30 June is fast approaching!
With that in mind, now is the opportune time to plan for the 2018 Tax Year, so that you are not taken by surprise.
Some areas of your business that you should consider to ensure you achieve the best tax outcomes are explained below.
Superannuation is a great place to start. If you have employees, endeavour to pay their superannuation guarantee before 30 June so that you receive a tax deduction in this financial year.
Following recent legislative changes, anyone can contribute into superannuation a total of $25,000 (including any superannuation guarantee paid by your employer already) for the 2018 financial year and claim a tax deduction. This is the first year this has been easily accessible by Salary & Wage earners.
A full review of your debtors is advisable to ensure that any uncollectable amounts are written off as bad debts.
Ensure that all creditors have been accounted for at 30 June to maximise tax deductions.
If your business has inventory, then stock levels should be reviewed at 30 June. It should be noted that there are various methods available to value stock. If you have obsolete or damaged stock, lower values can be used for these items which may provide some tax relief.
As a small business with a turnover of under $10M there are various areas that you may wish to take advantage of including prepaying expenses for the next financial year so that you receive a deduction in the current year. You may be able to claim an immediate deduction for assets costing less than $20,000 if you are using small business depreciation pools.
The company tax rate for businesses with an aggregated turnover under $25M has now been reduced to 27.5% for the 2018 financial year. This new threshold may give rise to an opportunity for some companies to vary their June 2018 quarter company tax instalment, as previously lodged quarters will have been calculated based on a rate of 30%.
If you are planning to sell any investments or capital assets which may result in a capital gain, we would recommend that you discuss these potential transactions with your accountant prior to signing any contracts as this may impact your tax outcome for the current year.
Whilst tax is one consideration at this time of year, you may also wish to review other areas of your business, such as:
- Current business structure,
- Current accounting and other add-on software,
- Reviewing business/personal insurances, and
- Estate/Succession Planning.
Our team at Halpin Partners are highly skilled to assist you with your Tax Planning needs and will review all of the above areas with you to ensure you have the best strategy for yourself and your business, as we approach the end of another Financial Year.