Business Tax Planning – Why pay more tax than you legally need to?

Tax planning is an investment in your business success – because when it comes to tax, what you don't plan for can hurt your business. If you suspect you may be paying more tax than you legally need to, book a Tax Planning review with your client relationship manager

Business tax planning involves reviewing your business to ensure that your profits are being managed in the best possible way to legitimately minimise the amount of tax payable to the government each year.

Tax planning focuses on tax minimisation; and when done correctly, it is legal. The ATO describes tax planning as 'the right to arrange your financial affairs to keep your tax to a minimum'. Of course, tax planning strategies must be made 'within the letter and the spirit of the law' so as not to be considered tax avoidance or evasion.

Business tax planning is an all-year-round activity but generally takes place in the months preceding the end of financial year when a business owner's sensitivity to tax increases. However meaningful tax planning sessions rely on you maintaining accurate and up-to-date business bookkeeping records. Without perfect bookkeeping and financial records, your ability to plan for tax will be limited and inaccurate. If you need assistance with better business record management, you can learn more about our business bookkeeping services here.

Remember, tax minimisation does not mean that you eliminate paying tax altogether. In fact, if your business is not paying tax it could be symptomatic of an underlying problem within your business operations.

Our tax planning sessions form a key role in reaching your profit goals. We thoroughly examine the tax deductions that apply to your business and canvass all tax minimisation opportunities in the context of your business and personal circumstances.

The key benefit of business tax planning is that you will know the exact steps you'll need to take before year end so that your business retains the maximum amount of profit while legally minimising its tax liabilities.

You will also have an idea of your estimated tax liability well in advance of the end of financial year and tax payment deadlines. Business tax planning also involves taking stock of assets, considering the suitability of your current business structure and allows you sufficient time to prepare and utilise the various tax breaks available in the year under review.

Due to the ATO's compliance approach in relation to trust distributions, it is crucially important that careful planning is required to ensure you do not incur extra taxes and penalties that may arise from inappropriate distributions.

If you're ready to discover constructive methods and strategies to legally minimise your tax payable, we invite you to book your tax planning session with your client relationship manager on (03) 9974 8333 or via the below button.