With the days, hours and minutes ticking down to the end-of-financial-year, it may be tempting to think there’s not a great deal you can do to minimise your tax payable and help set your business up for success before the June 30 clock strikes. But you’d be wrong.
Here are just a few ideas on how you can make the most of tax time.
- Consider taking advantage of the instant asset write-off
Spend money to save money. Sounds counterintuitive, right? But if you need to buy some new equipment – like a new coffee machine, a vehicle or even some new computers, – you can probably write it off against your 21/22 tax bill.
The scheme is open to businesses that have an aggregated turnover of less than $500m, and some assets are excluded, including plants, buildings and assets you lease out. But, if the asset meets the criteria, costs no more than $150,000 and has been purchased and used in the year the write-off is claimed, then you should be good to go. For more information, the ATO has a page dedicated to the Instant Asset Write-Off.
- Remember to write off your business loan interest
Interest on business finance is generally tax-deductible, and can add up significantly – you just need to remember to do it! For example, if your weekly repayment is $500, and $150 of that is interest, you could claim $7800 (52 x $150) as a tax deduction – which would save you a few thousand dollars.
- Invest in your business
Again, we’re spending to save here, but if there’s anything you can prepay for the next year or two now – for example, insurances, software programs or subscriptions – it’s worthwhile doing. It can all add up, and it could well be more beneficial to deduct from this year rather than next.
- Pay any super you owe
If you have employees, you know you have to pay their super at least quarterly, by the cut-off dates determined by the ATO. By paying the April-June instalment in late June, you should be able to deduct the payments from this year’s tax.
- Review any bad debts, and write them off
It’s a fact of business life that some accounts go bad, and some invoices just don’t get paid. If you’re in this position, then it’s wise to assess those and let your tax accountant know which ones you aren’t going to be taking payment for – you may be entitled to a deduction if you’re no longer expecting to receive payment for those invoices.
The end-of-financial-year can be a complex time, which is why we recommend working with a professional tax accountant to maximise your position and ensure you’re meeting all of your obligations. Alternatively, the ATO’s website is full of information surrounding tax rules and regulations.
And if you’re an Australian SME that wants to take advantage of the instant asset write-off, Bizcap is committed to helping you access the funding you need. Call us today on 1300 922 223, or apply online to find out whether Australia’s most open-minded lender can help your business succeed.
The information above is general in nature, and correct to the best of our understanding. We take no responsibility for your ability to qualify for any deduction.