SMSF Consultants – Self Managed Superfunds and Superannuation Experts

 

CASE STUDY

Tax Can Help With Cashflow Not Hurt It!

 

Let’s set the scene:

 

  • Start up business with first year profits of $120K
  • Tax Bill $36K

 

Owners Plan - pay the tax bill with a lump sum payment. However after talking to us we highlighted 2 problems; firstly they need to pay this tax bill when it suits them, and secondly they could look at options to reduce next year’s tax bill to stop them being in the same position again.

1st Action - Rather than paying the tax bill amount out as a lump sum, we arranged for part payments over 10 months to avoid a drain on cashflow. This allows the business to use this money during this period to generate more funds to clear the tax bill.

2nd Action – The first action only covers the 1st year tax bill, we need to ensure they don’t have the same problem next year, so to reduce this risk we arranged a quarterly accounting structure. This stops any unforeseen tax bill and reduces any cashflow strain. Quarterly management of accounts breaks down any issues into much smaller manageable amounts.

There are tax planning options available to ensure your business is protected from any unnecessary stress. Talk to us at PP Atkins about your tax management plans to find out the best option to your business. 

 

 

 

 

SMSF Consultants – Self Managed Superfunds and Superannuation Experts