Tax Planning for Gold Coast Businesses

There are three main areas that small businesses on the Gold Coast should focus tax planning efforts:

1. Maximising Deductions

As a small business owner, you can claim deductions for expenses related to operating your business. Good record-keeping is key, as you need to be able to substantiate claims. 

Types of deductible small business expenses include:

• General running costs like accounting fees, advertising, bank charges
• Interest on loans used for business purposes
• Rent and utilities for business premises
• Motor vehicle expenses for business travel
• Depreciation of equipment, computers, furniture etc.
• Salaries, contractor costs, and superannuation contributions
• Insurance costs like public liability cover
• Legal and professional services like financial advice
• Repairs and maintenance
• Stationery, subscriptions, telecommunications costs related to business activities

If you work from home, even part-time, you may also be eligible for deductions for home office expenses, although caution needs to be exercised to make sure you don’t make yourself liable for capital gains tax if and when you sell your home:

• Occupancy expenses like rent, mortgage interest, water rates
• Running expenses such as electricity, gas, phone bills
• Decline in value of office equipment and furniture
• Cleaning costs for home office area

With some planning and foresight, you can maximise these allowable tax deductions that lead up to June 30. For example, consider:

• Prepaying expenses like insurance premiums, interest, rent, vehicle related expenses. For instance, do your business vehicles need repairs, or detailing?  Before the EOFY might be a good time.
• Making large purchases of equipment or tools you need
• Undertaking repairs and maintenance
• Booking in required professional services

Each business’s situation is unique, so tax minimisation strategies must be tailored accordingly after thorough review.

2. Tax-Effective Business Structures

Your business structure has significant tax implications that are important to consider from both a planning perspective and when optimising day-to-day operations.

The most common small business structures are:

• Sole trader: An individual operating under their own name. Simple and low-cost to set up, but you have unlimited personal liability. All business profit is your personal income.
• Partnership: Similar to a sole trader, but with two or more individuals sharing profits and losses. Offers some asset protection via separate partners, but partners have joint unlimited liability.
• Company: A separate legal entity so owners have limited liability. Subject to company tax rate on profits, which is lower than personal marginal rates. 

For many Gold Coast small businesses, operating as a company can be the most tax-effective structure. But there are additional compliance considerations, so it’s vital to seek expert tax advice. The optimal structure for you depends on your situation and goals. As your trusted tax advisors, KeyPoint Accountants can assess your circumstances and projected profits to model the best approach.

3. Tax Compliance

An often overlooked part of tax planning for Gold Coast businesses is ensuring your tax obligations are met, on time, every time. This includes:

• Record keeping: Keeping organised records of income, sales, expenses, bank statements, contracts, invoices etc.
• Lodging BAS/IAS: Reporting business activity via your quarterly or monthly activity statements.
• Paying instalments: Staying on top of PAYG and GST instalment payments based on your expected tax liability.
• Lodging tax return: Preparing and lodging your tax return for individuals and/or companies annually.

Meeting all lodgment deadlines and payment dates prevents hassles with the ATO. Integrating compliance into your tax planning framework guarantees everything is done properly.