23rd June, 2023
As Benjamin Franklin once said, “… in this world, nothing can be said to be certain, except death and taxes.” Nobody likes paying taxes, but it’s a necessary evil.
Although much of the world is undergoing economic pressure, there are some good signs in 2023’s economic outlook.
Nowadays, different rebates can ease that burden.
This can be especially useful for SMEs and are usually available at the end of the financial year (EOFY).
So, what sort of rebates should you — or your accountant — look at?
One area worth exploring is the use of technology in your business.
For example, you could leverage an AI logo generator to create professional and eye-catching logos for your company.
y investing in digital solutions like this, you not only enhance your brand identity but also potentially qualify for rebates or tax deductions related to digital adaption.
While this Victoria-based scheme ended in 2022, it’s worth checking whether anything similar is available in your area.
With this type of rebate, small businesses can claim money back if they have adapted areas of their business with digital solutions such as a Dialpad business phone system.
With worldwide digital transformation ongoing, it’s worth investigating whether your region offers anything.
If your SME works in the Australian science and tech space, this could be an attractive proposition.
The Research and Development Tax Incentive (R&DTI) is especially aimed at any business with a turnover of less than AU$ 20 million.
For R&D entities with turnover of less than $20 million, the refundable R&D tax offset is your corporate tax rate plus an 18.5% premium.
An old favourite, tax deductions due to charity donations have long been a good strategy.
By identifying a charity or not-for-profit organisation that aligns well with your company’s values, you can increase your deductibles on any EOFY accounts and help a good cause with similar vision to your business.
Another perennial tax favourite, this comes with a caveat now.
Of course, your business may have a lot of travel-related expenses, from car costs, flights to conferences or similar.
However, with so many people now choosing WFH or hybrid patterns, these claims come under closer scrutiny, so be honest!
Many common deductibles can reduce your annual tax burden. These can include yearly costs such as insurance policies (for business premises or staff) and any licences required for your business.
Ensure your accountant knows of all such costs so they can be deducted from your tax bill.
Does your business have any career development or educational programs for your employees? If so, it’s worth investigating whether your region offers any rebates based on the costs incurred.
Governments recognise the importance of such programs, so they may offer benefits to your business based on those programs.
One thing to note is that any programs must usually be recognised ones.
Additionally, if you’re looking to expand your technical capabilities and enhance your digital presence, you could also hire fullstack developers to support your business growth and innovation strategies.
Networking can play an important role in your business, as can membership in professional bodies within your industry.
However, those costs can soon mount up if you join multiple associations. Ask your accountant to investigate whether your memberships — or subscriptions — qualify for rebates or tax deductions.
If you or any of your staff make superannuation contributions, then it is worthwhile looking at any related tax breaks or rebates.
The valid amounts will vary greatly according to your geographical area and the contribution level.
Depending on the schemes available, some low to medium earners may also qualify for co-contributions from government bodies.
While most Covid-related schemes have ended, it is worth investigating when they ended and whether any still apply for the current financial year.
As many businesses are still in recovery mode, there may still be applicable schemes that reduce the tax burden when a company has not reached pre-Covid business levels.
Some businesses may be eligible for temporary full expensing. With this, you can deduct a part of some depreciating assets, but only as long as they were purchased during the ending financial year and are now in place.
This can apply to any business with a turnover of less than AU$ 5 billion per year, a benchmark that any SME can meet.
The EOFY is an ideal time to revisit bad debts. If you have taken all steps possible to claim the money owed with no success, you can consider writing off that bad debt and seeing if it affects your tax bill.
If you have made a tax loss in previous years, it’s also worth considering whether you are eligible for a refundable tax offset.
Of course, these are just a general guide for SME rebates, and your accountant should be aware of any schemes that you may be eligible for.
You should also be looking at any applicable business-related expenses that may be covered by tax rebates or deductions.
These expenses could be anything from the costs incurred if you purchase domain names to capital expenditure on equipment.
Government entities recognise that many SMEs are struggling in the current economic climate.
That means that as well as the traditional SME rebates and deductibles available, there are often new rebate schemes and measures in the federal budget.
Some of those may be time-limited, while others may have strict parameters such as annual turnover levels.