Why a Tax Plan Can Work Wonders for Your Business

All businesses need to be prepared for further expected rises in inflation, interest rates, fuel costs and staff costs, not to mention the effects of what’s happening globally.

How that will affect small to medium business will be anyone’s guess. That’s why it’s important to take action now in the run up to the end of financial year, when you can tweak your tax strategies for maximum tax savings. Often, when 30 June comes along it’s too late to take advantage of all available, legal tax saving strategies.

We’ve been noticing a growing variance across our clients and industries they operate in, with some achieving record results while others struggling to maintain their margins and profitability. When margins are being squeezed and the cost of doing business keeps rising, it is more important than ever to make sure you save on tax!

How Tax Planning Works

When you create a tax plan, you’ll be looking at your business wholistically. Not only do you get a smaller tax bill as a result, the process of tax planning will also show you ways to:

• gain clarity on your business’s performance
• track your KPI’s against prior years, others in your industry and against ATO business benchmarks
• minimise your tax liabilities every year
• capitalise on opportunities that have presented themselves during the year
• address challenges that have been experienced during the year
• ensure your business’s cashflow requirements can be met
• reset and refocus your business operations as your business and personal goals have changed as a result of the pandemic and the foreseeable challenges
• minimise, rationalise and protect your business operations in areas where we see the most vulnerability
• pause, close down or get your business ready for sale

Why a Yearly Tax Plan Can Work Wonders

To ensure you don’t pay excessive tax on your profits, a tax plan will ensure appropriate tax saving strategies are put in place before 30 June 2023. Many of the strategies are required to be carried out before 30 June and cannot be implemented after that date.

Tax Planning is something that can make a difference 8 weeks out from the end of financial year. And it works even better if done all year round. Some of the benefits of tax planning include:

• an accurate assessment of your year to date profit, your likely annual profit and the amount of tax payable (assuming no tax planning strategies are adopted)
• allowing discussions on what changes might be necessary in your business to improve profitability, cashflow and long term success!
• identifying changes that might involve your pricing, your product mix, staff wages and the direction of your business
• determining your direction and goals for the new financial year

A Final Word on Tax

You might have heard the saying “Nothing is certain except death and taxes”. This may be true, but there is no need to give the ATO more than you need to.  As accountants we work with the ATO, but they are not our clients. You are!

We want you to pay as little tax as possible and that’s our mission. As Kerry Packer said so eloquently at a Senate Inquiry in 1991:

“I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn’t minimize their tax they want their heads read because as a government I can tell you you’re not spending it that well that we should be donating extra.”

Don’t give the ATO any more of your hard earned dollars than you have to. To find out how you can save tax, click here to download our FREE eBook How To Slash Your Tax Legally.

Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.