EOFY 2022 benefits. Are your SME clients maximising theirs?
The end of financial year is approaching fast. As an advisor to small business owners, brokers should be aware that tax time can be a time of stress, however, it can also be a time of gain.
The End of Financial Year period is associated with rushing to complete business taxes and hustling to update financial records. It’s also associated with end of year sales and discount options for small businesses.
These discounts can save your clients a lot of money if they are looking to maximise their efficiency and achieve business growth.
Besides the straight up discounts and savings there are a load of other benefits your client and their accountant can work with at tax time.
Let’s take a look at what they are:
Instant Asset Write-Off
The government has created a tax benefit to assist businesses. The $150,000 Instant Asset Write-Off provides businesses with an asset write-off of up to $150,000 and must be used in the year that the write-off is claimed. You can read more about this in our recent article, instant asset write-off gives business owners a tax break before EOFY.
It’s important to ensure your clients have a good accountant who can help them to manage their benefits at tax time. The accountant will be able to assist to maximise any tax-time benefits. Part of this involves any depreciable items. Depreciation is the accounting process used to ‘write-off’ the value of a physical or tangible asset over its useful life as a depreciation expense. This represents how much of an asset’s value has been used, over an allowable and agreed time frame. It allows companies to earn revenue from the assets they own by paying for them over a certain period of time.
This refers to the relief or benefit your clients can claim to reduce their income tax burden. It refers to the amount of tax liability that they, as a taxpayer, do not have to pay. This allows any business to better manage their cashflow. On a separate note, this should not be confused with a Tax Refund, which refers to the amount your clients receive from the government because the taxes paid have exceeded the computed tax liability.
Input Tax Credits
Any business purchase that your clients make that includes GST can be claimed as an input tax credit your client has used the product as part of their business expenses. They can claim a credit for any GST included in the price paid for things used in their business.
Maintain Competitive Advantage
One of the most important and often forgotten benefits your clients can achieve at tax time is to maintain a competitive advantage in their sector by upgrading and renewing machinery, equipment, and vehicles within their business. Tax time presents a myriad of benefits such as those listed above, and more, which can help businesses to get ahead and grow.
If it’s time for your clients to purchase a new business vehicle, upgrade equipment or machinery, get in touch with one of our friendly and helpful BDMs to make this process easy and fast.
Thornmoney can assist you with asset finance solutions or invoice finance for loans of between $10,000 to $2,000,000.
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