End of Tax Year 2010 – Summary Of Tax Strategies For Business

Following are some suggested strategies for businesses to take PRIOR to the end of the current tax year at midnight on Wednesday 30 June 2010…

• Write off bad debts
• Attend to year end stock take, cash counts, etc
• Review asset register & consider a) scrapping obsolete or badly damaged stock and b) reassessing effective lives of assets on hand
• Consider bringing forward any necessary repairs
• Ensure superannuation guarantee obligations have been met and that contributions have been received by the fund;
• Pay donations, if any
• Where year end bonuses, directors fees etc are to be paid consider making appropriate resolutions committing to pay specific amounts to ensure deductibility in 2009/10, even where payment is made after year end
• Consider the timing of invoices for work in progress
• Consider pre-paying deductible expenses (small business taxpayers only)
• Consider bringing forward purchases of depreciable assets costing $1,000 or less for an outright deduction (small business taxpayers only)
• Consider transferring any unearned revenue from the profit and loss account to the balance sheet to highlight its non-taxable status.  The unearned revenue must be refundable if the business does not provide the services paid for
• Ensure any shareholder loan repayments required under loan agreements are made
• In relation to loans by shareholders to companies with turnover of more than $20M, ensure that loan agreements are in place so that the loans are not treated as equity

Action POST 30 June 2010 may include…

• Including Reportable Employee Superannuation Contributions (“RESCs”) on employee’s 2009/10 payment summaries

To discuss any of these issues further, please contact Peter H. Hunt & Associates here.