The end of financial year is fast approaching and now is the time to review your business affairs and ensure you are trading efficiently, solvent and effectively. Below is a short accounting and tax health checklist of items for your consideration.
Are you still trading in the most appropriate business structure?
The business structure you started in may not necessarily be the best structure for you today, due to tax law amendments over the years.
Tax free small business restructure rollovers are available if you meet the criteria and as a result you can change your structure with no tax payable. With the recent land tax changes and limiting deductions on vacant land, now is the time to consider a restructure to become more tax effective.
Are you using the appropriate accounting software?
Having the appropriate accounting software for your business is essential to be able to track your business performance. You want to ensure your computer software is up to date with all the latest compliance rules i.e., single touch payroll (all employers to be compliant by 30 June 2021).
In the building industry having the appropriate software can allow you to monitor your specific jobs appropriately and let you know whether the job was profitable or not.
Do you know your cashflow position? The most essential part of a successful business is understanding and managing cashflow appropriately. To do this we advise preparing cashflow forecasts and comparing them to actual results.
This helps you to identify times where cashflow might be lesser and you can more readily prepare for these situations. A good point to note; your profit position does not necessarily equal your cash position.
Other items for your consideration • Progressive changes to the company tax rate:
• Instant asset write off for eligible business: • From 7.30pm AEDT on 6 October 2020 until 30 June 2022, temporary full expensing allows a deduction for: • the business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test.
• the business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million.
• the balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.
Have you booked your tax planning meeting? As the financial year is closing, speaking to your accountant or financial advisor now on how to minimize your tax over the next couple of months is critical. It also gives your accountant or financial advisor a chance to complete a quick review of your year and advise you of a potential tax liability and how to plan for it.
If you’d like an independent review, please contact Paul Dimasi (08 8139 1111 or firstname.lastname@example.org). As part of our ongoing relationship with MBASA we offer a free first meeting.
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