As we step into May and edge closer to 30th June, your attention will be fully focused on year-end tax planning, if it isn’t already. It is important to get a head start on your planning, so that you don’t miss out on taking advantage of beneficial tax deductions and concessions. Year-end tax planning allows you to project your business’ profit position for the year, and then identify opportunities to distribute that profit to minimise the resulting tax liability in time for financial year end.
Here are some benefits to forecasting what the end of year status of your business is:
- Tax planning allows you to take advantage of tax rate differentials between years, but it is important to take note of which rate is more beneficial for you.
- Doing a financial health check of the business helps you identify strengths and key areas of weakness or potential threats, helping you plan strategies for multiple outcomes.
- You are able to draw up a budget for the new financial year, which forecasts where you can spend money and focus resources towards areas of the business that need it.
- Year-end planning also allows you to forecast your cash flow, and check if it aligns with the budget you have drawn up.
- Reviewing your financial statements and planning for the year ahead also allows you to predict the growth path of your business, and comparing to other similar businesses – checking where you stand, where you want to be and how you want to get there.
During a tax planning discussion with your adviser, you can expect:
- An estimate of Income Tax payable for this year, the amounts and timing of Tax instalments for next year
- A summary of options for the mix of salary (and Tax to be withheld), dividends (where appropriate) and Superannuation contributions to be paid this year
- Advice on Tax Planning initiatives that may be undertaken to minimise Income Tax for the current year
- Determine how Family Trust income is to be distributed so Trustees’ Resolutions can be prepared before 30 June.
Hanrick Curran’s Federal Budget Update and 2017 Tax Planning Guide will be issued following the release of the Federal Budget next week; look out for our special Federal Budget Bulletin for these details. Our specialists will cut through the complexity at our Pre Financial Year End and Post Budget Update event in Brisbane on the May 18th, 2017.
Hanrick Curran can assist you to realise the benefits of year-end planning in 2017 and support you to keep your business on track to achieve profit growth in 2018. Contact your usual Hanrick Curran adviser to book in a consultation today!
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.