Master Your Tax Planning

Many SME business owners make the error of thinking that the only time you should be concerned about your tax is when tax time rolls around. However, if you implement a tax strategy which involves taking small steps throughout the year, you can save yourself a lot of money, time and hassle.


Ultimately, forward planning is the key to minimising your tax. There are many methods you can employ throughout the financial year that can save you money on your tax overall. However, if you wait until the end of the financial year, many of these options are no longer viable.


With this in mind, we’ve put together a quick, preliminary checklist for you, to empower you to take some small steps towards mastering your tax planning strategy.

1.       Review debtors

Review the list of those who owe you money, and if you know they won’t pay you, write it off. Your income tax is payable on any invoices you’ve issued, regardless of whether or not they’ve been paid, so don’t needlessly pay taxes on invoices that you’re confident won’t ever be paid.

2.        Review your stock levels

The value of your closing stock directly affects your business profit, because the higher your stock value, the higher your profit (and therefore the higher your tax). Make sure you regularly review and identify obsolete or old stock, and scrap or revalue it to its correct value. Individual items of stock can be valued at cost, market value or replacement value. If you implement stocktake strategies regularly, this process becomes more efficient, rather than it being a stressful and time consuming task once or twice a year.

3.       Defer income

This is one of the simplest tips that can defer a lot of tax for many small businesses. If your cashflow allows, you may consider deferring some of your invoices until July. If the income was not invoiced this financial year, it can’t be taxed this financial year. Make sure if you decide to do this, it works within your business’ budget or financial plan to manage the income and expenses for that particular month.

4.       Review your invoices issued

If you have invoiced someone in advance for services you will provide in the next financial year, then you may not have earned that income in this tax year. Rather, that income may belong in the year you provide those particular services. Make sure your invoices accurately reflect the income you have received for services you have either already provided or undertaken to provide.

5.       Pay the June quarter superannuation

Superannuation, if paid on time, is deductible when paid. Since you have to pay the 9 per cent superannuation by 28 July, bring it forward a month and pay it now, so you can claim the deduction within this financial year.

6.       Capital Gains Tax (CGT)

Minimising your CGT is often about timing. Ensure the asset has been owned for at least 12 months. If you already have a capital gain, are there any investments making a loss that you can sell? Do you qualify for any capital gain rollover relief concessions?


Let’s sharpen up your business’ tax planning strategy! Get in touch to schedule a session with one of our SME tax experts today!