Part One – The Nature of Tax Setting you and your business on the road to tax planning
There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.” ― Robert A. Heinlein,
Tax never sleeps – it’s always up and about looking to get you.
In business because you want to earn more? Ever wondered why so few people make so much from business and others don’t? That’s because a few understand how to organise themselves so that they can keep more, from their growing business or from their successes rather than giving it to tax man.
So, if you don’t want to read this document and consider following what is set out in front of you, you may
Pay too much tax
Have tax control your cash flow in your business and therefore stifle the opportunities you have
Lose control from time to time, and pay high late lodgement fees and crippling interest to the ATO
Run your business in a world of risk
This document isn’t about tax scams or loop holes, it’s about setting up processes in your business.
Things you must do first Home budget
We must consult our means rather than our wishes. ― George Washington
A home budget is the toughest financial document a business owner can complete. In business, a budget should be black and white, allowing for some cushioning. But a home budget must take into account a family’s character and culture, including the frivolous spending on things that may be part of the joy of being in a family. It must also be realistic. You already should have at least an idea of the income your business has, so you must also be realistic and occasionally apply the “need or want” rule at home. (If you want a home budget that we have prepared please download here)
Get a real business structure – preferably a company. If you are trading as a sole trader or partnership this can’t work. But while in the hands of someone who really knows what they are doing can work but generally we rarely see this.[/one_half]
[one_half]Have your accounts up to date
Do you really know the accounts are up to date?
Once you are on top of this, you must stay on top of the accounts in your business. Knowing how the business is performing so that you can effectively manage tax, isn’t a one-off thing, it’s something you need to be doing every week or month at a minimum.[/one_half]
Completing a home budget, getting the rights structure and staying on top of the accounts is all a lot of work – but do you want to give too much to Canberra?
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