As you may have heard being discussed recently in the media, there are a few things that small businesses may like to think about doing to potentially maximise tax planning opportunities. We’ve listed four things that you may like to consider for your business as we draw closer to June 30th.
NOTE: We are not tax experts and you should seek advice from your accountant or advisers.
The $20,000 Instant Asset Write-Off for Small Businesses
If your business is in need of a high ticket item such as a car, computer, business equipment etc., now is the time to buy! Eligible small businesses (ie with aggregated turnover up to $10 million) can get an instant tax deduction for plant and equipment purchased for the business where the item costs less than $20,000 (excluding GST). So if you’re eligible and have been considering purchasing a high ticket item, now is the time to buy, plus it also means you can take advantage of some of the great EOFY sales.
Prepay or Bring Forward Your Expenses
It’s a good time to review all your current costs and see if you can bring forward any expenses to June (where possible). For example, stock up on your stationery and office consumables, or look at prepaying your insurance and interest (if applicable). By bringing these expenses forward to June, you are obtaining a tax deduction in the current financial year which may reduce your overall tax bill for the 2018 financial year.
At Rewardle, we have a current offer to bring forward annual costs so you can claim a full deduction upfront and get a double benefit. You can save $50 (that’s one month free) if you pay annually for your Rewardle subscription, just get in before June 30th!
Review Trade Debtors
Quickly review your trade debtors, the customers who haven’t yet paid you for your goods or services. If you determine that some of these debts are uncollectible, you can write them off prior to June 30th and claim a tax deduction for the write-off this financial year.
The June quarter superannuation guarantee liability is required to be paid on behalf of all employees by August 28th. But you can only claim a tax deduction for employees’ superannuation when it is actually paid. In order to make sure you get the deduction for your 2018 financial year, you need to pay your employees’ June superannuation guarantee liability prior to June 30th.
So, while tax time can be a headache for some, it can also be a great opportunity to lock in some savings and set yourself up for the upcoming financial year. Think about it just like a holiday. Before leaving for a getaway, don’t you find yourself getting on top of all your work and chores? From ensuring your email inbox is up to date, all your bills have been paid and that any outstanding laundry is done. Well why not take this approach when stepping into the 2018/19 Financial Year. Getting organised now may mean your business is fresh and ready for the coming year.
Please note this is only a guide, be sure to conduct your own research.