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Maximizing Wealth and Minimizing Tax: A Guide to Strategic Tax Planning

Small business owners in Australia often require assistance in tax planning to ensure compliance with regulations, minimize tax liabilities, and optimize financial strategies. Here are the top six strategies to save thousands of dollars in tax.

Income Splitting
  1. Distribute income among family members judiciously:
  • Allocate income based on individual tax thresholds.
  • Ensure fairness and equity in distribution decisions.
  • Consider factors like contribution to business activities.
  1. Utilize family members’ lower tax brackets:
  • Allocate income to family members with lower incomes.
  • Take advantage of lower tax rates for savings.
  • Ensure compliance with tax laws and regulations.
  1. Optimize salary vs. dividends for directors:
  • Evaluate the most tax-efficient mix of salary and dividends.
  • Consider factors like personal tax situations and business needs.
  • Seek professional advice for tailored recommendations.
  1. Consider spouse’s involvement in the business:
  • Assess the spouse’s contribution to business activities.
  • Allocate income or assets accordingly to maximize tax benefits.
  • Ensure transparency and compliance with related regulations.
  1. Review related party transactions for compliance:
  • Scrutinize transactions with family members or related entities.
  • Ensure transactions are conducted at arm’s length.
  • Comply with tax laws and regulations regarding related party dealings.
Timing of Income and Expenses
  1. Defer income to lower taxable year:
  • Postpone receipt of income to subsequent tax periods.
  • Delay invoicing or completion of projects strategically.
  • Aim to shift income to periods with lower tax rates.
  1. Accelerate deductible expenses to current year:
  • Pay for expenses in advance where possible.
  • Consider prepaying expenses such as rent or subscriptions.
  • Ensure expenses are deductible in the current tax year.
  1. Plan asset purchases strategically for depreciation:
  • Time asset acquisitions to maximize depreciation deductions.
  • Consider purchasing assets before the end of the financial year.
  • Evaluate available depreciation methods for tax optimization.
  1. Utilize prepayments for future deductible expenses:
  • Make prepayments for services or supplies to lock in deductions.
  • Ensure prepayments are for expenses that are deductible.
  • Monitor cash flow impact of prepayment decisions.
  1. Align timing strategies with business goals:
  • Coordinate timing strategies with business expansion plans.
  • Ensure tax planning aligns with overall financial objectives.
  • Review timing decisions regularly to adapt to changing circumstances.
Maximising Tax Deductions
  1. Maximize deductions for legitimate business expenses:
  • Identify all eligible expenses incurred for business purposes.
  • Keep detailed records and receipts for documentation.
  • Ensure deductions are in line with tax laws and regulations.
  1. Claim depreciation on eligible business assets:
  • Determine the depreciation method suitable for each asset.
  • Record asset purchases accurately for depreciation calculation.
  • Regularly review asset values and adjust depreciation claims accordingly.
  1. Deduct costs related to acquiring capital assets:
  • Include expenses such as legal fees and stamp duty.
  • Allocate costs associated with acquiring capital assets appropriately.
  • Ensure compliance with capitalization rules for tax deductions.
  1. Claim deductions for motor vehicle expenses:
  • Keep accurate records of business-related vehicle usage.
  • Choose the appropriate method (e.g., logbook or cents per kilometer) for claiming deductions.
  • Separate personal and business use to claim eligible expenses.
  1. Document and substantiate all deductible expenses:
  • Maintain organized records and documentation for all expenses claimed.
  • Ensure expenses are directly related to business activities.
  • Be prepared to provide evidence or documentation upon request by tax authorities.
Dividends & Distributions Plan
  1. Understand Tax Implications:
  • Assess the tax treatment of dividends for shareholders.
  • Consider the impact of dividend imputation credits.
  • Ensure compliance with dividend tax laws and regulations.
  1. Evaluate Financial Needs:
  • Determine the cash flow requirements of shareholders.
  • Balance dividend distributions with business growth needs.
  • Align distributions with shareholder expectations and goals.
  1. Consideration of Shareholder Profiles:
  • Analyze the tax positions and preferences of individual shareholders.
  • Customize dividend distribution strategies based on shareholder profiles.
  • Account for different shareholder groups’ needs and circumstances.
  1. Utilize Franking Credits:
  • Optimize the use of franking credits for tax benefits.
  • Ensure dividends are franked to maximize tax advantages.
  • Leverage franking credits to enhance after-tax returns for shareholders.
  1. Review Business Performance:
  • Assess the profitability and cash flow position of the business.
  • Ensure dividend distributions are sustainable and aligned with performance.
  • Monitor business performance indicators to inform dividend decisions.
Utilizing Tax Concessions and Incentives
  1. Explore eligibility for small business concessions:
  • Review criteria for small business tax concessions.
  • Assess eligibility based on turnover and other factors.
  • Take advantage of concessions such as simplified depreciation rules.
  1. Investigate government grants and incentives available:
  • Research available grants and incentives for small businesses.
  • Determine eligibility criteria and application processes.
  • Explore grants for innovation, research, and development.
  1. Consider capital gains tax concessions for small businesses:
  • Understand CGT concessions available to small businesses.
  • Assess eligibility based on business structure and asset disposal.
  • Utilize concessions like the 15-year exemption or small business rollover.
  1. Explore tax incentives for NDIS industry:
  • Investigate tax incentives specific to the NDIS sector.
  • Consider deductions or concessions available for NDIS providers.
  • Ensure compliance with regulatory requirements for claiming incentives.
Capital Gains Tax Plan
  1. Plan asset disposals strategically for tax outcomes:
  • Evaluate potential tax implications before selling assets.
  • Consider timing of sales to optimize tax outcomes.
  • Plan for exemptions or concessions available for certain assets.
  1. Utilize small business capital gains tax concessions:
  • Determine eligibility for CGT concessions as a small business.
  • Explore concessions like the 15-year exemption or retirement exemption.
  • Maximize benefits by structuring asset disposals accordingly.
  1. Consider timing of capital gains events:
  • Evaluate the timing of capital gains realization.
  • Assess the impact of timing on tax liabilities.
  • Plan for capital gains events in line with overall financial goals.
  1. Offset capital gains with capital losses:
  • Utilize capital losses to offset capital gains.
  • Consider selling underperforming assets to realize losses.
  • Ensure compliance with ATO rules for offsetting gains.
  1. Explore rollover relief for business assets:
  • Investigate rollover relief options for transferring assets.
  • Assess eligibility for rollover relief provisions.
  • Plan asset transfers strategically to maximize relief benefits.
Business Value Creation

Important Update: Changes to National Minimum Wage, Award Minimum Wages, and Superannuation

Annual Wage Review 2022-23 by the Fair Work Commission. These changes affect the National Minimum Wage, award minimum wages, and superannuation rates.

1. National Minimum Wage Increase: Effective from 1st July 2023, the National Minimum Wage has been increased to $882.80 per week or $23.23 per hour. This increase aims to ensure fair remuneration for employees across various industries and to support economic growth.

2. Award Minimum Wages Increase: In addition to the National Minimum Wage, award minimum wages have also been raised by 5.75% as part of the Annual Wage Review. This increase is applicable from 1st July 2023 and aims to maintain equitable pay rates for employees covered by specific industry awards.

3. Superannuation (Super) Guarantee Rate Increase: Starting from 1st July 2023, the superannuation guarantee rate will rise from 10.5% to 11%. This means that employers are required to contribute a minimum of 11% of their employees’ ordinary time earnings to their superannuation fund, helping individuals secure their financial future.

This increase will apply from the first full pay period starting on or after 1 July 2023. This means if your weekly pay period starts on Monday, the new rates will apply from Monday, 3 July 2023.

As a part of payroll management for our clients, we will review your payroll system and make necessary changes and if you haven’t signed up with us for payroll, we encourage you to review your payroll systems and ensure that the necessary adjustments are made to comply with these changes. It is crucial to update your employees’ wages, salaries, and superannuation contributions to reflect the new rates.

As always, our team is here to assist you with any questions or concerns you may have regarding these changes. Please feel free to reach out to us, and we will be more than happy to provide guidance and support.

Thank you for your attention to this matter, and we appreciate your cooperation in ensuring compliance with the updated wage and superannuation regulations. You Can Connect us for more updates and guidance. 

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This is a loser that most people are probably pretty happy about — the government is extending a task force that targets tax avoidance by multinationals, large public and private groups, trusts and wealthy individuals.

It is giving the Australian Tax Office (ATO) more than $600 million over the next three years to keep the scrutiny on those groups.

The budget forecasts the extension of the task force will make the government $2.1 billion in revenue from tax over the next four years.

In bad news for people’s pay packets, real wages are not forecast to grow until later this year at the earliest thanks to higher-than-expected inflation.

At the end of last year, Treasury predicted the inflation rate would be 2.75 per cent. The reality has ended up being around 4.25 per cent.

The budget is predicting wages will only be just higher than inflation in the next couple of years, meaning cost of living pressures are unlikely to ease any time soon.

Despite current price hikes, the budget is forecasting inflation will taper off and wages will grow faster by the middle of the decade.

Buried under the wildly exciting headline of Commonwealth’s Deregulation Agenda, is the $19.9 million spend by the Australian Bureau of Statistics to develop a new reporting application to enable businesses to submit surveys on business indicators directly through their accounting software. Excellent. Real time reporting utilising verified data on the state of Australian business. Guarantee of Origin scheme, and the development of a Biodiversity Stewardship Trading Platform to support farmers to undertake biodiversity activities ahead of the introduction of a voluntary biodiversity stewardship market.

Another $148.6m is for the development of community microgrids and just over $50m to develop gas infrastructure projects.

An additional $652.6m has been set aside to extend the ATO’s Tax Avoidance Taskforce by 2 years to 30 June 2025.
In that time, the taskforce is expected to increase receipts by $2.1bn and increase payments by $652.6m.

Just prior to the Federal Budget, the Government announced the extension of the:

  • Boosting Apprenticeship Commencements wage subsidy, and
  • Completing Apprenticeship Commencement wage subsidy.

    Any employer (or Group Training Organisation) who takes on an apprentice or trainee up until 30 June 2022 can gain access to:
  • 50% of the eligible Australian Apprentice’s wages in the first year, capped at a maximum payment value of $7,000 per quarter per Australian Apprentice,
  • 10% of the eligible Australian Apprentice’s wages in the second year, capped at a maximum payment value of $1,500 per quarter per Australian Apprentice, and
  • 5% of the eligible Australian Apprentice’s wages in the third year, capped at a maximum payment value of $750 per quarter per Australian Apprentice.


7:30pm AEDT, 29 March 2022 until 30 June 2024

The Government intends to provide a 120% tax deduction for expenditure incurred by small businesses on external training courses provided to employees. The deduction will be available to small business with an aggregated annual turnover of less than $50 million. External training courses will need to be provided to employees in Australia or online, and delivered by entities registered in Australia.
Some exclusions will apply, such as for in-house or on-the-job training and expenditure on external training courses for persons other than employees.
We assume there will need to be a nexus between the employee’s employment and the training program undertaken for the boost, although we are waiting on further details of this initiative to be released. 
The boost for eligible expenditure incurred by 30 June 2022 will be claimed in the tax return for the following income year (that is, the 2023 tax return). The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2024, will be included in the income year in which the expenditure is incurred.


1 July 2021

As previously announced, workrelated COVID19 test expenses incurred by individuals will be made tax deductible. 
Changes will also be made to ensure that FBT will not be payable by employers if they provide fringe benefits relating to COVID19 testing to their employees for workrelated purposes.
The changes for deductions will be effective from 1 July 2021, with the FBT changes to apply from 1 April 2021.
At this stage it is not entirely clear whether the deduction rules will cover expenses incurred where the employee is able to work from home. The initial media release indicates that the measure will cover situations where the individual has the option of working remotely, while the Budget only refers to costs of taking a COVID-19 test to attend a place of work but doesn’t specifically refer to employees who can work from home.


1 July 2022

Back in the 2019-20 Budget, the Government announced that Australian Business Number (ABN) holders would be stripped of their ABNs if they failed to lodge their income tax return. In addition, ABN holders would be required to annually confirm the accuracy of their details on the Australian Business Register.

This measure has been deferred for 12 months, which means that the tax return lodgement obligation is due to commence from 1 July 2022 with the annual confirmation of ABN details to commence from 1 July 2023.

As announced prior to the Budget, the Government will commit $6.6 million for the development of IT infrastructure that will enable the ATO to share Single Touch Payroll (STP) data with State and Territory Revenue Offices on an ongoing basis. 

The funding will be deployed following further consideration of which states and territories are able and willing to make investments in their own systems and administrative processes to pre-fill payroll tax returns with STP data in order to reduce compliance costs for businesses.

The measure that enables payments from certain state and territory COVID-19 business support programs to be treated as non-assessable non-exempt (NANE) income has already been extended until 30 June 2022. 
The Government has announced that the following state and territory grant programs have been made eligible for this treatment since the 2021-22 MYEFO, although it is not clear whether the relevant legislative instruments have been issued as yet:

  • New South Wales Accommodation Support Grant 
  • New South Wales Commercial Landlord Hardship Grant 
  • New South Wales Performing Arts Relaunch Package 
  • New South Wales Festival Relaunch Package 
  • New South Wales 2022 Small Business Support Program 
  • Queensland 2021 COVID 19 Business Support Grant 
  • South Australia COVID 19 Tourism and Hospitality Support Grant 
  • South Australia COVID 19 Business Hardship Grant.

    This builds on the list of existing grants paid by New South Wales and Victoria that can already qualify for NANE income treatment. 


1 January 2024

As announced prior to the Budget, businesses will be able to report Taxable Payments Reporting System data via their accounting software on the same lodgment cycle as their activity statements.
The measure is expected to reduce the costs of complying with the system and increase transparency.


1 January 2024

As announced prior to the Budget, companies will be able to choose to have their pay as you go (PAYG) instalments calculated using current financial performance, extracted from business accounting software, with some tax adjustments. 
The move is intended to ensure that instalment liabilities are aligned to the businesses cashflow. In addition, the digitisation of PAYG instalments will improve transparency and provide more accurate data on performance. 


2022-23 income year

Normally, GST and PAYG instalment amounts are adjusted using a GDP adjustment or uplift. For the 2022-23 income year, the Government is setting this uplift factor at 2% instead of the 10% that would have applied. 

The 2% uplift rate will apply to small to medium enterprises eligible to use the relevant instalment methods for instalments for the 2022-23 income year and are due after the amending legislation comes into effect:

  • Up to $10 million annual aggregated turnover for GST instalments and 
  • $50 million annual aggregated turnover for PAYG instalments 
From 7:30pm AEDT, 29 March 2022 until 30 June 2023
The Government intends to provide a 120% tax deduction for expenditure incurred by small businesses on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services. The technology boost will be available to small business with an aggregated annual turnover of less than $50 million.An annual expenditure cap of $100,000 will apply to the boost. The boost for eligible expenditure incurred by 30 June 2022 will be claimed in tax returns for the following income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2023 will be included in the income year in which the expenditure is incurred. That is, the additional deduction available under this measure is expected to be claimed in the 2023 tax return.  

The temporary 50% reduction in superannuation minimum drawdown requirements for account-based pensions and similar products has been extended to 30 June 2023. 

Minimum superannuation drawdown rates 2019-2023


Default minimum drawdown rates (%) 

Reduced rates by 50% for the 2019-20 to 2022-23 income years (%) 

Under 65 











95 or more 




1 July 2024

Trust and beneficiary income reporting and processing will be digitalised with all trusts being provided with the option of lodging income tax returns electronically.

While this measure will reduce compliance costs, it will also increase transparency and provide the ATO with a greater insight into where anomalies are occurring.


1 July 2021

The Medicare levy low income thresholds for seniors and pensioners, families and singles will increase from 1 July 2021.







Family threshold 



Single seniors and pensioners 



Family threshold for seniors and pensioners 



For each dependent child or student, the family income thresholds increase by a further $3,619 instead of the previous amount of $3,597. 

The Home Guarantee Scheme guarantees part of an eligible buyer’s home loan, enabling people to buy a home with a smaller deposit and without the need for lenders mortgage insurance. The Government has extended two existing guarantees and introduced a new regional scheme.

Just prior to the Budget, the Government announced:

  • First Home Guarantee – from 1 July 2022, an increase from 10,000 to 35,000 guarantees to support eligible first homebuyers to purchase a new or existing home. 
  • Single parent Family Home Guarantee – 5,000 guarantees each year from 1 July 2022 to 30 June 2025. The family home guarantee supports eligible single parents with children to buy their first home or to re-enter the housing market with a deposit of as little as 2%.
  • Introduction of a Regional Home Guarantee. This guarantee will support eligible citizens and permanent residents who have not owed a home for 5 years (including non-first home buyers) to purchase or construct a new home in regional areas with a minimum 5% deposit areas (subject to the passage of enabling legislation).


April 2022

A one-off $250 ‘cost of living payment’ will be provided to Australian resident recipients of the following payments and concession card holders:

  • Age Pension 
  • Disability Support Pension 
  • Parenting Payment 
  • Carer Payment 
  • Carer Allowance (if not in receipt of a primary income support payment) 
  • Jobseeker Payment 
  • Youth Allowance 
  • Austudy and Abstudy Living Allowance 
  • Double Orphan Pension 
  • Special Benefit 
  • Farm Household Allowance 
  • Pensioner Concession Card (PCC) holders 
  • Commonwealth Seniors Health Card holders 
  • Eligible Veterans’ Affairs payment recipients and Veteran Gold card holders.

    The payments are exempt from taxation and will not count as income support for the purposes of any income support payment. An individual can only receive one payment.


1 July 2021 to 30 June 2022

The low and middle income tax offset (LMITO) currently provides a reduction in tax of up to $1,080 for individuals with a taxable income of up to $126,000.

The tax offset is triggered when a taxpayer lodges their 2021-22 tax return.

For the 2021-22, the LMITO will be increased by $420 which means that the proposed new rates for individuals are as follows:


Taxable income 


$37,000 or less 


Between $37,001 and $48,000 

$675 plus 7.5 cents for every dollar above $37,000, up to a maximum of $1,500

Between $48,001 and $90,000 


Between $90,001 and $126,000 

$1,500 minus 3 cents for every dollar of the amount above $90,000 

From12.01am 30 March 2022

There are a few jokes going around social media about the price of fuel.

As widely predicted, the Government will temporarily reduce the excise and excise-equivalent customs duty rate that applies to petrol and diesel by 50% for 6 months from Budget night. That is, the current 44.2 cents per litre excise rate will reduce to 22.1 cents per litre from Budget night. However, the measure is subject to the passage of the enabling legislation so don’t expect to see a change right away. 

 The reduction extends to all other fuel and petroleum based products except aviation fuels.

At the conclusion of the 6 months on 28 September 2022, the excise and excise-equivalent customs duty rates revert to previous rates including any indexation that would have applied during the 6 month period. 

The Australian Competition and Consumer Commission (ACCC) will monitor the price behaviour of retailers to ensure that the lower excise rate is passed on to consumers.

The measure comes at a cost of $5.6bn.

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