Update Your Technology and Save On Your Tax

As any number of television, radio and print advertisements will soon be reminding us, the end of the financial year is in sight. While it is a good time to do some personal shopping with many stores having pre-stocktake sales, it is also an important time for businesses to shop.

This is when you should be planning end of financial year (EOFY) purchases that will both deliver maximum benefit to your business, and provide tax benefits.

Assess Your Communication Assets

Here at Tele2, we believe your communication assets are often your most important, especially for small businesses. However, it’s too often the case that businesses under-invest in these systems, and limit their own growth by doing so. So this year, we suggest you assess your current equipment, and consider updating and rejuvenating your on-site and mobile technology.

Why not start the new financial year increasing your efficiency, starting with how your staff communicate with customers, suppliers and colleagues. This can be achieved by a review of your communications systems in and out of the office. There are many devices available today that can help you communicate quickly, more easily and not to mention more cost effectively.

Other Tax Saving Tips

Here are some other effective ways strategies that small businesses can implement to help minimise their tax obligations before EOFY close off:

Super – as a small business and employer your superannuation is one of the most important ongoing obligations you have. While the last date on which you can pay it is late in July, if all personal and employee contributions are made by June 30, it means that deductions can also be claimed in this year, rather than waiting 11 months to claim them next year.

Day-to-Day Expenses – if you’re lucky enough to have some cash in the bank or strong weekly or monthly cash flow, consider paying your running expenses in advance. For businesses these expenses might be rent, insurance premiums, interest fees, event attendance fees and professional memberships. All are legitimate business expenses that can also allow a deduction when paid in advance, meaning that you can have the double benefit of less hassle later on, and more cash back in the bank when you’re deduction is processed and your tax liability is lowered.

Debts – bad debts are a part of doing business. Review your accounts payable and make a judgement about those debts which you are unlikely to recoup. Writing them off this financial year means you can also claim the deduction this year, but speak to your advisor about how you classify these before you draw a line through the amount owing.

Inventory and Assets – in the same way you examine your debts, run the ruler over your existing assets and stock on hand. Anything unlikely to sell or that no longer contributes to your business should be written off using one of the acceptable accounting methods. It has the added benefit of making you more productive for the upcoming year.

Clear Your Loans – if there are business level loans that are outstanding that you’ve accrued this year, it’s a good time to pay them before they “settle” on the books. This is especially the case if you’ve obtained funding from a related party like a family member or business associate. If you haven’t charged an arms length equivalent interest rate it could be treated as business income for income tax purposes. But the real penalty is that you’ll be hit with tax on the amount at the top marginal tax rate of 46.5%.

Cross the T’s and Dot the I’s – lodging tax returns on time and claiming the correct amount should be ‘no brainers’. But the fact is that billions of dollars is chased through the system by the Tax Department each year, making sure that each business and taxpayer pays their fair share of tax. Often mistakes are minor and honest and are rectified with a late lodgement notice or an adjustment, but taking the time and care to do things properly the first time is the best policy.

Seek Help – business and personal taxation in Australia is complex, but there is an army of able professionals out there to help provide advice at tax time. The ATO website is also an invaluable tool, but there is no substitute for a qualified tax accountant to make sure that you are getting the right results.

Tax time is a busy time for businesses and consumers alike, but it can also deliver opportunities when managed well. With some astute forward thinking, by the time June 30 comes around your business could be in a better position – so get your plan right now you could reap the benefits sooner rather than later.

Tele2 Advisors

The friendly and helpful team here at Tele2 is on hand to discuss your communications equipment needs and can advise on the best for your particular business.

We welcome your call on 07-5478 2000, or email us by clicking here.