The government introduced legislation that will see the private health insurance rebate means-tested starting from July. In the next financial year, individuals earning under $84,000 and families earning under $168,000 will not be affected.
As income increases, the subsidy will decrease.
However, tax experts say if you bring forward that expense to this year – as some private health insurers are allowing – you may still be able to claim the rebate.
“I haven’t seen anything that would suggest you wouldn’t be able to get the rebate if you prepay this year,” Ray Cummings says.
Of course, any legislation the government introduces could expand on this – businesses are encouraged to seek professional advice.
If you have some stock laying around that hasn’t sold, then you can revalue it and save yourself some cash. Pitcher Partners’ Theo Sakell says you can do this any time before June 30.
“If you’re carrying stock that may be obsolete, or it may just be slow moving and hasn’t been moved for some time, for tax purposes you can probably adopt a lower value on that.”
“Anyone can do that to reduce the amount of closing stock, which therefore reduces the amount of tax profit and will obviously allow them to reduce their tax liability accordingly.”
If you plan on claiming any of your car expenses, experts say you need to keep a keen eye on how exactly you’ve calculated them and had them written down well in advance.
“If you’re claiming car expenses, and using the log book method, then you need to make sure it stacks up,” Theo Sakell says.
“Just make sure you have everything in order there and all written down. Missing details later on can be problematic.”
Last year, the government changed the way fringe benefits tax is calculated, especially when it comes to vehicles. Previously, the tax was calculated by multiplying the statutory rate of the car, but this has been replaced with a flat rate of 20%.
Tax experts say businesses need to determine if they should get rid of a car or two, and look at how cars are being placed in salary packages – businesses may find it’s not very tax efficient.
The other aspect here is to make sure you’re calculating FBT in the most efficient way. There are two methods – the 50/50 method or the register method.
The 50/50 method results in the total taxable value of meal entertainment come to 50% of total expenses, while the 12-week register method sees total taxable value equal the total amount of expenses. In this situation, that value is then multiplied against the “register percentage”.
Experts say you should look at either method to determine which is better for your business.
The government has really started cracking down on trusts in the past year, and experts say you need to be aware of what the changes are.
Many SMEs use trusts as part of their overall corporate structure – and Tristan Webb says entrepreneurs need to be aware of some changes when it comes to making distribution determinations. Prior to this year, trusts have had until August or so to complete these determinations. Now, they’re due by the end of June.
“Make sure you have a look and review your trustees, and then find out when they’re required to make a determination for the year. Sometimes that can be as early as June 28, but most of the time it’s on June 30,” he says.
“Whenever a trust deed requires that a determination be made, it’s crucial that it’s actually made.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
