The Tax Clock is Ticking

By Tina Zawila

Can you believe it’s May already?!  The countdown is on to the end of the financial year.  June will be here before we know it. Are you ready?

At Sothertons, we prefer to work with our clients regularly throughout the year (monthly or quarterly), not just after year end when you need to lodge your tax returns. However, even if you believe you don’t need to meet with us monthly or quarterly, you should meet with us NOW before year end to ensure you have done all you can to minimise tax and maximise your business’ financial performance before the clock ticks over to a new financial year. 

Many tax strategies require action before 30 June, such as the payment of superannuation contributions (which must actually be received by the fund before 30 June to claim a tax deduction in that year), and writing off bad debts (which must be recorded as bad prior to 30 June).  However, modern technology and compliance obligations also means that most business’ submit a lot of data to the ATO throughout the year, therefore, ideally you need to record and report your results accurately to the ATO as you go. 

When we talk about “Tax Planning” with some businesses, they say, “My business hasn’t done as well this year, so I don’t need tax planning”.  However, in the last couple of weeks we have helped clients whose businesses have experienced a decline (in sales and profitability), or are in start up phase, and we were still able to identify thousands of dollars in savings and business improvement strategies.  And the real benefit - is that they can implement these strategies immediately. These strategies also positively improve their cashflow NOW (both were struggling and had tax debts with the ATO), not six months after year end when they would normally see us to prepare and lodge their tax returns. 

Another hurdle for some business owners when seeking advice throughout the year is the accuracy of their financial record keeping. If you can’t determine where you are now, you will find it difficult to predict where you will be by 30 June.  So take the time to review your current record keeping systems to ensure that you have easy access to up to date information.

If you need assistance with your record-keeping, or want advice on tax and business improvement strategies call our professional team at Sothertons today on 49721300 before 30 June sneaks up on us all.