Your most popular end of financial year questions, and answers

Taxes are perhaps one of the two most important things in the world, but this doesn’t mean that there’s ever a guarantee about them.

The imminent close of the financial year (EOFY) is a time when many small business owners will be enlisting the help of a professional accountant to ensure all their financial affairs are in order. To help you make the most of the time you spend with them, we’ve talked to two leading small business accountants, who have given their top queries regarding EOFY with their clients, so you can get an advantage.

Q. How can I claim for my vehicle?

There’s many ways to. One option would be to claim it as an allowance for kilometres – which will reimburse the cost to your business , and is not a tax deductible benefit for your personal income.

There are requirements for the logbook. However, if you have an account of your appointments and actions via your email, it could suffice to prove your claim.

Q. I’ve made an amount of money. Should I consider buying an automobile at the end of the year in order to avoid tax?

When you purchase a vehicle you should make the purchase about cash flow instead of tax. You won’t gain a significant benefit by buying a car towards the close of your trading year. You should consider your cash flow at starting of your year to maximize the amount of depreciation allowance as well as any interest.

Q. I’ve got no cash. How am I going to be able to pay for my tax bills?

You’re going to have to sign some sort of payment arrangement. There are several ways to go about it. Contact the tax department and set up a payment plan but the interest is charged as well as penalties if you miss your payment.

There is another option: you can approach companies that offer tax pooling. They can fund tax obligations via a pooling agreement and the interest rate is often significantly lower than taxes paid by tax departments. Additionally, it’s more flexible.

A small business loan is a effective alternative.

Q. What amount of tax will I be required to pay?

There isn’t a quick, universal solution to this because it differs greatly depending on the structure of your business and the tax you are required to pay and the field you operate in.

We generally recommend that clients save between 20 and 25% of their earnings to with taxation or GST Accident Compensation Corporation (ACC) levies , and any small surprise all through the year.

Q. Should I be GST-registered for the coming financial year?

It is true that the answer varies for each business owner , based on the industry, market and turnover.

You are free to sign up if you’re expecting to cross the threshold or engage in an activity in which GST can be included into your industry costs as a standard.

Q. Do I need to perform an inventory?

The simple solution is yes. There is an exemption which allows people with low value of inventory to estimate the stock they have available. However, if you are involved in selling products, you should be aware of the number of items are available to sell.

The process also flags SLOBS (slow-moving and out-of-date stocks) which allows you to dispose of it and not order it again, improving your cash flow.

Q. Can I do my EOFY taxes myself?

Of course you can however, how do you go about doing it right? Software available today lets you easily track an income and loss and file a return with IRS. However, it doesn’t tell you what you can and aren’t claiming, and doesn’t take a closer examine your overall financial situation.

Do you want to do it right this tax time? Consult your accountant about getting all the necessary boxes checked.