It’s all About the Timing & Quality of the Advice
As a small business owner you work very hard for your money and being successful means you will make a profit. After all, if you don’t make a profit you may as well be an employee and do without the headaches and responsibility that come with managing a business.
It’s surprising how many small business owners do not rate obtaining proactive and timely tax advice as an important way of safeguarding more of their nest egg.
Let’s face it if you only see your tax accountant post 30 June, you have effectively sealed your fate and given a large share of your hard earned cash to the ATO.
Don’t get me wrong, we all need to pay our fair share of tax, but as a business, you need to seek out that savvy tax advisor who can help you to legally, yes I stress legally minimise tax and maximise your earnings after tax.
What is paying too much tax for a business? Well, I can be blunt here if you are paying more than 30% tax something is seriously wrong.
What are the causes of business owners paying too much tax?
- Bad and or incomplete record keeping
- Having the wrong business structure (if you are a sole trader and your business is providing you with a net profit which sees you placed in a tax bracket above 32.5% then you are in the wrong structure given the company tax rate is 27.5%)
- Missing out on small business tax concessions – the ATO is constantly updating its rulings and your tax advisor needs to be ahead of the curve ball on this stuff
- Not seeking out a pro-active tax advisor who you consult with regularly to effectively assist with
- timing of capital purchases and sales,
- making use of losses,
- bringing forward expenses and deferring income
- considering contributions into superannuation (only taxed at 15%)
Effective tax planning is about integrating tax within your overall business planning for achieving both business growth and your personal financial goals.
I could go on with strategies, but they are part of our intellectual property, after 40 years combined experience in the field we guarantee to save you tax or your money back! (Unless of course you have no tax to pay because you haven’t made a profit!)
Accounting Advisors Case Study
In the last financial year Accounting Advisors saved one small business $111,752 in tax. How did we do this?
Some of the strategies included considering the business as a whole group including superannuation fund, company, trust and individuals. We were able to make the most of current tax laws, unused superannuation cap rules and we now have one very happy camper client.
My final tip is this:
A cheap accountant who doesn’t do any tax planning with you, can in reality become really expensive, so do yourself a favour and don’t consider fees as costs but as valuable business advice that helps you to grow your nest egg.