The end of the financial year is a great time of year to set review your tax position and begin planning for the year to come.
There are health and hygiene decisions that every business should review on an annual basis so that it is in the best position tax-wise and effective tax strategies must be done at the right time.
There are some basic housekeeping requirements at this time of year, because there is no accounting magic in cash movements, physical or legal arrangements that make up your tax return.
Writing off damaged or obsolete stock;
Writing off bad debts;
- Scrapping any out-of-date or obsolete plant and writing of off your asset register;
Making loan repayments to satisfy Division 7A loan agreement;
Finalising any inter-entity management charges;
Review your deductions; and
Take advantage of timing benefits and permanent savings.
These actions need to be undertaken before 30 June 2013 and your accounts need to be updated to reflect that they were completed before that date.
Effective business tax planning means making the most of the opportunity to time your savings (link), do your housekeeping (link) and decide whether to bring forward some of your expenditure. Bringing forward your expenditure is contingent your cash flow, but there are timing benefits worth exploring, such as:
Taking advantage of the opportunity to prepay some expenses
- Take action on bad debts and impairment within your inventory
Make decisions and elections for your trust and complying with Division 7a
Paying liabilities that are only deductable in the year you pay for them
Bringing forward costs if you have cash flow to do so.
Buying cars or taking advantage of the immediate $6500 instant asset write off
EOFY is an opportunity to clear the decks for a new financial year. Getting advice before EOFY is important for planning you tax and ensuring that not only is your business is in order, but you're also making sure that your cash flow is in good shape and that you're taking advantage of the tax breaks you're eligible for.
Give Bates Cosgrave a call on 02 9957 4033 to discuss your EOFY needs.
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Last updated June 2013. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.