1. TS 1: Salary Packaging Private Motor Vehicles
    Makes private motor vehicles tax deductible (average $3,000 tax saving pa).
  2. TS 12: Concessional Super Contributions
    $25,000 deductible contributions cap (per taxpayer).
  3. TS 32: Change Ownership of Assets
    Can create upfront or ongoing tax deductions (or both).
  4. TS 85: $30,000 Asset Write-Off
    Upfront deduction for depreciating assets.
  5. TS 86: Employee Meal Expenses on Business Premises
    Makes private meals tax deductible (average $5,000 pa).
  6. TS 101: Reducing Super Guarantee Payments
    Eliminates super guarantee payments to contractors (saving the 9.5%).
  7. TS 114: Share Buybacks
    Enables shareholders to access companies paid up capital and retained earnings.
  8. TS 131: Companies
    27.5% company tax rate (and reducing to 25%).
  9. TS 146: Transferring Business Premises into SMSF
    Provides asset protection benefits plus tax savings on rental payments made.
  10. TS 190: Utilise Business Goodwill to Pay Out Your Private Mortgage
    Saves the average business owner $10,000 pa in tax.

Profit Improver Strategy | Raise Your Prices 10%

Raising your selling prices will increase sales when your product or service has an inelastic demand curve i.e. when you raise prices and there is minimal or no change in volume sold. This is a profitable strategy when higher prices produce greater gross profits due to increased profit per unit, even if volume has fallen.

Additional benefits of increasing prices include:

  • Raising your prices can move you to a more upmarket clientele.
  • Allows you to distinguish yourself from your competition.
  • Increases the perception of quality so can actually lead to increased sales volumes (in some cases).
  • Eliminates low quality price sensitive customers.
  • Allows you to sustain your desired profit margins.
  • Price increases may position your product or service as a ‘premium product’.

Factors to consider:

  • Determine whether your product or service has an inelastic demand curve – there is no point increasing your selling prices if it results in a substantial decrease in volume sold.
  • Find out what your competitors are offering and their current pricing.
  • Determine your objective in increasing prices – i.e. to increase sales, increase gross profits, increase the perception of quality, etc.
  • Calculate the financial effect of higher prices and lower volumes on your gross profit and net profit.
  • Increasing selling prices often requires the business to increase their service levels at the same time.
  • Consider the effect of increasing prices on business reputation, brand quality, and credibility.

Case Study | Small Business Saves $8,108 Tax

Peter is a small business owner who wants to save tax and reduce his child maintenance payments.

Facts:  

  • Peter’s business has a taxable income of $77,000 and is growing (taxable income is expected to double next year).
  • Peter is divorced and pays child support of $12,000 per year.

Accountant’s Advice:

  • Tax Strategy 2: Home office occupancy costs – business operated from home (seeing clients, administration, etc.).
  • Tax Strategy 105: Rollover from sole trader to company – Move to company structure for asset protection purposes and to take advantage of the 27.5% company tax rate.
  • Tax Strategy 123: General pool balance less than $30,000 – Write-off the $30,000 general pool balance.
  • Tax Strategy 161 – Gift to clients.

Results:

  • Peter saves $8,108 tax (taxable income reduced by $23,501).
  • Child support payments are reduced by $6,000 pa.
  • Accountant receives tax planning fees of $1,700 (20% of the tax saved).

If you would like to reduce the amount of tax you are paying, please give us a call. 90% of the time, we can legally reduce your tax liability.