For example, by looking at what you have been doing in the past and why it might not be working, an organisation can decide exactly what they need to do to kick-start the 2017-18 financial year.
One good way to improve your business at the end of the financial year is to invest in new technology.
And by keeping up-to-date with the latest developments, savvy businesses ensure they are always innovating and moving ahead.
Of course, the end of the financial year can also be a stressful and difficult time – especially for small businesses with fewer resources.
So, to assist both small and medium businesses in handling their tax and financial commitments, we have prepared a short checklist of helpful tips for SMEs:
- Get in early to sort out your taxes. Don’t leave preparation and lodgement to the last minute.
- Know what you can and can’t claim. A recent survey by accounting software giant Xero found 40 per cent of small business owners were unsure of what they were able to claim.
- Take advantage of the ATO’s $20,000 ‘Immediate Asset Deduction’. The survey found 46 per cent of businesses had not yet done this.
- Be wary of tax refund scams. There are several scams that target small businesses around tax time. Common tax time scams include bogus tax refunds asking for bank details, and ‘tax owed’ scams.
- Backup and store your registration, financial and customer data, and other important business documents in a secure off-site location. This can help your business stay up and running during unexpected events, such as natural disasters.
- Keep your tax records in the Cloud. Using online tools to organise your invoices, receipts and other relevant paperwork also saves time and helps your business bottom line. Cloud-based productivity apps integrate seamlessly with other accounting software.
- Identify the best tax-planning opportunities for the coming year. This could include accessing the Government’s 1.5 per cent company tax cut for incorporated small businesses. It could also involve reviewing and updating your business and marketing plans.
- Check you have the right insurances in place for your business. If your circumstances have changed – you may need to update your level of cover.
- Check the superannuation concessional contribution limit for the year. It recently increased from $25,000 to $30,000. Also, for those with a self-managed super fund, transferring surplus wealth into super can be an excellent tax strategy.
- Employers should ensure their superannuation contributions for employees are up-to-date. Also if possible, try bringing forward the June quarter ‘Superannuation Guarantee Charge’ payments one month early to help minimise tax.
- For those with shares, it may be helpful to assess any income earned through interest and dividends. This includes franking credits, which you should always take into account in your tax planning.
- If your company has made a capital gain in the current financial year, it may pay to look at the best ways to minimise the tax on those gains. This could include selling assets that have incurred a capital loss – to offsetting those that have made gains.
- Review your depreciable assets. The ATO publishes a taxation ruling each year about the effective life of assets – and this can be used as a guide when calculating depreciation. Remember it is only a guide and businesses can claim higher depreciation where warranted.
- Business owners can claim self-education costs, as long as the study is directly related to maintaining or improving current occupational skills. Claimable expenses include course fees, textbooks, stationery, student union fees, and depreciation of computers and printers.
- Use a registered tax agent. It is important to ensure your tax agent is registered with the Tax Practitioners Board (TPB) – as there is no protection for taxpayers who use unregistered tax or Business Activity Statement (BAS) agents.
By following some or all of the above guidelines – hopefully your business will feel the benefits and not the pinch, at tax time!
With Mike Peeters Media