Small Business Tax can seem like a foreign language, especially when there are so many grey areas. Melbourne Accountants of Nobel Thomas has provided a general list of small business tax do’s and don’ts.
To determine the right structure for your business it is important to understand where you’re heading and what you’re ultimately wanting to achieve. Whilst it is often beneficial to act early in business, it can be extremely costly to charge like a bull if your bull is charging in the wrong direction. The right structure at the start, can save many thousands of dollars in tax in the future. It is important to understand your end goals before you set out to achieve them.
Amounts relating to superannuation, income tax and employee PAYG withholding are often used in a business’s day to day operations, and there is nothing wrong with this! Although, when it comes time to actually pay these amounts, Owners often find themselves in a position where they don’t have the funds available to make the payments. Over time, this can snowball to the point where there are many periods that need to be paid. Without payment, this can attract general interest charges and other penalties and create undue pressure on business cash flow.
Tax is based on profit. Therefore, to predict your tax payable, you should have a detailed profit & lost forecast. This is then used to form a balance sheet forecast and subsequent cash flow forecast. These financial reports are important for understanding your future position as well as identifying any key issues before they eventuate. Unplanned payments can kill a business’s cash flow and significantly hinder growth. In addition to creating forecast reports, successful business is constantly revisiting and updating the reports as required.
Successful business owners are constantly asking questions. They understand the need for collaboration and use specialist advisors regularly as a permanent fixture to their business.
At Nobel Thomas we are fluent in tax and understand the workings of all small business tax concessions and Research & Development (R&D) tax concessions. If you’re unsure of whether your activities constitute R&D, or whether it would be worthwhile registering your business for the R&D concessions, just give us a call as this could save you thousands of dollars in tax savings if applicable.
I often get asked if people should buy a new vehicle before 30 June to save on tax. My answer is “To save on tax? No. Because it makes economic sense? Yes”. Purchasing a vehicle comes with many factors and include the following: