With the countdown to 30 June on, SMEs should be thinking about getting their tax affairs in order.
To make the process as simple and painless as possible here are some top tips for SMEs at tax time:
- Don’t leave it to the last minute: get a jump on your tax planning and complete your tax return early. This will ensure you can identify liabilities or refunds well ahead of time, helping you manage cashflow and putting you in a better financial position for the FY ahead.
- Pay expenses in advance: cashflow permitting, consider paying recurring expenses – such as insurances, superannuation, rent and the like – in advance of 30 June. It can mean an immediate tax deduction in this financial year.
- Make use of the expert advisors (accountants, tax agents, financial planners): our recent The Voice of Australian Business survey shows only 26% of SMEs use external advisors. And yet by engaging early with an advisor and keeping regular contact, you can save yourself a lot of hassle. Tax time is when their expertise can help most – allowing you to navigate the complex tax landscape and regulations; not only saving you time and money but most importantly providing you with peace of mind.
- Take advantage of cloud technology: there are a host of online accounting software available, like Xero and MYOB, that makes managing your paperwork easier. A big benefit is the instant access it provides to your consultants and advisors, like accountants. It means we can provide help and guidance quickly and in real-time.
- Remember the $20,000 asset write off: this instant asset write-off scheme allows businesses to immediately deduct the full value of every asset purchased to the value of $20,000, instead of claiming the deductions over a number of years. Take advantage of it!
- Ask for help if you’re struggling: for those businesses that can’t afford paying a hefty tax debt in lump sum, it’s important to remember that the ATO has flexible payment plan options available. The key is to work co-operatively with the ATO and engage them early.
Tax time can be a frantic time for SMEs but it doesn’t have to be the case. Keeping on top of paperwork, starting early on your tax planning and engaging with external consultants and advisors will make all the difference.