Tax Planning - A Year-Round Activity
Another 30th June has gone. Perhaps you don't intend to think about tax planning until June 2016; however tax planning is an all-year-round event. If you have any questions relative to your income tax affairs, please don't hesitate to talk to us at any time during the year.
There are a number of matters that can be subject to ongoing review throughout the year. These include:
Is your business structure suitable for obtaining the best taxation benefits? This can be quite crucial if you're planning to sell your business and the small business Capital Gains Tax (CGT) Concession is going to come into play. This is a very important concession for small businesses. With some forward planning, businesses can ensure that they're going to try to avoid some of the traps such as net asset value of less than $6M. There's no tolerance given if the figure is slightly over $6M.
With some forward planning, the value of assets may have been able to be reduced to under $6M, e.g. within the superannuation contribution laws, making a higher contribution to superannuation or investing more in assets not included in the net asset value for CGT purposes, such as your own home.
Over the last couple of years, there has been a pleasing change of attitude by the government and the ATO relating to Trusts; however this doesn't mean that the ATO has become lenient in their treatment of Trusts.
It's very important to ensure appropriate resolutions have been documented and filed, loan repayments have been made on due dates and interest payments have been paid by due dates. In general, attention to detail relative to anything to do with Trusts throughout the year is a good policy.
Another important item for many businesses is stock.
Individual stock items can be valued by different valuation methods. You don't have to value all of your stock at cost. Some pre-planning can result in a significant change of stock valuations.
Research and Development
Research and Development (R&D) is another beneficial item within the Taxation Act that's available for companies that have spent in excess of $20,000 on R&D activities within the year.
To ensure appropriate records have been kept, documentation is very important and it's very desirable that we have a discussion with you, if you're contemplating an R&D project, before you commence the project, so documentation can be prepared and appropriate systems implemented, to ensure all time spent on the R&D project is recorded and costed and that direct expenditure is identified and appropriately recorded in the company's financial records.
If you have questions on any aspect of tax planning applicable to your business, we suggest that you don't leave it until June 2016 and have a discussion with us at your earliest opportunity.
Property Development Workshops
Are you interested in Property Development? If you are, you may consider attending PDW's free Introductory Property Seminar on 9 October 2015. There are limited spaces, so reserve your spot today! There is also a 3 day Sydney workshop which could fast track you to Property Development Success.
Small Business Incentive Scheme
A Small Business Employment Incentive Scheme will be introduced from 1 July 2015. Under this scheme, businesses who do not pay payroll tax (e.g. because they are under the payroll tax threshold) and hire a new employee on or after 1 July 2015, will be entitled to a grant of $2,000 for each additional employee. This grant will be paid on the first anniversary of the hire of the new employee and is designed to encourage the nearly 650,000 small businesses in New South Wales that do not pay payroll tax to hire new employees and expand their business. Further information can be found on the OSR website.
Have you signed up for a myGov account and linked it with the ATO? If you have, moving forward certain notices, such as your Notice of Assessment, will be sent electronically to your myGov inbox and we will not receive a copy. You will therefore need to check the notices and if you have any queries, contact our office for assistance.