EOFY Tax Tips for Small Business

There's only a few days left until it's the end of the financial year. Did you know that as a small business owner, there are a few things you can do before 30 June to reduce your tax payable for the 2017 year.

This blog outlines a few tips which are general in nature. If you'd like more specific advice tailored to your business, please contact us.

1. Purchase business assets under $20,000

If you purchase a business asset costing less than $20,000 before 30 June 2017, you could be entitled to an immediate deduction for the full asset cost. In order to qualify, you need to be an eligible small business and the asset needs to have been used or have been ready for use prior to 30 June 2017.

2. Prepay expenses

Business expenses paid before 30 June 2017 but relating to next financial year can be claimed as a tax deduction if you are a small business. For example, you can claim a full deduction this year if you pay for next year's insurance premium or subscriptions before 30 June.

3. Write off bad debts

Small businesses should take the time to review their debtors at the end of the financial year and write off any bad debts that are not recoverable. Be sure to document what the debts are and the efforts you have made to recover them prior to writing them off. Bad debts must be physically written off before the end of June to be deductible in the current financial year.

4. Employee super contributions

Payment of your employee's super contributions for the June 2017 quarter isn't payable until 28 July. However, if you instead pay their super before 30 June, the payment will be deductible in the current financial year. Note that payments need to be received by the super fund by 30 June to be deductible, so try processing payments a few days before 30 June.

5. Personal super contributions

For sole traders and partners in a partnership aged between 18 and 75, a deduction is available for personal super contributions you make towards a complying super fund if you've:

given valid notice to your super fund; and
any wage you earn makes up less than 10% of your total income.

Note that contributions made after 1 July 2017 will be subject to different rules.

6. Write off obsolete trading stock

The cost of trading stock still on hand at 30 June won't be deductible until the stock is sold or written off as unsaleable. Consider selling or disposing of slow moving stock before your annual stocktake. If any stock has been identified as old or obsolete, make sure it is written off in full by 30 June.

7. Make trust resolutions by 30 June

Trustees of discretionary trusts are required to make and document resolutions by 30 June 2017 on how trust income will be distributed to beneficiaries for the year. It is important this is done by 30 June to avoid negative tax implications.