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What is the benefit of completing my business tax return early?

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With the ATO encouraging individuals to lodge their tax returns by the 31st of October, you may be wondering if there’s a benefit to completing your business tax return early? Of course, if you have engaged ABA (or a registered tax agent) to take care of your personal and business tax return, your 2023 lodgement will technically only be due on 15 May 2024.

With so much work to do in and on your business, it you may be tempted to relax and leave this be until the new year. However, there are distinct benefits to working with your accountant on finalising your return at an earlier date.

Spotlight on 2024

A major benefit of completing your business tax return early is that you can well and truly put a spotlight on 2024. With your tax return finalised before the end of this year, you can confidently move on from the previous financial year and maximise your focus and planning for next year.

With the all the financial data available and additional information from your return, you are in a great position to accurately analyse your business performance. Then identify areas of improvement, have sufficient clarity to make strategic decisions, and set realistic goals for your business.

Most of our clients feel renewed and energised in the new year. Eager to gain momentum with projects and consolidate profitability. With your business tax return lodged, you won’t have either the distraction of putting together paperwork or remembering events from the last financial year. Your full focus can be on current and future work, rather than on the past!

Not to be underestimated is the amount of stress that you can reduce by finishing your business tax return ahead of time. As you head into the holiday season, you can truly make the most of any time off. A clear headspace, financial control, and the freedom to enjoy the downtime with your friends and family. Assured that you will walk into the new year with peace of mind, knowing that you have met the ATO’s expectations and, ideally, having avoided any penalties or audits!

Improve your Cash Flow

Another great benefit of completing your business tax return early is that you can improve your cash flow. When you finalise all the paperwork and sign off on your accountant filing your return, you will get a clear picture of how much tax you owe, or even better, what refund you are likely to get. This knowledge will allow you to plan your budget more accurately, as well as helping you to avoid any surprises or penalties down the track.

If you are in the position where you do owe tax, you can use the time until the due date (which is usually 15th of May for most businesses) to either save up or arrange repayment options.

Early lodgement also means you can take advantage of any deductions or concessions that your business may be eligible for much sooner. These may include instant asset write-off, small business income tax offset, or possibly a lower company tax rate.

In addition, if you are expecting a refund, you can get it sooner and use it to invest in your business or pay off debts. A refund can also boost your cash flow during the festive season, when expenses tend to be higher.

Compliant with the ATO requirements

By completing your business tax return early it means that you are compliant with the ATO requirements. Not sounding like a big benefit? It is!

The ATO has made it clear that they will no longer be as lenient as they have been in the last few years and are increasing their activity to address collectable tax debt. They want to create a level playing field for all businesses. A track record of early lodgement and payments can improve your reputation and relationship with the ATO, as well as increase your chances of getting favourable outcomes in case of any disputes or queries.

It's also important to remember that if you are on a payment plan all BAS, IAS and other compliance must be lodged and paid on time or your payment plan defaults.

The ABA team also want to be proactive and prompt. We want to reduce financial stress, eliminate, or reduce fines and improve your business profitability. We are nudging you to get your business tax return information in early, to help you save money, grow your business, and achieve your goals. All of which contribute to you enjoying more financial control and ultimately, financial freedom to do more of the things you love!

Penalty Amnesty

A short note on the ATO lodgement penalty amnesty program for small businesses. This was announced in May this year to encourage businesses to catch up with their tax obligations. While this may not be an issue for our long-term clients, if you are new to the ABA partnership, it may be relevant.

The penalty amnesty is directed at overdue business tax returns, business activity statements ,and fringe benefits tax returns that were due in the period between 1 December 2019 and 28 February 2022. Eligible overdue forms must be lodged between 1 June 2023 and 31 December 2023.

You can find more information on the ATO website, or speak with one of our fabulous clients advisors who can help you work through your late lodgements.

What would less financial stress and more free time be worth to you?

Most clients would not be able to put a dollar value on reduced stress or more free time. Perhaps you could work it out by the hourly rate that you charge, but what is making it to your children’s soccer match worth? The majority would say these moments are priceless!

These are the moments that ABA wants for you! Because they’re important to us too. Perhaps you have good reasons to delay your lodgement until next year. If not, partner with our team to submit your documents now and respond to our queries so that we can submit your business tax return early. Reduce stress and give yourself the freedom to enjoy the holiday season with your family.

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