Tax Planning Tips

10 things to do before 30 June 2020

1. 1. 1. Talk to us
         Now is an important time to talk to us about your options. Never has end of financial year planning been so important, with many businesses trading well for the first ¾ of the financial year and then have a decline through the final quarter. Managing tax is a matter of survival for many businesses. The following ideas should be viewed as part of your overall strategy.
      2. Review your business structure
         Now is a great time to review your structure and create a plan to make changes to get the best tax and commercial advantage possible.
      3. Consider taking advantage of lower company tax rates
         Company tax rates for companies operating a business have been reduced over recent years and are planned to drop even further in the future. This makes using a company an attractive option in certain circumstances.

         Year	Turnover less than	Tax Rate
         2018/19 – 2019/20	$50m	27.5%
         2020/21	$50m	26%
         2021/22 onwards	$50m	25%

      4. Pre-pay expenses
         Some expenses like rent, insurance, and subscriptions to any professional associations can be prepaid for the coming financial year before 30 June. Meaning you can get the tax deduction in this year.
      5. Take advantage of the $150,000 instant asset write-off
         This enables you to immediately deduct the cost of purchasing new and used business assets. This measure ends on 30 June 2020. From 1 July 2020 onward the instant asset write-off will return to $1,000 so now is the time to act.
      6. Review your invoicing
         Review the invoicing you have left for the remainder of the financial year and where appropriate, consider deferring some of it until July.This can also have a cash flow impact, so be cautious.
      7. Contribute to your own super
         Top up your personal voluntary superannuation contributions. You can contribute up to $25,000 in deductible super contributions each year, so if your cash flow allows it, you can get a tax benefit and keep the money (in your superannuation).
      8. Pay employee super contributions
         Don’t forget that superannuation contributions are only deductible when they are paid, so it is worth considering paying your employees June quarter super payments prior to the end of June to get the deduction.
      9. Review your debtors
         Review your debtors and write off any unrecoverable debts. These debts are tax deductions in the year in which you write them off, regardless of the year you invoiced them.
      10. Complete a stocktake
          Review your stock valuation and write off any stock that is damaged or obsolete. Complete a stocktake, and remember that stock can be valued at the lower of cost or net realisable value.