With the end of the financial year just around the corner now’s the time to get your affairs in order to ensure you don’t pay more than your fair share in tax.

At lumi.com.au, it’s our aim to provide small and medium-sized business owners with the knowledge and tools to add value to their business and build for the future. For example, if you are a sole trader with a turnover under $50M; paying up to 45% tax, it’s worth exploring the option of incorporating a company and paying under 30% tax. It is vital that you chat with your financial planner and lawyer to ensure your business is structured in the best possible way to minimise your tax and maximise your potential. 

With the government recognising the importance of SMEs to our future prosperity, several incentives have been put in place aimed at assisting small and medium business owners.

Here are three EOFY hacks that could help you optimise your tax payments this year while improving your growth and stability moving forward. 

Lumi is an online small business loan provider, you can learn about their multiple options and the team behind the name at lumi.com.au 

1. Defer income 

If you have received payment for goods or services but haven’t delivered them yet, you can use accrual accounting to defer recording the revenue until the job is done. 

While you will have to eventually pay tax on the income until you have completed your part of the transaction you don’t have to declare the profit. And since lower profits equal lower tax, you can use the extra financial headroom to invest in new equipment, maintenance or other improvement opportunities. 

To understand your options in this respect, chat with your accounting and legal adviser. Also, reach out to lumi.com.au to check your small business loan options, and ask about the unsecured business funding, which could give you up to $150,000 in 24 hours. 

2. Write off bad debts 

As many SME owners know all too well, some debts won’t ever be paid by the customer. In circumstances where you don’t wish to take action to enforce payment, one strategy is to write off the debt. 

While the loss of profit and the expenses incurred in providing the goods or service can be a source of frustration, you can make the best of the situation by claiming the bad debt as a deduction. Be sure to prepare evidence of the situation to be able to use it to minimise your tax. 

Your first point of call, just like with every financial decision, is to verify options with your financial and legal advisers; should they advise you to go in this particular direction, the loss of revenue might still leave you in a difficult situation. If that’s the case, consider talking to lumi.com.au about a small business loan that can keep you moving forward with as much flexibility as possible. 

Lumi.com.au offers unsecured small business loan options of up to $150,000, that could be approved in less than 24 hours and help you make the most of the instant asset-write off allowance.

3. Replace Equipment 

Thinking about upgrading your business equipment or other business expenditure? Ensure those purchases work even harder for you by making use of these government concessions: 

• Accelerated depreciation allows you to devalue certain assets faster. By claiming a higher depreciation value this financial year, you will be able to minimise your taxable income. 
• Immediate deduction of prepaid expenses: This can be useful in situations where you pre-purchase equipment, pay rent for business premises in advance or accrue other business-related expenses before you actually use them. 
• Instant Asset write-off: Until June 2023, businesses with an aggregated turnover of less than $500 million can instantly write off assets up to a threshold of $150,000 (Source: ATO). 

Talk to your accountant to evaluate your expense and tax options in this regard. And if you need some additional funds to make those initial purchases, have a conversation with reputable online lenders like lumi.com.au. to see if an unsecured small business loan is the best path for you. 

What are you waiting for? Apply online for an unsecured small business loan of up to $150,000, 

with the option to receive the funds on the same business day in order to make the most of the 

EOFY instant asset write-offs. Check out lumi.com.au for our latest EOFY offer. 

* *This content is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.