When was the last time you assessed your overall financial position and explored ways to reduce your tax liability? In the lead up to the end of the financial year these straightforward strategies can help you lighten the tax load on your business.
Deduct business expenses
Review your business transaction account and ensure you’re making all the expense deductions you’re entitled to, including expenses paid for with petty cash.
To easily keep track of all your tax deductions, simply log in to NetBankand use the MySpend feature to flag tax-related income and expenses, including individual super payments. You can categorise and consolidate these transactions in one ‘Tax View’ that can then be exported into a report.
Upgrade your vehicles and equipment
The end of a financial year is a great time to consider your car and equipment needs. With dealers and suppliers often looking to clear stock at this time of year, there is a good chance you can pick up a great deal on equipment or vehicles you may need. Also, take advantage of the instant write-off for equipment purchases of up to $20k from the Federal Budget, which is set to expire on 30 June 2017. Get a quote in less than 60 seconds online to see what the costs would be to upgrade your business vehicle or equipment.
Defer your receivables
In the recent Federal Budget the government announced the small business tax rate would be lowered to 27.5 per cent. If you have a healthy cash flow position leading up to June 30, a savvy move could be to send your invoices out later in the month. Not only could your taxable income for this financial year be reduced if customers pay you after July 1, but all income deferred to next year will be taxed at the new, lower rate. Log on to NetBank to view your real-time account balance and assess if this is a valid option for your business.
Do a stocktake
Conducting a stocktake before tax time can help in two ways. Firstly, it offers an opportunity to identify and write off any damaged stock. Additionally, it will draw attention to any old or hard-to-move stock that you may want to sell off at a discounted rate. If you sell stock at a loss before June 30 your taxable income will be reduced.
If you’re not sure where to start, it is worth engaging the services of a tax accountant who can offer advice and help you navigate your way through year end tasks and opportunities.