Tax Planning for Businesses for the Year Ending 30 June 2022

Once again, the time to consider the management of your annual tax liability is fast approaching. For this reason, we have compiled a basic list of thought provokers for your review. Listed below are the implications for Businesses.

Tax Planning for the Year Ending 30 June 2022 

• Did you purchase a new vehicle and/or equipment, ready and installed for use before 30 June 2022? 

 

• Are you claiming only the business use of motor vehicles and is FBT managed with regards to private use? 

 

• Can you pay your final super guarantee for the 2022 financial year before 30 June 2022 in order to receive a tax deduction in the 2022 financial year? 

 

• Could you be eligible for the 120% deduction on eligible costs under the technology investment boost and skills and training boost?  

 

• Did you have a capital gain during the 2022 financial year, e.g., sale of shares, transfer of property etc? Have you considered any applicable stamp duty exemptions? 

 

• Are you able to prepay next year’s business costs, such as insurance prior to 30 June 2022? 

 

• Have you met your minimum Division 7A repayments for the year? 

 

• Is your company entitled to the loss carry-back offset and do you qualify to deduct other losses? 

 

• If you incurred any legal fees this year, please ensure that the bookkeeping descriptions clarify whether the cost relates to a day-to-day operational matter or a rare, out-of-the ordinary matter.   

 

• Were there any borrowing costs for establishing a new line of finance? 

 

• Have you separately identified any government fines? 

 

• Have you allocated a separate account for any items that might be considered entertainment for tax purposes? 

 

• Have your trust distribution and/or dividend resolution minutes been drafted for signature? 

 

• Do you need to pay your March and June 2022 PAYG Instalment or can these be varied down? 

 

• Are you able to defer invoicing until early July 2022? 

 

• Has your business managed any risks with regards to the ATO’s new interpretation of Division 7A and s.100A of the 1936 Income Tax Assessment Act relating to inter-group and inter-family Trust Distributions? 

 

• Could you reduce your taxable income under a deposit to a farm managed deposit?   

 

Other year-end planning points 

Some important things to review when closing off 30 June 2022: 

• Reconciliation of bank account as well as a review of any old outstanding cheques 

 

• Review of aged debtors and creditors and any corrections if necessary 

 

• Collectible status of your older debtors, do you need to write these off as bad debts? 

 

• Make sure you undertake a Stocktake at 30 June 2022 if applicable 

 

• Recording of any purchases and sales of non-current assets such as plant & equipment during the year 

 

• Loans between entities in your business structure agree on both sides 

 

• PAYG Withholding and GST at 30 June 2022 agree to the BAS as at 30 June 2022 after accounting for cash vs. accrual differences where applicable 

 

• Balances relating to hire purchase arrangements agree to the relevant finance repayment schedule 

 

• Wage and super guarantee expenses agrees to the amounts reported to the ATO through your BAS and your accounting software’s STP-compliant payroll system   

 

• Amounts on your profit & loss are supported by valid records 

 

Long-term planning points 

• Is your current business structure living up to expectations or is it time to reconsider its efficacy? 

 

• Does your trust deed need to be updated, for example for streaming purposes? 

 

• Do you have a business exit strategy?  

 

• Do you know what your business’ value is?  

 

• Does your business have a succession plan? 

 

• Do you have any expansion plans and are you familiar with any available government grant funding? For example, per this government website: https://business.gov.au/grants-and-programs#f:cloc=[South%20Australia]

 

In summary, there are a number of discussion points and tax planning opportunities available prior to year-end. If you would like a tailored set of solutions specifically for your circumstances, please contact our team at Thnk Advisory on 8333 7300.