial year, including any contributions already made by their employer through the superannuation guarantee scheme, and claim a tax deduction, if eligible.
5. Take stock of your inventory
Another important task is to assess your inventory levels as of 30th June, particularly for businesses that deal with inventory. Various valuation methods are available for stock, allowing for adjustments in cases of obsolete or damaged items. Utilising lower values for such items can potentially offer significant tax relief.
6. Compliance and Risk Management
Staying compliant with tax laws and regulations is paramount to avoid penalties and scrutiny. It is important to ensure:
- Timely lodgement of tax returns, BAS, and other required documents.
- Proper record-keeping and documentation of transactions.
- Regular review of tax positions and risk management strategies.
7. Seeking Professional Advice
Navigating the complexities of tax planning requires expertise and tailored advice. Our team at Halpin Partners is here to assist you with:
- Strategic tax planning tailored to your business objectives.
- Compliance support to ensure adherence to tax laws and regulations.
- Maximising tax incentives and concessions for optimal tax outcomes.
In conclusion, proactive tax planning is essential for optimising your business’s financial position and minimising tax burdens. By leveraging available incentives, strategic timing, and expert guidance, you can achieve tax efficiency and support your business growth.
If you require assistance or have questions about any of the above, please reach out to your Client Manager on (07) 4052 0800.
Emma Bain,
Client Manager
