With Easter behind us it is time to look forward to the next big date in everyone's lives 'End of Financial Year'!!!

OK, so maybe it is only us accountants who have this marked in big letters on our calendars!

But in truth, now is a great time to start considering if there is anything you can put in place prior to year-end to save yourself some tax.  The great news for small business owners is you have more ways to save on taxes than a lot of people. 

There are a numbers of simple steps you can take to minimise the tax you will pay this year.  If you would like to make an appointment with our team we can help you develop a plan that might save you thousands.  

Please bear in mind some of these strategies may only defer tax until the next financial year so it is important to take your current and future marginal tax rates into consideration.

It is also important to consider your cash flow position along with tax planning strategies.  It is very easy to fall into the trap of spending money to save tax.

Bring forward payments

Consider bringing forward any expenditure that you will incur after 30 June by asking for and paying the invoice before 30 June (for example staff training, insurances, subscriptions, donations etc.)

Prepayment of rent can also be a useful tax planning tool.

Consider purchasing consumables (stationery, printing, office and computer supplies) or making repairs and maintenance to property owned by your business or rental properties before 30 June.

Claim before paying

Just because you haven't paid for something doesn't mean you can't claim it. Remember most business account for tax on an accruals basis meaning any creditor invoices owing but not yet paid at 30 June are deductible.

Businesses can also get an immediate deduction for certain other expenses that have been "incurred" but not paid in cash by 30 June including staff bonuses and director's fees.

Superannuation considerations

Pay the June quarter superannuation by 30 June.  June quarter super is due by 28 July so why not bring it forward a month and claim the deduction rather than waiting a whole year to reduce your tax?

Maximise but make sure you don't exceed your superannuation cap. There is also the possibility of using the remainder of unused caps from prior years to make an even larger contribution.  We can guide you as to how much you can contribute each year.

Scrap stock and write-off bad debts

The value of your closing stock directly affects your business profit, the higher your stock value the higher your profit and tax. Makes sure you do a complete stocktake before 30 June. If you find obsolete or out of date stock that your business simply can't sell, you can write it off before June 30 and get a tax deduction this year.

Tax is calculated based on any invoices you've issued, even if you haven't been paid. Review the list of those who owe you money and write off those 'bad debts' now. Don't pay tax on any invoice you know won't ever get paid. Remember you need to show that you've made a genuine attempt to recover the debt. Contact us if you need any clarification on these requirements.

Full expensing of asset purchases

The final option to consider is the purchase of plant and equipment for use in your business.  Under the current full expensing provisions almost all business can claim an outright deduction for assets purchased this year.  If you are considering any large purchase of plant and equipment ensure the transaction is finalised by 30 June to make sure your tax saving is applied to this financial year.

Please don't hesitate to contact our team if you would like any assistance preparing for the end of this financial  year.