Essential Tax Planning Strategies for EOFY

Thank you to everyone for attending our insightful discussion with Advivo Partners, Dale Edwards and Chris Morris, as well as Manager, Fred Chang on the topic, ‘ Essential tax planning strategies for EOFY’.

The discussion was focused on looking at essential tax planning strategies you can implement before 30 June to set you up for the new financial year ahead, including capitalising on opportunities that may be available and tips on how to pivot and adapt. We shared insights on opportunities that may be available and tips on how to adapt and position you and your business for success in the highly competitive market.

For the upcoming 2021/22 financial year, the following legislative changes have been announced:

Temporary Full Expensing

  • Was extended to 30-06-2023
    • All businesses using General Depreciation Pools for tax will need to write off entirely on 30 June 2021.
    • MV depreciation cost limits are increasing from $59,136 for the year ended 30-06-2021 to $60,733 for the year ended 30-06-2022

Temporary Loss Carry-Back

  • Has been extended another year to 30-06-2023.
  • Allows losses incurred by companies to carry back to offset tax previously paid for the 2018-2019 and later years, resulting in a tax refund.

Superannuation Guarantee

  • Increased from 9.5% to 10% from 1 July 2021. Will continue to increase by 0.5% each year until it reaches 12% in the 2025/2026 Financial Year.
  • Review employment contracts to see if staff are inclusive of super or plus super and adjust accordingly. Beware business culture impact of reducing staff take-home pay if they are on inclusive contracts.
  • Ensure payroll software will process new rate correctly. Xero will update automatically.

To ensure you’re on the right track for the new financial year and increase the success of your business, a few tips to look at with your business could be:

  • Defer Income / Bring forward deductible expenses.
  • Understand the financial/cash flow impact ahead of time and plan for it.
  • Don’t put the cart before the horse – separate business cash from personal.
  • Understand whether your business should be cash or accruals for income tax?

The discussion also addressed the latest superannuation updates:

Concessional Contributions

  • Pre 30 June – Need to be accepted by Small Business Superannuation Clearing House by 22nd
  • Catch-up concessional contribution – Utilising prior year unused concessional contributions
  • New concessional contribution cap post 30 June
  • General transfer balance cap set to rise to $1.7m

For Pensions

  • Ensure minimum pensions paid for 2021 prior to 30 June
  • Advise trustees of 2022 pensions required and frequency. The correct treatment of amount above the minimum

Other Changes

  • Changes to work test
  • Real estate property valuations
  • Investment Strategy/deed upgrade
  • Deferred allocation strategies

For any further information specific to your business please email info@advivo.com.au.

See recaps from our recent events – CLICK HERE