Effective Tax Planning

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What is tax planning?

Tax Planning is considered annually, in the last 3 – 4 months of the financial year. It 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.

Why is tax planning important, and why does a business need it?

Some of the key reasons why we prepare tax plans for our clients are as follows:

  • To assist with budgeting tax payments for businesses over the next 12 – 18 months, by understanding your future tax payment requirements. It can also allow a business to utilise their money in other ways such as to fund working capital requirements or to invest in other assets
  • To review and implement 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
    • Review of bad debts
  • Great opportunity to review and implement measures that may be applicable to certain industries prior to the end of the financial year in light of Federal budget measures which are usually announced in May each year.
  • Considering tax effective trust distribution minutes:
    • 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;
  • Review of quarterly PAYG Instalments to see if there is the opportunity to vary them down to assist with your businesses cash flow requirements.
  • Good opportunity to review corporate structures to ensure they are tax effective

If your business needs help with tax planning or have any questions on your tax preparations, contact our team

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