Tax planning and other business obligations
- Nov 08, 2022
- 10 min read
True story. Our client, Alexi, runs a personal training business and her business is thriving. She knows this because she is very busy with her many clients.
Great scenario, right? We’d all like to be in that position, wouldn’t we?
Alexi knew she wanted to capitalise on this early success and most importantly not have a huge tax surprise.
She asked her Sleek accountant for some tax planning services. Her accountant extrapolated her profitability and her tax liability if she continued like this (and didn’t do anything) until the end of the financial year.
Then it was suggested that by spending some of the profits to buy equipment she could grow her business and effectively reduce her income tax bill.
Alexi’s accountant indicated she had enough money in the business to buy a new fully equipped van. And with a second van, Alexi could hire another personal trainer to bring in more business income in the new financial year.
Isn’t this a win-win scenario for any entrepreneur?
We know this is a simplified version but certainly highlights how, as a business owner, if you are better informed about your tax situation, you have options to mitigate them.
What is business tax planning?
Tax planning analyses the financial situation of income tax payable by your business to ensure tax efficiencies are met.
Under certain circumstances, it can reduce the amount of taxes to be paid and direct the money to growing your business.
It gives you a good idea of where your business stands and if there are any effective tax strategies your business can implement and take advantage of.
Why is business tax planning important?
Are you intrigued how tax planning can help your business?
Here’s why it’s so important –
1. May help reduce your tax liability
This means you genuinely pay the tax your business owes.
With business tax planning you can allocate some of the money that was going to pay taxes and spend it on legitimate ways to grow your business.
2. Helps you understand your tax
…and become a better entrepreneur and business owner.
There are heaps of tax deductions, credits and other provisions available to businesses.
Add in tax law changes as well, you can see how these practices can take advantage of every opportunity available to your business.
3. Invest in your business’ future
A tax plan helps you to make data-driven business decisions in the long term.
It allows you to calculate financial projections such as sales and cash flow. With information at your fingertips, you can make sound business decisions and see the effect of these decisions on your bottom line and tax.
4. Saves time and mistakes
Stay in control! As the end of the financial year approaches, you’re not madly scrambling to gather your accounts together.
Let’s just avoid that situation altogether, please
Business tax planning is an efficient way to get your records in order, regularly, so you can make informed decisions about your tax liabilities, plan for them and in some circumstances reduce them.
And more time to prepare, means less mistakes and stress!
Should your business have a business tax plan?
That’s a YES in capital letters.
It doesn’t matter what size business you are running or what stage your business is at, you can take advantage of it and grow your business.
With Sleek’s tax and accounting services, you can take a step back to focus on your business ventures. Our accountants provide tailored insights and guidance to meet your specific financial needs.
Get started today with Sleeks business tax planning service.
