Year End Tax Planning
On this special episode of Get to the Contest Small Business Podcast, we have Jeremy Fox from Fox Group Chartered Accountants. We discussed all about year-end tax planning and all the things you need to know before June 30th.
Here are some key takeaways from our talk:
Tax planning starts with your structure.
Getting your structure right is critical to being the most tax effective arrangement that you can be.
Have up to the date financials and, ideally, have that data in the cloud.
If you're on Xero or My Account Live or one of the live products, at least then, you've got live data; you know where you're at, and you can give your accountant access to the information, and they'll be looking at real-time data. It is impossible to provide good tax planning advice when you don't have all the details.
Good tax planning needs to also plan for the cash flow requirements around it.
It's one thing to say go and put some money, buy some assets and put some money into Super, but if you haven't thought that through, funded or allowed for that cash flow, it can be very difficult to get your best tax results. It is really important to start planning now for next year so that you physically have that money set aside and you can take advantage of all those things that are going to require some physical cash payments.
Determine the timing of expenses.
This is where Jeremy talked about bringing forward expenses, perhaps delaying income, and also having pre payments of things. This saves you tax now. At least, tax deferred is tax saved. It takes the pressure off and allows you to keep that working capital in your business rather than have to give it over the government. If we can delay those 12 months, this is going to allow you breathing room and allow your business to grow.
The best tax result may not be the lowest tax answer. Tax optimization covers things like budgeting, understanding what next year's tax rates will be, what count your tax rates will be, and also the cash flow requirements of the business as well.
Having a plan and not sticking your head in the sand.
If you're a small business owner out there and things are going well or maybe not so well, nothing will change unless you've got a plan. Review your numbers and be prepared to take that time out of your business so that you can stop, pause, reflect, come up with some strategies, and then take action. That's critical.
Stop and enjoy.
Just smell the roses. Take time out. Life goes so fast when you're a small business owner. It’s very hard to get any perspective when you're deep within the business.