Opportunities

Write-off bad debts

Is it certain that your customer won’t pay you? In case all efforts to collect the debt have been unsuccessful, you can write off the debt by 30 June to claim a deduction for this year. Make sure to record the write – off of the bad debt in your debtor’s ledger or document it with a formal note. 

Obsolete plant & equipment

Should your business have plant and equipment on the depreciation schedule that has become obsolete, rather than continuing to depreciate it in small amounts annually, if you no longer use it, you can scrap and write it off prior to 30 June. 

For companies

When it is a viable strategy, you can accelerate tax deductions. This can be achieved by formally resolving to pay directors’ fees and employee bonuses and making the super contributions for the June quarter during the month of June.

Risks

Tax debt and not meeting reporting obligations

For ATO, the failure to lodge tax returns serves as a significant warning sign that there may be issues within a business. Merely not filing a tax return won’t halt the growth of any tax debt. This is because the ATO has the authority to issue an assessment of the amount they believe the business owes. 

Should your business encounter difficulties in fulfilling its tax or reporting requirements, we are able to offer assistance by representing you and engaging with the ATO on your behalf.  

Professional firm profits

The Australian Taxation Office (ATO) is currently conducting thorough reviews of professional services firms, including architects, lawyers, accountants, and similar entities. The focus of these reviews is on how profits are distributed among the professionals within these firms. The ATO aims to determine whether there are any arrangements in place that are designed to redirect income to lower the amount of tax that would otherwise be payable. When professionals do not receive fair compensation for the services they render to the business, or if the remuneration they receive is significantly less than the actual value of those services, the ATO is likely to initiate appropriate action.  

Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk.