Having a solid taxation strategy is essential for all small and medium enterprises (SMEs), as it helps to maximise return on investment, reduce ATO exposure and secure the long-term viability of the business. Business owners should seek the advice of a tax professional to get their taxation strategy right from the get-go.
Because strategic tax planning is all about making the best possible choices after considering all available options, a business owner should look at what their objectives are from beginning to end and for everything in between. This will help to avoid costly mistakes and unexpected tax outcomes, plan for sustainable cash flow and recognise opportunities that can be leveraged before the end of a financial year.
The first strategy that should be considered is the type of business structure. This is an important decision as it sets the foundation for asset protection, tax liabilities, the cost of running a business and the ability to maximise profits. Furthermore, unnecessarily complex business structures can overcomplicate tax obligations.
During the course of a business’s lifecycle, other complicated tax issues that should form part of the taxation strategy include capital gains tax on sale, depreciation concessions, debt forgiveness implications, income tax concessions,, employee superannuation, payroll tax and more. Understanding the timing of tax liabilities is also important to manage business cash flow.
When winding up a business or preparing it for sale, succession planning should be included in the taxation strategy to protect wealth and minimise taxes on exit.
Abbotts have the experience and expertise to ensure that your taxation affairs are in order and can recommend strategic plans capable of achieving the best possible tax efficiencies. Get in touch to find out what kind of difference we can make to your small or medium enterprise.