In 2021, we have experienced the ongoing effects of the Covid-19 as we slowly adjust to a new normal. Reflection on the year is a great opportunity to review initial plans and objectives factoring in the impact of the pandemic. It’s been a challenge to anticipate what will happen next, but none the less, planning is still an essential part of any business. The year has flown by and we are fast approaching the end of the 2020/21 financial year. Each business is different, but we endeavour to put you first and cater to your business’ needs. As we get closer and closer to the end of the financial year, it becomes a very opportune time to revisit how your business is progressing.  

What’s important is that you and your business are prepared for what the next year has to bring. We cannot emphasise enough the importance of how tax planning can lead to achieving this objective. When deciding whether you will take up the opportunity to review your position, you should consider some of the key outcomes of tax planning: 

  • Ensuring you are minimising the tax you pay; 
  • Keeping cash flow front of mind by understanding your future cash flow obligations; 
  • Maintaining compliance with tax legislation and other governing body requirements; and 
  • Establishing a clear path for the coming financial year. 

There are the standard tax saving strategies you can consider implementing, such as: 

  • Making super contributions, 
  • Writing off bad debts; 
  • Pre-paying expenses (subject to prepayment rules); 
  • Reviewing invoicing; and 
  • Scrapping obsolete stock and/or plant and equipment. 

Along with compliance obligations to be dealt with such as: 

  • Distribution resolutions being signed off pre 30 June; and 
  • Division 7A matters reviewed and dealt with. 

This also serves as an excellent time to consider the relevant stimulus measures and other options available.  Our role is to make sure you access the support available to you but at the same time measure the impact this will have on your financial and tax position. 

In the lead up to the end of this financial year, you should be considering the following: 

  • The JobMaker Hiring Credit eligibility and subsequent cash flow implications 
  • ‘Temporary loss carry-back’ provisions 
  • ‘Temporary full expensing’ – building on the previous instant asset write-off and accelerated depreciation measures 
  • 6–month extension from 31 December 2020 to use or install second–hand assets acquired under the Instant Asset Write-off.   

The next few months are critical in assessing and reviewing your business with the involvement of Tax Planning. Davidsons are able to assist you through this process to improve your business objectives and financial success.  

To discuss your 2021 tax planning, make sure to get in touch with your Davidsons team member or contact us at info@davidsons.com.au for more information before 30 June 2021. 

Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.