Business Tax Planning Tips FY2024

We are nearing the end of financial year again.  Here are some things to consider to reduce the tax bill or defer some of it to next year:

  1. Immediate deduction for assets (Instant Asset Writeoff) – The limit this year for small businesses (< $10m turnover) is $20,000 per eligible asset first used or installed before 30 June 2024. This also includes second hand assets. 
  2. Small business skills & training boost – Eligible businesses can receive an additional 20% tax deduction for training courses delivered by registered training providers.
  3. Paying employee superannuation. If you pay your June quarter liability before 30 June, then you are allowed the deduction for that financial year.  Note that the funds need to be received by the Superfund before 30 June.
  4. Defer income.  If your business allows, consider deferring some invoicing until July.
  5. Prepayments. If cashflow allows, consider paying things in advance up to 12 months, including rent, subscriptions, insurance.
  6. Bring forward expenses. Consider bringing forward some July expenses one month forward.  If you have a credit card with an interest free period, you can purchase items in June and pay for them in July.
  7. Write-off bad debts. Go through your aged receivables and consider writing off any old debts that are unrecoverable.  This will ensure that these invoices will not be added to your taxable income.  Also consider debt collection for these debts, as cash in your business is better than writing it off.
  8. Capital Gains Tax – Review your investment taxable positions in June.  Consider crystalising some losses to offset against any capital gains.

Other things to consider before 30 June:

  • Div 7A Loans – Review your accounting ledger to see if you have any directors loans owing to the company.  Consider either repaying these loans before 30 June, or forward planning with the minimum Div 7A loan repayment amount.  Also note that the benchmark interest rate has increased considerable in FY24 to 8.27%, up from 4.77% in FY23.
  • Trust distribution minutes – need to be completed by 30 June each year.  This involves determining the beneficiaries entitlement to income for that financial year.
  • Ensure any employee contributions for private expenses are reimbursed to the company, declared as wages, or declared as dividends.  Eg Private usage of car.
  • If any dividends are paid, ensure that minutes are recorded and dividend statements are prepared.
  • Ensure and FBT return is prepared & lodged for any fringe benefits you may have (eg car, entertainment, parking, company paid personal transactions).
  • Stocktake – if you hold inventory, please complete a stocktake at 30 June.
  • Depreciation Cost Limit – If you are considering purchasing a car, note that the Depreciation Cost Limit for FY24 is now $68,108, and $69,674 for FY25 which includes GST. Depreciation is capped to this amount if you spend over this amount on a vehicle.

About Ritchie Cruz

Ritchie has 20+ years experience in Public Practice, being trained as a Chartered Accountant in one of the largest 2nd Tier accounting firms in Australia. Experience also includes working in management positions in Medium to Large ASX Listed Companies. Recent experience includes working as a Group Financial Controller in medium size business going through the ASX listing process. Ritchie can offer big company management and reporting experience, to small & medium businesses.

Ritchie has a passion for small business start ups, helping clients grow from humble beginnings. See our small business start up page to see how your business can benefit.