Tax – Year End Savers

With 30 June looming, this article offers some contemporary tax planning tips to optimize your 2015/2016 tax position:

Flu Shots!

As we move into Winter and flu season, have you considered paying for your employees to have flu vaccinations? As well as decreasing workforce absences (which in the case of the flu can be anything up to a week per employee which can dramatically impact overall productivity), flu vaccinations receive generous tax treatment as follows:

•  Fringe Benefits Tax – If an employer provides an employee with a flu vaccination by paying for the cost of the vaccination this is an exempt benefit which will not attract FBT. Although not every employee may take up the offer of free flu vaccinations, it must be offered to all employees in order to be exempt from FBT.

• Income Tax – Flu vaccinations, although generally not deductible when paid for by employees, are deductible when paid for by employers on behalf of their workers. As we near flu season and financial year-end, by offering flu vaccinations and having them done and paid for/invoiced by 30 June, you can optimise your 2015/2016 tax position – as well as providing a benefit that is typically much appreciated by employees.

Small Business Instant Asset Write-Off

The Small Business Instant Asset Write-Off is a great way for your business to reduce its 2015/2016 tax payable as we near 30 June. SBEs (businesses with a turnover of less than $2 million, including the turnover of connected and affiliated entities) can claim an immediate deduction (total write-off) for depreciating assets that cost less than $20 000 provided the asset is first acquired on or after 7.30pm EST on 12 May 2015, and first used or installed ready for use on or before 30 June 2017.

To get the benefit for this 2015/2016 financial year, the asset will need to be purchased and installed ready for use on or before 30 June 2016. Basically, all depreciable assets (including second-hand assets) used in a business are eligible for the $20 000 write-off – including motor vehicles, furniture, computer equipment, machinery etc. The Small Business Instant Asset Write-Off is a great way for your business to reduce its 2015/2016 tax payable as we near 30 June.

Super Contributions

Although not due until 28 July, some employers bring forward their compulsory April-June Superannuation Guarantee payments to before 1 July. By doing so, they improve their year-end tax position by claiming a deduction in 2015/2016. To claim a deduction in 2015/2016, the contribution must be received by the superannuation fund before 1 July.

However, if you use the ATO’s Small Business Superannuation Clearing House, the Superannuation Guarantee payment for deduction purposes is taken to be made when received by the Clearing House. Payments other than Superannuation Guarantee contributions such as ‘salary sacrifice’ payments are not considered to have been made until the date the superannuation fund receives the payment, even if you use the Small Business Superannuation Clearing House. In order for these payments to reach the superannuation fund by 30 June 2016, they must be received by the Small Business Superannuation Clearing House no later than 6:00pm (AEST) Thursday 23 June 2016.