Some people might find this surprising but one of the most important services we provide as accountants isn’t preparing your tax return or annual financial statements, it’s tax planning. It may seem obvious to some, however to the vast majority of business owners, tax is something they worry about once the financial year is over. As the tax deadline looms, they begrudgingly compile their financial information and track on down to their accountant’s office for their annual visit. By the end of the meeting their taxes have been completed and they’re left to digest the bad news that a substantial tax liability will be due and payable in the coming weeks. Often the size of their tax liability comes as a total shock, possibly presenting owners with some cash flow challenges that could have all been avoided had adequate tax planning been conducted.
Does this story sound familiar to you? We’re always amazed by the number of business owners that have no idea that tax planning is a thing. That there are numbers we can review, actions we can take and long term plans we can make to reduce and/or better manage their yearend tax liability. The aim of the game is to be well informed and avoid surprises, to be ahead of the 8ball and ensure we utilise every provision available to maximise your tax position. However it’s essential to conduct said planning before the financial year is out because once the year is over, so is our opportunity to implement any tax saving actions.
Being proactive and taking ownership of your tax position will not only give you greater control over your cash and profitability, it’ll also empower you with the information to better run all aspects of your business, even those that seem to be out of your control.