Increase in the instant asset write off: The instant asset write off for assets costing less than $25,000 that has previously been available to businesses with a turnover of $10 million or less has been extended. Assets costing less than $30,000 acquired from 2 April 2019 to 30 June 2020 by businesses with turnover less than $50 million will now be eligible for the immediate tax write off. If you are committed to buying an asset, consider bringing forward the purchase and installation to prior to 30 June 2019 to enable you to claim the full amount earlier.
Pay quarterly super: Super Guarantee contributions must be paid before 30 June to qualify for a tax deduction in the 2018/19 financial year. You might consider bringing forward the June quarter contribution payments. We recommend allowing plenty of time for it to reach the super funds.
Bad debts: Review all your bad debtors. Write-off all those you think are unlikely to pay to enable a tax deduction this year. We recommend recording this in the minutes of the business after ensuring that all reasonable steps have been taken to recover the debt.
Prepaid expenses: Prepaying certain expenses such as rent, repairs and office supplies before year end can reduce your current year tax liability. If payments are due early next financial year, a pre-payment may entitle you to the tax benefit much earlier. The rules differ depending on the type of entity so please call us if you would like more clarification.
Stocktake: Trading stock should be reviewed before 30 June, either by a physical count or from a perpetual stock record system. Small Business Entities can be exempt from conducting a yearly stock take if the value of stock has moved by less than $5,000 during the year. Tax is paid on the value of stock at the end of the financial year so consider selling or disposing of slow moving stock so that it is not included in the count.
Franking credits: If you are planning on paying dividends out to shareholders before the end of the year, it is worth reviewing the company’s franking account to ensure that the company has paid sufficient tax to enable the dividends to be fully franked. This may mean paying ahead of scheduled payments in an arrangement with the ATO. For assistance with calculating your franking account balance, please contact us.