25 / January / 2019

7 tax planning tips for better tax outcomes for business owners


Posted 25 January 2019

7 tax planning tips for better tax outcomes for business owners

Article by John Riseley, SRJ Walker Wayland

Too often, we find that new clients have experienced less than ideal tax experiences and outcomes in the past.

When we dig into the reasons for this, it usually boils down to insufficient collaboration between the business owner(s) and their professional advisor(s).

Most often, they have left things to chance and hope. There has not been the will to invest time and effort into having the necessary discussions that lead to success with tax outcomes.

The following seven tax planning tips will help you manage and plan your tax better: and that’s the ‘secret’ to creating better outcomes for your business.

But first a little more about the importance of working with your advisor…

The importance of collaborating on tax planning

Although the Australian tax system is not straightforward, tax management is a reasonably simple process when you collaborate with your professional advisor.

You, as the business owner, know your business goals and targets better than anyone; and your advisor’s expertise is in structuring businesses and transactions to achieve optimal tax outcomes for clients.

So, unless you work together in a partnership to optimise outcomes on an ongoing basis, things probably won’t turn out as well as they otherwise could.

Poorly structured businesses are difficult and costly to re-structure; poorly structured transactions cannot be undone; and adverse tax outcomes cannot be retrospectively remedied once the end of a financial year has passed.

Even the most straightforward aspects of tax management, such as effectively managing Pay As You Go Instalment requests from the Australian Tax Office, are difficult if the key people are not across the numbers.

7 tax planning tips to start working on today

If you have not experienced a successful partnership with your advisor, give consideration to the following tax planning tips for more successful outcomes:

1. Prioritise your time

Be prepared to invest your time into your tax affairs. It’s an important aspect of your business that should be afforded regular attention.

2. Budget a consultancy fee

There will be a cost and this should be built into your planned expenditure. Rest assured, with the right advisor, it’s money well spent: the benefits will far outweigh the costs.

3. Schedule an introductory session with your advisor

You will need to discuss your needs with your advisor, together with your budget. You should also agree the scope and timing of works and the associated scheduling.

4. Always pick up the phone

Ensure the arrangements you make with your advisor enable uninhibited communication. Always pick up the phone, particularly in relation to material transactions.

5. Have a robust pre-financial year-end review

This will generally include the modelling of tax positions with the status quo; considerations of alternative improvement options; and the implementation of agreed actions, including the completion of any required documentation.

6. Hold meetings with your advisor

Booking a meeting and allocating the required amount of time to it creates great focus for all.

We often find that, because of this focus, conversations flow better and there is a greater level of exchange of information between parties. Strategies can be improved and produce better outcomes.

7. Remember you don’t know what you don’t know

The tax rules are complex and have many moving parts which may be relevant to any business decision.

Your professional advisor is highly trained, with a team behind them experienced in customising business strategies. For the best results, use this expertise.

What next for your tax planning?

If you, as the business owner, follow these seven tax planning tips but your advisor is either not responsive or not capable of meeting your needs, perhaps it is time for a change.

Your business advisory firm should ensure that advisors are always there for clients as and when events present themselves.

That way, there are no surprises when lodgements are finalised: they have been planned for up to 12 months beforehand.

So the relationship between you and your advisor is crucial: and tax strategies work best as a collaborative partnership.

If it’s not working out, changing your relationship can reap benefits in the future.

Find out more

If you would like to find out more, SRJ Walker Wayland can assist with a range of tax and business planning matters. The team is ready to assist you in optimising profit performance by setting targets, forecasting outcomes, monitoring performance against forecasts, adjusting strategy and, ultimately, succeeding in business.