Small business tax time


24th June, 2021

Make sure your small business smashes tax time this year

Hear from the small business tax experts to get a wealth of tips and insights into getting through the end of financial year period unscathed with this special webinar.

As we approach the end of June, many small businesses will already be deep into their end of financial year processes, including stocktakes, chasing overdue debts and trying to get all of their financial records in order.

All-in-all, this can amount to a lot of stress and sleepless nights for owner-operators, as well as the advisors they work most closely with.
That’s why MYOB and SmartCompany recently released a free webcast, featuring experienced business owners and tax experts, to help make sure small business owners have all the information at their disposal to streamline this massive amount of work.

Forming a backbone of this discussion was a true powerhouse of expertise in the forms of Stacey Price, founder, BAS agent and chartered accountant at Healthy Business Finances, Sarah Rudd, founder of lifestyle brand Caye Life, and Caroline Rawlinson, chief financial officer for MYOB. Their conversation, spanning how to account for unusual cash flow, grants, tax incentives and finding the right tax and bookkeeping advisors, is available for you to tune in on today.

But before you do, here’s a taste of some of the value on offer in this tax time special webinar.

When it comes to business tax, the devil is in the detail

Price, who has a wealth of experience in advising on business tax, bookkeeping and accounting, kicked off the discussion with some useful insight into managing the books in unusual times.

Whether you’ve had a stellar year or an annus horribilis, she says, the most important thing you can do when it comes to business taxes, is make sure you’ve got your entire cash flow tracked and coded to a tee.

“The same questions are being asked by all… business owners and it’s really around cash flow,” said Price.

“To prepare for end of financial year, really understand the payroll side [of your business], because during the past 12 months, a lot of employees have been stood down, the business may or may not have received Jobkeeper payments, there’s been a multitude of grants (whether that’s on a Federal or a State level), and each of those really need to be looked at in an independent view of each other, because there are different rules around each of those grants.

READ: Better invoicing means healthier accounts at EOFY

“And at times, business owners have had to prop up the business with their own cash flow, so their own personal cash flow, which again is nothing like we’ve seen before in the past eight years.”

The concern Price raises is that there’s been a significant amount of money moving in and out of businesses from sources that wouldn’t normally appear in their reports, and that business owners haven’t had to account for before.

“So our best advice is, for all of those different types of payments, create separate income accounts,” said Price.

But don’t get hung up on what you call them, because as Price notes, accountants and the ATO have never been much for creativity in their naming conventions.

“Now, I’m an accountant, I’m not a creative person. So we call them ‘JobKeeper Income’, we call them ‘Grant Income’, it doesn’t have to be a fancy title. It’s just so that you know what you’re using it for.”

Healthy habits make tax time a breeze

In founding Caye Life and developing a new business concept from scratch, Rudd is keenly aware there were times she had to cop to her own lack of expertise.

And when it comes to managing business finances and recordkeeping, she’s found taking on the right advisors to be a massive time saver.

“I’m at the stage of business now where I’ve got a bookkeeper and an accountant, so they manage my online platform,” she said, although even with these resources in place, Rudd knew she had to take things a step further.

“This financial year is the first time I’ve ever done a tax planning session with my accountant,” she said. “So we did this at the end of April, early May, and I guess this is incredibly helpful to understand the position I was sitting in coming into the end of the financial year.”

As Rudd says, it’s all about building in those healthy business habits.

“In terms of running the business successfully, I guess I’ve learned that I’m going to have good financial healthy habits throughout the year.”

Other habits that can get your business ahead of tax time include setting up online invoice payments, making it easier for your customers and clients to pay you on time, and streamlining your payments out of the business, so you’re able to better track and plan cash flow every step of the way.

Explore any incentives and deductions available to you

Not only has there been a stack of government-led grants available over the past year or so, there have also been changes and additions made to tax schemes and incentives that could make a big difference when it comes to your business’s tax return.

The first thing to note here is that, of course, you’ll want to consult with a financial advisor and tax specialist before making any decision that could impact your position, but the webinar includes some handy pointers from MYOB’s Rawlinson along the lines of things to watch.

“So the Instant Asset Write-off scheme — we’ll start with that one,” said Rawlinson.

“Put as simply as possible, this is where eligible businesses can claim deductions for assets that they’ve purchased and installed ready for use [by the cut-off date] … both new equipment or secondhand equipment and assets.

“If you’re eligible, and you’ve purchased new equipment … you can immediately deduct the entire cost of the asset in its first year of use. What this means is you have higher expenses, and so you pay less tax.”

READ: What you need to know about claiming the Instant Asset Write-off

Of course, the Instant Asset Write-off scheme, which has been relaunched as Temporary Full Expensing, isn’t the only incentive worth investigating this end of financial year, and the experts featured in the webinar go on to discuss several more.

In this free webcast from MYOB and SmartCompany, we’ll help you gain the skills and knowledge to smash tax time, and turn a stressful task into an advantage for your business. Learn more today.