Your most popular EOFY questions, and answers

Taxes could be one of the only two guarantees in the world of finance however this doesn’t mean that there’s ever a guarantee about them.

The looming approach of the final year of financial reporting (EOFY) will mean that the majority of small-business owners will be seeking the assistance of a professional accountant to make sure they have their finances in good working order. To make the most of your time with them, we’ve talked to two renowned small business accountants who have provided their most frequently asked questions about EOFY from their clients and give you an early start.

Q. How can I claim my vehicle?

There are many ways to do it. One option is to claim it on the kilometre allowance, which will reimburse the cost to your company and does not impact your income for you as an individual.

There are requirements for a logbook. But, if you’ve got an account of your appointments and activities through your email, that can be enough to back up your claim.

Q. I’ve been making some decent money. Is it worth buying an automobile at the close of the year to save tax?

When you are buying a car your decision should be about cash flow and not about tax. You won’t gain a significant advantage from purchasing a vehicle towards the close of the trading year. It is better to consider your cash flow at time of year’s beginning in order to maximize your allowance for depreciation as well as any interest.

Q. I’ve got no cash. How can I make my payment for tax?

You’ll need to agree to some type of arrangement for payment. There are many ways to go about it. You can call the tax department to arrange a payment plan but you will be charged interest and penalties are imposed for late payments.

Another option is that you can approach companies that offer tax pooling. They’re able fund your tax bills through a pooling arrangement and the interest rate is often a lot less than the tax department. It’s also a lot more flexible.

A small business loan is a effective alternative.

Q. What tax do I be required to pay?

There is no simple answer that can be standardized because it is wildly different according to your business structure as well as the taxes you’re legally obligated to pay, and the type of business that you are in.

We usually recommend that our clients save roughly 20-25% of their turnover to help cover tax on income or GST Accident Compensation Corporation (ACC) charges and other small surprises during the year.

Q. Do I need to be GST registered for the following financial year?

Again, the answer varies for each business owner based on the industry, market and turnover.

You are able to register on your own in the event that you’re planning to cross the threshold, or are engaging in an activity that requires GST includes in the industry costs as a standard.

Q. Do I need to perform a stocktake?

The short response is yes. There is an exemption which lets those with low valuations of stock to just make an estimate of the inventory they have on hand. However, if you are in the business of selling products, it is important to know precisely how many items are available to sell.

This method also detects SLOBS (slow-moving and obsolete stocks) which allows you to dispose of it and not order it once more, which will improve your cash flow.

Q. Can I do my EOFY taxes myself?

Yes, you can however, can you do it correctly? Today’s software lets you easily track profits and losses, and to file a tax return with your tax authorities. However, it doesn’t tell you what you are allowed and should not claim, and does not take a deeper analysis of your overall financial situation.

Are you looking to make sure that everything is in order this tax time? Consult your accountant about making sure you’ve checked all the right boxes.