Your end of financial year opportunities
May 26 2021
End of financial year (EOFY) is fast approaching, and with it comes a fantastic opportunity to upgrade assets and build your business while reducing your taxable profits.
As we approach EOFY, it’s a good time for SMEs to take stock of what’s going on in the business. This includes how to best use EOFY to your advantage.
The instant asset write-off
There are lots of rules surrounding the instant asset write-off, including thresholds and the way the asset needs to be used prior to 30 June. Essentially speaking, eligible businesses can claim an immediate deduction on the business portion of the cost of the asset, so long as it is available to be used prior to EOFY. Assets may include vehicles, hardware such as computers, cash registers or machinery, software and even security systems. There is a list of excluded assets, so make sure you check those before purchasing anything or trying to claim.
Invest in your business
Generally, EOFY is a great time to invest in you and your business. Purchasing stock just before tax is due means you can minimise the time between spending and claiming the tax deduction, which is always helpful for SMEs. It’s also a good time simply because many businesses have sales and specials.
If you’re ready to invest in yourself, EOFY provides a good opportunity in some professional development. Again, courses and education may be claimed as a business expense, or, at the very least, can be paid for by the business.
Of course, a business loan is tax deductible, so if you need finance to invest in your business, there’s no better time to do so!
Check your insurances
Treat checking your insurance as EOFY strategic planning. As a SME owner, it’s crucial that both you and your business are covered properly. There are plenty of financial requirements to meet with EOFY, but there are also business opportunities to capitalise on, and adequate insurance is one area that should always be up to date. Again, you have a good idea of how the business performed recently, so you can take stock of your expenses. Can you afford to up your insurance if you need to – and, if not, what can you do to make sure you’re sufficiently covered? You may even be able to pay for your insurance in advance, and write next year’s costs off against this year’s tax.
Deal with excess stock
Just like the other businesses around you, EOFY can be a great opportunity to write off excess stock or have a sale to clear it for new stock coming. Just remember to advertise your sale properly to entice customers to buy your products or services.
For many business owners, EOFY brings with it a sense of organisational dread. But if you’re prepared throughout the year and know how to capitalise on the opportunity, June can actually put quite a large smile on your face. Enjoy the tax breaks!
If you’re thinking of investing in your business and need some capital, talk to a Bizcap lending specialist today. Remember, business finance is tax deductible too!