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End of Financial Year Tax Planning Tips for Businesses

  • Ensure any eligible bad debts are written off correctly through your accounting software or the decision to write them off is documented correctly in a director’s resolution.
  • Consider the purchase of new assets costing up to $20,000 each (small businesses only – aggregated turnover of less than $10m). This concession has also been extended in the recent Federal Budget 2018-19 to 30 June 2019.
  • Ensure a full stock take is carried out, including scrapping obsolete stock (although not required for eligible small businesses).
  • Review your WIP to include only legally recoverable / billable amounts.
  • Pay employee super by 26 June or earlier to get the deduction this year (to be cleared to superfund by 29 June). If paying superannuation through a superannuation clearing house it is recommended making payment by 15 June (as it can take up to 10 business days).
  • If intending to claim for eligible R&D expenditure, total expenditure/deductions must exceed $20,000 in general. Registration with Government Department must be within 10 months of end of income year and prior to lodgement of tax return.

Recent changes to legislation

  • Small businesses (annual aggregated turnover below $10m) are entitled to an instant asset write off for assets (both new and second hand), costing up to $20,000 up to 30 June 2018. This date will be extended to 30 June 2019 as announced in the 2018-19 Budget.
  • The corporate tax rate will be 27.5% for 2018 and 2019 for base rate entities (annual turnover below $10m in 2017, $25m in 2018 and $50m in 2019). It will be progressively reduced from 27.5% to 25%.

If you have any questions, please don’t hesitate to contact Heather Moore on (08) 9254 6854.