To say things got a bit warm over the weekend would be like suggesting too much tax is an inconvenience. As the mercury soared, I stayed close to the air-conditioning while my thoughts were with small business owners.
Something we hear quite often from our new and prospective clients is that they are trying to grow and increase profits but it can feel like two steps forward, two steps back – on a good day.
Why? Well one reason is tax. And one of the reasons we at Inspire exist is because so many small businesses find that they are paying too much tax. That explains the demand for accountants that are committed to easing the tax burden so families can benefit from the business that provides for them.
As people come to this realisation, we are becoming more and more involved in businesses and the business of helping people achieve tax savings (to help give and spread an understanding of necessary steps, we’re making a webinar available to everyone who’s interested but more on that tomorrow).
Tax helps those that help themselves
So, the long held premise upon which the concept of tax was built was that it would help the powers that be provide public works and armies. This morphed into exploring (and probably conquering faraway lands), public buildings and satellite launches (I’ve probably skipped over about 1500-2000years here… to save time).
Here’s the interesting part: over the years (and centuries) governments around the world have become more and more creative when it comes to instituting new and interesting taxes. Yet the average small business owner continues to apply a “medieval” approach to insulating themselves against profit-sapping taxes. I’m not suggesting that an exotic array of tips and tricks need to be employed to ensure you don’t simply “give away” close to 50% of your profits in taxes.
However, let me just reinforce an important point. If upwards of 45% tax on your hard-earned profits seems steeper than your next electricity bill after a summer of stiflingly hot weekends – it’s time to test drive a new accountant .
Quick tip – to help minimise tax, check out the feasibility and benefits of structuring your business as a trust or company as opposed to a sole trader… and be pleasantly surprised!
If you’re not moving up, you’re rolling backwards
World champion basketball coach Pat Riley once offered that teams should think of themselves as a tennis ball on a hill. If they are not actively be propelled up the hill, they are actually rolling down the hill – there is no in between.
This absolutely applies to your business results in general and your tax situation in particular. A “she’ll be right” or “I’ll just keep plugging along” leads to the same curious ending as the example of a child opening a savings account with a $5 deposit, only find that at year’s end not only has the deposit disappeared in a puff of account-keeping fees but an amount is actually owing.
Quick tip – a profit improvement plan, carefully crafted by your accountant can safeguard your hard-earned returns.
Okay, there’s a break in the hot weather, you might want to give your business a break as well by calling us for a chat about how best to keep your cash in your pocket.