Benefits of Effective Tax Planning


We understand the challenges you face in managing your taxes efficiently while maximizing the financial success of your business. With many businesses feeling the pressure of rising costs, competition for talent and supply challenges, business owners can often be focused on maximising their cash flow, and subsequently have a lesser focus on managing and minimizing their tax liabilities.

With the end of the financial year fast approaching, now is a good time to think about some of the tax matters that will impact your business and personal tax positions for the 2023 financial year.

Tax planning is considered annually, in the last 2-3 months of the financial year and is the process of analysing the financial performance to date of a business from a tax perspective, with the aim to ensure maximum tax efficiency.

So, what are the benefits of preparing tax plans? Below are some of the key reasons/benefits of preparing a tax plan:

  • Considering and executing tax-effective trust distribution minutes – under current tax law, trustees of discretionary trusts need to consider which beneficiaries they will make presently entitled to the income or capital of the trust on or before 30 June each year. If not, the trustee will be taxed on any undistributed income at the highest marginal tax rate;
  • Tax Planning includes a review of, and implementing tax minimisation strategies prior to the end of the financial year, such as:
    • Superannuation contributions;
    • Considering eligible tax-deductible asset purchases prior to the end of the financial year;
    • Timing of expense payments to ensure they are tax deductible in the current financial year, including potential eligible tax-deductible prepaid expenses to be made prior to 30 June;
    • Review of debtors to determine if any can be written off as a bad debt prior to 30 June, to claim a tax deduction for;
  • Tax planning assists business owners in budgeting for tax payments over the next 12 – 18 months. Understanding future tax payment requirements can allow businesses to utilise their money in other ways such as to fund working capital requirements, or to invest in other assets;
  • Tax Planning is also a great and timely opportunity to review and implement measures that may be applicable in light of the Federal Budget measure announcements, which are usually announced in May each year;
  • As part of the tax planning process, we review our client’s quarterly PAYG Instalments, to see if there is any opportunity to vary them down, to assist with their cash flow requirements.
  • Tax planning provides a good opportunity to review your business structure to ensure they are tax effective.

To learn more about tax planning and minimising your tax obligations, contact your Hall Chadwick QLD advisor today.

Any information provided in this article is purely factual in nature and does not take into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product.

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