{"id":340,"date":"2020-06-08T16:57:36","date_gmt":"2020-06-08T08:57:36","guid":{"rendered":"https:\/\/www.thehorizongroup.com.au\/blog\/?p=340"},"modified":"2021-06-01T11:36:03","modified_gmt":"2021-06-01T03:36:03","slug":"minimise-tax","status":"publish","type":"post","link":"https:\/\/www.thehorizongroup.com.au\/blog\/minimise-tax\/","title":{"rendered":"Minimise TAX if you act before 30 June"},"content":{"rendered":"\n

It has been an extraordinary end to the 2020 financial year with many businesses flourishing and others being forced into hibernation due to COVID-19.<\/p>\n\n\n\n

The number one priority for most business owners right now is cash flow.<\/span><\/em><\/strong><\/p>\n\n\n\n

Tax minimisation & planning has never been more important ~ it’s critical to act before 30 June 2020.<\/span><\/em><\/strong><\/p>\n\n\n\n

With June 30 fast approaching you need to act quickly, and we encourage you to schedule a meeting as soon as possible to assess your options and the steps you need to take before the 30th June 2020.<\/p>\n\n\n\n

To assist you we have put together a guide with a list of strategies for you to act on below, click here for a checklist.<\/a><\/p>\n\n\n\n

The following list of tax minimisation \/ planning opportunities is not exhaustive and depending on your circumstances (including your turnover and whether you are on a cash or accruals method of accounting), specific conditions may apply to some of these suggestions.<\/p>\n\n\n\n

If you would like to discuss your specific tax planning options we urge you to contact us<\/a> today.<\/p>\n\n\n\n

Deferring Income<\/span><\/strong><\/h3>\n\n\n\n
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These strategies are only effective if they will not adversely affect your cashflow.<\/p>\n\n\n\n

Firstly, determine if you are on the cash or accruals method for tax purposes.<\/p>\n\n\n\n

Cash basis \u2013 taxable income is what is actually received less what has been paid for expenses.<\/p>\n\n\n\n

Accrual basis \u2013 taxable income is what is invoiced (regardless of when the income is received) less what invoices have been received for payment (regardless of when you pay them).<\/p>\n<\/div><\/div>\n\n\n\n

Delay invoicing<\/strong><\/h4>\n\n\n\n

Consider delaying invoices until after 30th<\/sup> June.<\/p>\n\n\n\n

A one month delay will mean you will pay tax in the next financial year.<\/p>\n\n\n\n

This may also mean that some clients will pay a month later.<\/p>\n\n\n\n

Must: review your cashflow before you do this<\/em><\/p>\n\n\n\n

Unearned income<\/strong><\/strong><\/h4>\n\n\n\n

Determine what income you may have received but not yet earned.<\/p>\n\n\n\n

So that it can be excluded from this year & deferred until the next year.<\/p>\n\n\n\n

Lump Sum Amounts<\/strong><\/h4>\n\n\n\n

Where a lump sum is likely to be received close to the end of a financial year, you should consider whether this amount (or part thereof) can be delayed or spread over future periods.<\/p>\n\n\n\n

Interest delay<\/h4>\n\n\n\n

Interest is generally income when it is received.<\/p>\n\n\n\n

If you do have investments that are going to pay interest, try to structure the payment to be received after 30 June.<\/p>\n\n\n\n

Bring forward Business Deductions<\/strong><\/span><\/strong><\/h3>\n\n\n\n

Prepayment of expenses \u2013 cash basis<\/strong><\/h4>\n\n\n\n

Consider pre-paying expenses prior to 30 June. A tax deduction is generally allowed where the payment is made before 30 June for services to be rendered within a 12 month period. Even paying expenses in June that ordinarily be paid in July could save some tax this financial year.<\/p>\n\n\n\n

Note: this strategy is only available if you have the cash-flow!<\/em><\/p>\n\n\n\n