Tax time! The words are usually enough to send a shiver down the spine of most clients. Lodging your tax return is usually not a pleasurable experience and sometimes results in some nasty news at the end in the form of a tax bill.
Now is the time you can act to try and minimise any profits and reduce the taxes you pay, as well as get an estimate of your likely tax liability for 2015. Getting work done now can help give you an indication of your tax cash flow moving forward and whether there is a need to do some tax planning prior to 30 June. There are several things you can do to help minimise your taxes and if you leave this until after June 30, a lot of these measures cannot be done.

• Write off any bad debts – any debts which have been on the books for ages and which are never likely to be paid should be written off prior to 30 June.
• Check your depreciation schedule and do a stocktake – many businesses have long lists of stock and assets and many of these items are overvalued or are worthless. These can also be written off prior to 30 June to reduce your profit.

• Pay your June superannuation before 30 June – usually you would pay this super in July after the end of the quarter. However super can only be claimed as a deduction in the year it is paid, so if cash flow permits, look to pay your employee’s and your super before June 30.

• Bring forward any expenses – look to buy items such as consumables, stationery, computer items and client gifts before 30 June.

• Defer income – if possible and again cash flow permits, delay invoicing clients until after 30 June.

• Prepayments – if you are a small business (turnover less than $2 million) look to prepay certain business expenses upfront for the 2016 year such as insurance, rent, car registrations, annual subscriptions.

• Purchase an asset under $20,000 – again only applicable for small businesses, but the new Budget legislation lets businesses deduct any asset under $20,000. So if you need new machinery or office equipment less than $20,000, buy it prior to 30 June and get the benefit of the full deduction this financial year.

• Look at accruing directors fees – for companies with high profits, look at bringing in an accrual for directors fees. This gives the company a deduction this year, but the individual director does not have to declare the fee in their tax return until the following year when the amount is paid.

If you believe you may have a time problem, contact us immediately for a meeting so we can discuss your situation and what remedies might be available. Alternatively, at least consider some of the above recommendations to improve your taxation position. Good luck!