You wouldn’t buy a property and only look at the price after settlement date, so why do so many businesses fall into this trap when it comes to their tax. 30 June can be regarded as the settlement date of your tax for the year. Once this date passes, you are effectively locked into a deal with the ATO that may have been managed differently with earlier planning.
When it comes to tax planning, the businesses that start thinking about tax before the end of the financial year are the ones that end up with more options, fewer surprises, and a much smoother ride.
Tax planning isn’t about ticking boxes. It’s about giving businesses enough time to make informed decisions that can minimise tax impacts and maximise business performance alike. As the ATO continues to crack down on timing, it becomes more important than ever to have plans in place before that crucial 30 June deadline.
Why It Pays to Plan
If you leave your tax work until after the year is done, you are limited to what has already happened. There is only so much that can be achieved when working with historical figures. But when you start early, you can shape the outcome. With a solid plan in place, you get time to:
- Spot opportunities for deductions
- Identify opportunities for big purchases
- Smooth out cash flow
- Avoid the panic that comes with rushing
- At the very least be prepared for the potential tax liabilities hiding in the closet after a successful year
Be Prepared to Be Prepared
It sounds repetitive, but the theory holds true every year. The core goal of a tax plan is to be prepared come 30 June with a plan tailored to your specific business needs and goals. Yet, to build a solid tax plan, you need good information. We can tax plan from a chequebook of sales and purchases, or from your Xero/MYOB file, but the more details we have the better the quality of the tax plan. A few things to start thinking about to get the most out of tax planning are:
- Up‑to‑Date Accounts, be it MYOB, Xero or an excel spreadsheet, having accounts up to date is the key to a tax plan
- A Clear View of What’s to Come (I.e. Large Sales, Expenses or Capital Purchases). A better view of income and expenses to come means a better estimate of the tax outlook come 30 June. With this comes more confidence in decisions made around your tax plan
- Awareness of Any Big One‑Off Events. Selling a property? Changing business structure? These all matter when tax planning and can significantly alter the approach taken.
The Bottom Line
Tax planning works best when you are ahead of the game. With tidy accounts, a clear view of what is coming, and enough time to act, you can make decisions that genuinely improve your tax position rather than simply reporting the outcome after the fact.
If you are unsure whether tax planning is right for your business this year or want to understand what options may be available before 30 June, now is the time to act. Reach out to your HCQ advisor to discuss your position and get the right support in place before the end of the financial year.
