This week, Business owners around Australia are getting smashed with BAS & PAYG Tax Bills. While there’s no way to avoid paying tax (other than earning no profit or doing something dodgy / illegal) here’s 5 ways you can experience some Small Business Tax Relief …
>> PAY IT <<
No one likes paying Tax but did you realise paying tax is actually a good thing! You pay tax on profits you make so a Tax bill is actually a measure of success. Our philosphy is to pay your fair share in tax, just, NOT A CENT MORE! So step 1, Pay Your Tax Bill, knowing your making a good profit.
>> VARY IT <<
Business is tough. There are good times & bad times. Many ups & downs. Now a PAYG Instalment notice for example is a pre-payment of tax NOW based on a snapshot of your PAST business performance. So if you’re having a tough year (compared to last) there’s a chance your BAS or even PAYG Installment can be ‘varied down’, which can equal major cashflow relief.
>> PLAN IT <<
The golden standard of Financial Control is to be able to pay every tax bill, in full & on time. The way to achieve this is knowing either 1) what percentage of every dollar you earn, needs to be put aside into a Tax War Chest or 2) what amount every week / month needs to be deposited into your Tax War Chest. Having a healthy amount of money set aside for profit, a rainy day and especially tax, can be the difference between stress & success in business.
>> ARRANGE IT <<
The ATO will occasionally allow a payment arrangements if you aren’t able to pay a bill in full and on time. Please use this option as a last resort .. but be aware that this should be a powerful reminder that you urgently need improved financial controls.
>> QUERY IT <<
If your tax bill is too high or you received the right bill too late, then in might be time to Change Accountants. Most business owners pay too much tax, because their current Accountant is a dinosaur. Here’s 10 signs they … Charge by Hour – Not proactive – Surprise bills – Slow to respond – Just do tax – Not tech savvy – You push them – Not entrepreneurial – $$ to ask questions – No Tax Savings.
If you think it might be time to change Accountants or you want to ask some questions about these 5 steps, let’s book in a time for a Cashed Up Strategy Call – https://inspire.business/chat/
>> BONUS PROFIT STRATEGY <<
Many business owners ask us, ‘How much Profit should I pay myself?’ Well, What if for every dollar in tax you paid to the tax man, you paid yourself a dollar in profit as the founder? Imagine if every time you got a tax bill – say for $20,000 – it felt like a great because it was also a trigger to pay yourself a Profit Bill! See if you’re not paying yourself in Profit AT LEAST as much as you’re paying the Tax Man, then Barnaby Joyce is making more money from your business then you are.
So if you just got blindsided by an unexpected Tax Bill, there’s 5 things you can do – Pay It, Vary It, Plan It, Arrange It & Query It. Good luck & talk soon – https://inspire.business/chat/