Sadly for many businesses around the world, the issue of tax planning will not be high on the list as survival took centre stage due to COVID-19 in this financial year. Nonetheless, we still need to consider tax issues with the 30th June year end fast approaching. Here is a quick list of some of the issues to consider for both business, investors and individuals that may be able to take advantage of.
Individuals can contribute a maximum of A$25,000 as tax deductible contribution to your Superannuation where the tax payable would be 15% rather than your personal rate of up to 47%. If you or your employer have paid less, consider topping up to the maximum claim before the year end. This can be useful for foreign based landlords that have excess rent over expenses.
You may also be able to contribute more than $25,000 in superannuation this year if you have not claimed the maximum in 2019. Terms and conditions apply including a superannuation balance of less $500,000.
Asset Write Off
The Government has announced a temporary increase in the Asset Write off limits from A$30,000 to A$150,000 up to the 30th June 2020, so if you need any major equipment in your business then an early purchase may also help your tax position.
If you need a deduction, then accelerating any projects to prior to 30th June can assist you get a tax saving this year rather than next which might help your cash flow. This may also allow you to negotiate harder or assist suppliers and contractors that may need the work if impacted by COVID-19.
Write Off Bad Debts
If you feel that debts are unlikely to be repaid, formally writing them off before the 30th June may mean that you get some tax benefit as well.
As with all things, check with your advisor before acting on this advice to ensure it suits your personal circumstances. For more information, click here to book a consultation with one of our accountants.