As we approach the end of another financial year, now is the time to consider the tax planning strategies that will help you optimise your cashflow and avoid paying more tax than you should.

Each year, we assist a diverse range of clients – including business owners, family groups and individuals – to make the most of tax planning strategies, and to consider new opportunities introduced in the Federal Budget.

Tax planning typically yields considerable benefits for both individuals and business owners, including a healthier cashflow and effective tax minimisation outcomes. The crucial point is to take action now, so that steps can be implemented well ahead of 30 June.

Our tax services include tax return preparation and tax planning advice. The first is directly affected by the latter, as planned tax strategies implemented in advance of 30 June can take advantage of allowable deductions that can significantly reduce your tax obligation.

Tax planning goes well beyond standard tax compliance to consider the tax implications as applied to asset management, depreciation, super contributions, investments and the various tax deductions available to you personally or your business.

This year, the Federal Budget has ushered in additional measures that may be useful for those planning ahead to the 2022-23 financial year. This includes a 20% tax deduction for investment in digital technology, cyber security and employee skills and training. This may be a consideration for businesses able to defer current year expenditures to after 1 July.

Tax offset lump sum payments and a considerable reduction from 10% to 2% on the uplift of GST and PAYG, if legislated, is set to deliver cashflow relief, particularly for SMEs who can keep the extra cash in working capital rather than handing it to the ATO.

Other tax planning considerations

Defer income
Reducing taxable income this year may be achieved by deferring income until after 30 June. Holding invoicing until the new financial year will of course impact your taxable income in the coming financial year. Discussion is needed to consider the benefits of paying less tax now and whether or not your income projections for the coming year provide a reasonable opportunity for spreading your tax commitment.

Prepay expenses
Individuals and SMEs can claim a tax deduction for eligible prepayments of business or investment loan instalments or expenses made for up to 12 months.

Review debtors
Business owners should review their debtors and write off bad debts prior to 30 June in order to claim a deduction.

Home office deductions
In addition to the usual fixed rate or actual cost methods, the short-cut deduction methodology can be used in the 2021-22 financial year. This allows taxpayers to claim a deduction for each hour that they work from home. A rate of either 52c or 80c will apply, depending on what else is claimed directly, e.g. phone and internet.

Maximise superannuation contributions
For the 2021-22 financial year, individual taxpayers may make deductible concessional (before tax) contributions, inclusive of employer contributions already made on their behalf, of up to $27,500 (increased from $25,000 in 2020-21).

Catch-up superannuation contributions
Boost your super balance by contributing any ‘unused’ concessional contribution cap amounts since 2018/19 (and for up to five years). Of course, there are rules that relate to superannuation balance limits that you’ll need to consider.

Claim eligible deductions
As expected, temporary full expensing has been extended to 30 June 2023. All businesses with turnover less than $5 billion are able to claim an immediate tax deduction for the purchase of new plant and equipment items.

Consider restructuring inefficient business structures
To take advantage of the tax saving opportunities that may be available to you, I encourage you to contact us as soon as possible so that plans may be formulated and implemented in time.

We can help you to understand the tax minimisation options that are available and appropriate for your business, personal situation and future goals. However, action is required as soon as possible because, once 30 June turns over, any tax opportunities specific to this financial year will be lost.

For more information about tax planning and preparing your business for its next phase, please contact Rosenfeld Kant on (02) 9375 1200 or email gary@roskant.com.au, raul@roskant.com.au or elias@roskant.com.au.

Partnering with you to deliver efficiencies, growth and success for your business.

The information (including taxation) contained within this article is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Rosenfeld Kant strongly suggest that no person should act specifically on the basis of the information in this document but should obtain appropriate professional advice based on their own personal circumstances.