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Accounting & Business Advisory

Should I pay company dividends before 30 June?

Consider paying dividends to shareholders before the end of the financial year to utilise the higher rate of imputation credits, which will lower post 30 June.

Should I write off bad debts?

Consider writing these off prior to 30 June to reduce the tax liability. We recommend talking to an RJS Professional before taking action.

Should I restructure my business to a corporate entity for tax reasons?

Depending on your circumstances, consider restructuring to a corporate entity to take advantage of the flat company tax rate. Companies with a turnover of $50 mil or less will be taxed at 27.5% in 2019 FY (this is expected to drop to 26% from 1 July 2020).

If accounting on a cash basis, should I pay creditors by 30 June?

If cash flow allows, creditors' accounts should be paid by 30 June to maximize deductions. The 12-month rule will apply to prepayments for expenses such as registrations, insurances and subscriptions. Accounts under $1,000 are excluded from the 12-month rule.

Can I delay the receipt of income to the following tax year to defer the tax payable?

Yes, if the businesses accountant is using the income on a cash basis method. Delaying receipt until after 30 June, will delay the tax liability by a full tax year. If however the business uses the accrual method, it is important to hold back issuing of invoices for the deferral to apply.

Can I use the work vehicle for private use to reduce the possible FBT?

The ATO continue to focus on the use of work vehicles for private use. Business owners may consider limiting the length per trip and total km per annum.

What is the depreciation limit for motor vehicles?

The instant asset The depreciation limit for the 19/20 FY is $57,581 – it applies to both the depreciation as well as the GST credits claimable.

How much is the instant asset write-off?

The instant asset write-off caps at $30,000. However, due to COVID-19, from 12 March to 30 June the instant asset write-off was increased to $150,000 excluding GST.

Is my audit insurance tax deductible?

Yes, the premium paid for audit insurance is tax-deductible. It also covers the cost of defence in the event of a claim. he ATO continues to bench mark businesses, with cash businesses becoming a major focus. Technology is becoming more advanced so be aware of information sharing and matching between government and non-government institutions.

Can I claim a tax deduction for payments made to workers/contractors

No, deduction will apply if the business does not meet its PAYG withholding obligations. However a deduction will apply to salary, wages, commissions and bonuses paid to employees. It will also apply to payments for the supply of services where a contractor has not provided their ABN.