Tax And Cash Flow Planning

Tax and Cash Flow Planning for Vignerons

When an accountant talks about Tax Planning what do they actually mean? As part of our tax advisory service we always offer strategic tax advisory, but it's important to note there are a lot of things that accountants cannot implement after June 30.

Cash and tax planning is particularly important for vignerons, who experience a wide gap between the expense of initial crop planting and maintenance, to the time of harvest and finally the finished bottle to be sold.

As we enter into tax year-end it’s important to consider your tax flow before June 30. Many vignerons would have taken up the ATO on their offer to pause PAYG instalments during COVID-19, then have experienced a post-covid bounce back where more cash is coming in and potentially more profit than anticipated.

It’s also worth noting that whilst the government cash boost and grant incentives are not taxable, the JobKeeper payments are considered as taxable income, therefore requiring careful planning before year-end.

Shannon Smit, Director of award-winning SMART Business Solutions, and Paul Cunningham, Associate, are skilled in accounting and advisory for the liquour industry, guiding their clients toward the most tax effective structures to ensure business strength is at the forefront.

Shannon gives a quick wrap up of how tax planning works and what you should expect when you engage an accountant in a tax planning strategy:

“If you want the most strategic tax outcome, tax planning will give you clear insight on what you can do or action before June 30 to provide a better tax outcome. With the 2021 Financial Year in its final quarter, we encourage you to consider discussing a Tax Planning strategy with us or your current accountant.”

Shannon Smit Director

Tax Planning explained

Tax planning is an exciting opportunity to unpack and rearrange your business structure, looking to implement tactical ways to distribute your funds and potentially action any changes in your current structure pre year-end such as paying a wage, making superannuation contributions, pre-paying certain expenses or considering investing in business equipment.

How can Tax Planning benefit me?

With smart tax planning, you’ll have the opportunity to plan better and implement actions to guide your final months of the financial year to operate in your favour, working toward minimising your tax and retaining more profits.

The overall goal of Tax Planning is to employ a strategic approach to your overall tax obligations with the intention to keep your effective tax rate as low as possible, ensuring you hang onto your profits.

When should Tax Planning be done?

April or May is the best time to do Tax Planning. This ensures your accountant has time to consider your business and your individual requirements and offer advisory on what actions you could take to assist with the overall goal of minimizing your effective tax rate come June 30.

Benefits of Tax Planning

Tax planning is critical for businesses and individuals who want to take control of their finances and position themselves for success. With a well-considered tax planning structure you can expect to achieve:

Improved cash flow
Better reporting
Improved goal setting and tracking
More control over your money
Improved decision-making

Your tax planning process doesn’t need to be complicated, but it should be thoughtful, never reactive. Working with your accountant you can evaluate your current tax strategy and find ways to optimise your tax situation further.

Questions?

As experts in the liquor industry, we welcome any questions you may have on how we can assist in creating a strong tax structure for your business.

Please get in touch on 03 5911 7000 or email us to set up a discussion.

5 May '21

Tax and Cash Flow Planning

Tax Relief for Small Brewers & Distillers to Support Jobs

Small brewers and distillers will benefit from $255 million in tax relief to support more jobs and investment as part of the 2021-22 Budget.

Tax And Cash Flow Planning