“The end of financial year presents opportunities for business owners to reduce their tax liabilities and ensure they are in the best position for the new financial year,” said Andrew Graham from RSM Bird Cameron.
As the national head of business solutions for the accountancy firm, we called on Graham to provide some concrete tips and tricks for SME retailers and he duly obliged:
Superannuation
Super is one contribution that can’t be claimed until it is paid. Business owners need to pay the contribution in sufficient time so it is banked by the fund before 30 June to claim it in the 2014 year.
Graham reports that this also applies to the business owner’s personal super.
Bad debts
Business owners should go through their debtors list and write off anything that is not collectible. These should be written off prior to 30 June 2014 to be eligible for a deduction.
Review carrying value of assets
If applicable write off any assets which are no longer used in the business.
Stocktake
A 30 June 2014 stocktake is required to determine the correct value of closing inventory and find any obsolete or damaged stock. Business owners can choose to value the stock at cost, replacement or market sale price depending on what is lower. Stock that is obsolete or damaged can be written off or reduced in value for tax purposes and claimed as a deduction.
Bring forward expenses
There may be some expenses, such as training, repairs, maintenance or prepaying interest (only for Small Business Entity taxpayers), that will be incurred and would be better brought forward.