Tax bills surge as Australia Taxation Office tracks SME payments.
“Ken Gunderson-Briggs, director of accountants at Gunderson Briggs, says in June some small business clients were hit with tax bills many thousands of dollars more than they expected. “Instead of paying $8000 in the quarterly instalment, they had to find more than double that figure.” Even well-run small businesses can find that impost on their cash flow a big burden, he says.”
It pays to be canny about cash flow.
“Principal at Gunderson Briggs, Ken Gunderson-Briggs, says payroll tax can be another cash flow trap. “There is a threshold but many small businesses aren’t aware of it, so they get caught out. Fundamentally, the profitability of a business is really about the cash it can generate in the long term.” Cash flow planning involves establishing the most effective business structure. Profit in one part of an operation can be offset by losses in another if the right structures are in place.”
When it’s Worth Starting a Family Trust.
“If family trusts are the new black, who do they best suit and do you need big assets upfront to make them worthwhile? Absolutely not, say advisers. It's all about what your assets are likely to grow to and the tax rates of trust members years down the track when you sell investments and incur capital gains tax (CGT), says Andrew Simpson, partner with accounting firm Gunderson Briggs.”