2020 was a year to remember. I am sure everyone of us has been affected in some way. Find out all you need to know for tax 2020
Tax Time 2019
Income Tax Withholding Variation (ITWV)
One of the services we offer our clients is to prepare an ITWV which can be used to get early access to a future tax refund. If you are expecting a large tax refund in the current tax year we can prepare an ITWV which is an estimated future tax return. We must include an estimate of ALL income an expenses for the year. Wages, interest, dividends, capital gains, rent, trust distributions as well as deductions.
From this estimated return ATO determine a new tax rate applicable to your gross pay for the remainder of the tax year. ATO send a letter to you and to your employer.
Effectively you get a little bit of your future refund as reduced tax each pay period. Note that each ITWV expires at the end of the tax year that it applies to.
Common reasons to submit an ITWV would be negative geared rental property losses, high motor vehicle deductions or any deductions that will generate a large tax refund.
Any queries please contact us. Current clients please fill in the form below. New clients please contact us to discuss.
Banks and other lenders offer a variety of loans, so make sure you investigate your options and find a loan that suits the needs of your business.
Deciding how much to borrow
Consider what source and type of finance will suit your needs. The method of funding and term of the loan should match the purpose for which the loan is being used.
Think realistically when assessing your financial needs. Consider initial set-up costs. Estimate how long before your business is likely to be self-supporting. You should be able to demonstrate that you will be able to repay the loan, taking into account potential risks such as lower than predicted sales or interest rate increases.
Applying for a loan
If you are starting up a new business and need to apply for a loan, the lender will require the following information from you:
- A description of the products and/or services you intend to provide
- A marketing plan showing how you intend to bring in business
- Evidence of the demand for your products and/or services.
You will also need to provide details of your own qualifications (both business and educational), previous business experience and past achievements.
Obviously, the amount you need to borrow and the purpose for which the loan would be used will need to be communicated to the lender, and repayment terms will need to be clearly established.
If possible, financial information such as sales and profit projections over the term of the loan should be provided to the lender together with a cash flow forecast, showing the loan repayments, for the 12 months ahead.
Likely, the lender will seek security from you to protect the loan and this can vary from one lender to another and will depend on the type of loan and amount to be borrowed. Some generally acceptable forms of security are:
- real estate
- shares in public companies
- a personal guarantee.
Your loan application is more likely to be successful if you provide the lender with a well written Business Plan which includes:
- your business goals and objectives
- results of your market research which support your financial projections and anticipated borrowings
- systems you intend to implement to enable you to monitor your business and respond to changes in your financial position.
YOUR ACTION PLAN
- Have your Business Plan ready.
- Prepare financial information including a cash flow forecast.
- Seek expert advice. We can assist you.
- Decide on a form of security
- Speak with a finance broker
Contact Wood Accounting team today. We have numerous finance broker connections who are experts in Business Finance
Our friends at Xero have written a comprehensive blog article explaining STP. Rather than re-hash this info we are linking over to their blog.
For our current Xero clients we are working through our list and offering assistance, for a small fee, with reviewing payroll and registering for STP.
ATO also have a comprehensive section of their website dedicated to STP. We welcome STP as we feel this will even the playing field for businesses. STP will force ALL businesses to report their PAYG tax and Super obligations to ATO each pay run rather than at end of quarter or end of year. This will give ATO more visibility on those employers not meeting their obligations allowing them to take earlier action against those breaking the rules.
Does your business run STP compliant software?
IF you are running Xero you certainly do have STP enabled software. Many other software providers also have STP ready software.
If you are not sure give us a call and we can get you organised before the due date.
Buying an existing business offers a sense of security because you have a good idea of what you’re getting for your money.
Existing customers and goodwill
An established business will generally come with existing customers, clients, suppliers and staff. This eliminates much of the effort and expense needed to generate goodwill, branding, advertising and hiring staff.
Expenses and finance
The business is already operational and stock is already on hand, so your initial expenses would be minimal and you can quickly generate a cashflow. If you need to obtain finance, it may be easier because the business has a proven track record.
Training and assistance
First-hand experience is valuable and the previous owner and employees remaining with the business are best placed to give you the training and assistance you need.
An existing business does not come with a guarantee of future success!
Goodwill may not last
There’s a risk that customers and clients may leave when the business changes hands. Staff may wish to leave too and you may have to pay their entitlements, such as long service leave. The departure of the owner may have a negative effect on the business, so you can’t necessarily guarantee the profits.
The business may have a bad reputation or have made a poor impression in the past – this might prove difficult for you to turn around.
Premises and equipment
The premises may be inadequate and the equipment or stock may be out dated or in need of replacing or repair.
YOUR ACTION PLAN
Thoroughly research the business!
For expert advice on buying a business, make an appointment to talk with your accountant, solicitor or business adviser.
Contact Wood Accounting team today on
1300 098 852 for assistance with this Action Plan!