With the March quarter complete, business owners are now in a good position to estimate how the 2016 year will end up, what tax liability is likely to result and most importantly what the options are to minimise those liabilities. A good rule of thumb for any business owner is to defer taxes whenever possible, but be cautious not to enter into any transactions that otherwise aren’t commercially sound. Legitimate tax deferral strategies can result in applying short term savings to better use, including into working capital to grow revenue and profits for the next year.
If you have enjoyed a good income year in 2016 now is the time to get a handle on how that is going to translate into a tax liability and take some pre-emptive steps to minimise it. It is short sighted to only focus on the tax bill, you need to look at your whole of business, the way it operates, its likely future needs and the financial position and objectives of the owners.
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.
Where circumstances are suitable, it would be prudent to consider what pre-emptive contribution and income stream strategies in superannuation are available in light of speculative legislative superannuation changes mooted to make an appearance in the federal budget.
Hanrick Curran’s Federal Budget Update and 2016 Tax Planning Guide will be issued following the release of the Federal Budget; 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 11 May. This annual event proves popular so secure your seat here.
Hanrick Curran advisers are here to assist business owners to realise the benefits of year end planning in 2016 and provide timely support to keep the business on track to achieve profit growth well into 2017. Contact your usual Hanrick Curran adviser to book your year end planning meeting or contact one of our business advisory specialists, Matthew Beasley, Jamie Towers, Tim Taylor, Tony Hunt or Nathanael Lee on 07 3218 3900 for a consultation.