In this weeks Let’s Talk we discuss the best ways to beat those tax time blues.
Have a read to see what the experts do to to try make this time of year easier.
Mick Spencer, CEO, ONTHEGO
As a business, there’s a number of things we do at this time of year to “beat the tax time blues”. Number 1, there’s nothing like a little retail therapy, so we really ramp up our EOFY sales and incentives. You’ll find companies at this time of year are often looking for creative ways to expend unused funds, so we help them get their creative on by making it really engaging and super simple to order custom made uniforms and merchandise.
On a company level, July is really a time for us to take stock and review how far we’ve come in the last financial year. We have a tradition where we fly all staff into our Canberra HQ for two days of accomplishment sharing, planning for the year ahead, and a whole range of inclusive social activities. The energy and buzz created at these events gets everyone excited and energised.
We also run a number of philanthropic endeavours at ONTHEGO. Through our Make for Good program, we set aside tens of thousands of dollars each year for community charities and corporate social responsibilities. This time of year marks the mid-year period where we review the good work we’ve done, and start to plan out the initiatives for the rest of the calendar year. We involve staff in this process, which really promotes a feel good factor throughout the office.
Greg Baker, CTO, Daisee:
With EOFY approaching, SMEs are frantically evaluating what assets they can write off. Eligible assets include things like cars, vans, kitchens, machinery provided they cost less than $20,000. However, the exclusion of one particular asset from the instant deduction scheme is adding to the tax time blues. In-house software.
As it stands, in-house software is only deductible under the uniform capital allowances (UCA) rules or the simplified depreciation rules for small business entities. This lack of a tax break for SMEs means there is less of an incentive to invest in software and therefore innovate. By deliberately penalising low-tech companies, it is preventing them from delving into high-tech such as artificial intelligence which is set to have a hugely transformative effect on Australia’s economy. If we’re to establish ourselves as world-beaters in innovation then tax reforms are in order.
James Coyle, Chief Customer Officer, SuperEd:
At SuperEd, we’re passionate about helping people with their financial wellbeing and reducing the amount of stress that money brings, particularly around tax-time. The End of Financial Year often brings with it tax-time blues because the wellbeing of everyday Australians is largely shaped by their personal financial situations. Financial wellbeing is all about a sense of control and knowing you’ve made good decisions all the way through to tax-time.
As one of Australia’s leading digital advice providers, we want to make sure that everyday Australians feel confident when it comes to planning their financial futures. We’re always looking for ways in which we can help provide everyday Australians with financial coaching and guidance because advice should be an ongoing journey, not just a one-off transaction where assistance is only given upon reaching retirement. We feel very strongly that there should be more focus on people’s financial wellbeing and at this time of year, the tax time blues are just one manifestation of peoples financial wellbeing in that many don’t feel like they have full control over their financial situations and are more prone to making rash or emotional decisions around money. We think it’s critical to be able to ensure that all Australians are empowered to make better decisions and have access to better financial advice.
Paul Drum, Head of Policy, CPA Australia:
While some in business may feel a degree of trepidation at tax time, it’s a great opportunity to rule off on the old year and set your business up for the new year.
Most small businesses have support at tax time – around 95 per cent of businesses use a tax agent to help them meet their tax requirements. A CPA registered tax agent will alleviate your ‘tax time blues’ by helping you sort through your business’ tax obligations, making it less overwhelming.
For example, if you’ve just started a business, a CPA registered tax agent can give you advice on which professional expenses associated with starting the business are deductible, they can help ensure that the legal structure of your business is sound , and also ensure you choose the correct company tax rate.
A CPA registered tax agent is not only there to help you with your tax – they have the experience and knowledge to partner with you to help you achieve your business objectives, so take the opportunity to talk about your aspirations. Tax time then becomes a positive time for change and renewal for your business, rather than just a year-end compliance bugbear or burden.”
Matt Prouse, Head of Industry, Xero:
Recent research from Xero shows that more than half (52%) of small business owners see tax time as one of the most stressful times of the year — but it doesn’t have to be. There are ways to transform the end of financial year from scary and stressful to simple and streamlined.
Taking advantage of technology is a great first step, tools such as Receipt Bank and Expensify can help get your paperwork in order. Having your records in order will simplify summarising your income & expenses, your profit and loss statement and showing records of your asset purchases. Remember, you don’t have to do it alone – there are more than 25,000 registered accountants and bookkeepers in Australia ready to help you lodge your return.
Beyond considering whether you’ve met your targets for this financial year, take the opportunity to set your goals for the new financial year and look at ways that you can implement or improve processes and utilise technology to simplify your account keeping for the next 12 months.
Nicole Gorton, Director, Robert Half Australia:
Higher workloads and shorter deadlines are key contributors to workplace stress, particularly for staff around end of financial year. Many teams are under pressure to meet increased business expectations, produce more results, and in some cases with fewer resources, so it isn’t surprising this can cause added stress.
The negative outcomes of stressed and overworked employees cannot be underestimated. Workplace burnout is not only harmful to the employee at hand, it also negatively impacts the business. Stress can lead to less productivity, low staff morale, increased sick leave, and higher employee turnover, which all impact a business’s bottom line.
The most successful businesses have systems in place to effectively monitor and manage stress levels, whether in the form of seeking regular employee feedback or increasing temporary staff headcount to help manage high workloads, particularly around EOFY. Other company initiatives include offering employees increased sick leave, sabbaticals, or encouraging more social activities with staff outside the office.
Melissa Browne, founder of A&TA and The Money Barre:
If you’re a small business. Make sure you’re taking advantage of small business concessions. If your turnover is less than $10million you can choose to pay tax on a cash basis, write-off in full any asset that costs up to $20,000, pool assets and use simple inventory valuation methods. Don’t let your accountant be lazy and miss out on these sweeteners which can save you thousands in
Look into your crystal ball. If you know that next year you’re going to drop income because you’re going to take gardening leave, maternity leave or you’re going to have some major expenses, you might want to look at the timing of your tax deductible expenses. That’s because it may be worthwhile in this year to prepay expenses while your income is higher. This may include travel, insurance, interest on loans up to twelve months or insurance.