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  • Camron Finlay

Your Year End Tax Minimisation Strategy


Action Required: 2022 Year End Gameplan Meeting


Almost everyone wants to reduce tax and find ways to stop sending so much money to Canberra.

One benefit to come from the recent pandemic was business owners looking deeper at their own financial situation, and taking things far more seriously.

Industry talk suggests that upwards of 30% more businesses are now demanding Tax Minimisation Strategies to protect their wealth and achieve a stronger cash flow.

Why Plan? And Plan what?

There are several factors to bear in mind now, both could affect tax and future cash flow:

· New government policies (too many independents with an influence and agenda?)

  • A new Budget before October (the deficit, interest rates, election promises)

  • Tax Rulings and current concerns of the ATO (especially investments, trust distributions and loans, record keeping)

  • Inflation, even the possibility of a recession

  • Lower depreciation claims this year (Plant and Vehicles were written off in past years).

Between now and 30 June, planning is a necessity so you can reduce or avoid stress and gain better control of your cash in the coming months. This requires consideration of principal/family salaries, compulsory superannuation, replacement of plant and vehicles, superannuation and investment, Loans and Division 7A requirements, stock holding at year end, investment properties, business structure, accounting records, etc.

Good Planning is never ‘last minute’ nor ‘ad hoc’

This is the program and order that we work through for year-end planning:

Now to 30 June:

  • Meeting to consider appropriate strategies to reduce tax

  • Planning Report on specific actions and expected tax savings

  • Implementation of Report.

Before 30 June:

  • Trust distributions prepared and signed (Trust tax is 47% if no Resolution before 30 June)

  • Check superannuation pensions paid for year

  • FBT Return (if required) (This should be mandatory for all business’ even as a safety net)

  • Stock take as at 30 June.

July:

· Cash Forecast for 18 months incl. all tax payments (BAS, Instalments, Tax, statutory Super) – so you can plan and put money away and keep ahead of the ATO

  • Finalise Pay Summaries showing Fringe Benefits (if applicable).

Benefits of Planning for you

The purpose of this approach is to:

  • Assist you to reduce tax payable by looking forward and not just backwards

  • Consider best profit distributions and tax outcome to ensure you maximise your after-tax return

  • Prepare accurate trust distribution Resolutions so tax is not payable at the higher rate

  • Understand cash flow for a foreseeable period, and allow for profit and variations from seasonal revenue.

Last year’s planning resulted in major tax savings for clients, certainly, many times more than their investment.

When we meet we’ll estimate our cost (everyone is different, but between say $600 and $1,200), payable over 3 months, and if we can’t find a saving there will be no fee.

Next Steps

Simply send us an email confirming you’d like us to attend to this process for you, which is optional but valuable and an offer where you cannot lose. We’ll then be in touch to arrange a meeting on current year profits and strategies for tax savings. There is only limited time before 30 June so we will attend to assignments in order of confirmation and apologise in advance if due to time we can’t accept all assignments.

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