Tax Time – Tactics That Can Pay Dividends For SMEs

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3.5min read

Published 4 July 2023


You’re flying to an interstate meeting with the chance to seal a big contract and secure the future of your company, and you should be focussing on the presentation, but there’s one other big thing you just can’t stop thinking about... Tax.

No? OK, so tax isn’t always front and centre of everyone’s minds, but there’s certainly more discussion about it around this time of year. And with good reason: if you approach tax planning as an opportunity to save yourself some hard-earned cash, it can pay dividends.

So, what should you be thinking about? We’ve put our number crunching heads together and come up with our top 5 tax time tactics related to business travel. Plus, we’ve also put the ATO under the microscope and found out some of the latest inside info.

Top 5 Business Travel Tax Time Tips

1. Transform Business Travel into a Strategic Asset

Rather than viewing business travel as an expense, consider reframing it as a strategic asset that can unlock unique tax advantages. For example, think about leveraging business travel to explore new markets, establish partnerships, or conduct market research. By positioning business travel as an investment in your business growth, the tax benefits can flow.

2. Keep Detailed Records

Maintaining meticulous records is crucial when it comes to claiming business travel expenses. Keep track of all receipts, invoices, and relevant documents associated with your business travel.

At Flight Centre Business Travel, we can help with this. By consolidating your travel spend with Flight Centre Business Travel, you’ll get access to monthly transactional statements and regular dashboard reports giving you insights into your total travel spend. In fact, we’ll reduce the time you spend reconciling and reporting on your travel accounts by 50% on average, plus provide full visibility over your travel spend to give you more control and zero surprises.

Need help with your corporate travel arrangements? Our Travel Managers are dedicated, experienced and knowledgeable. When you work with Flight Centre Business Travel, you’re choosing peace of mind. Direct access to the same person, who gets your business – and its travel needs – inside and out.

3. Understand Deductible Expenses

It's important to be aware of the types of business travel expenses that are tax-deductible in Australia. Eligible expenses typically include transportation (flights, taxis, car rentals), accommodation, meals, conference and seminar fees, and certain incidental expenses directly related to your business activities during the trip. For more details, visit the ATO website.

4. Separate Personal and Business Expenses

We all love a bleisure trip, but to avoid potential complications, it's crucial to separate personal and business expenses when claiming deductions. Make sure you only claim the portion of expenses that is genuinely related to your business activities.

5. Invoice later, pay earlier

This tip definitely requires your accountants sign off, because you have to be sure to get it right. But, if you defer income by holding off issuing invoices until after July 1, then this income could go into the next financial year and it will be taxed later. Conversely, if you pay expenses earlier (before June 30) you may be able to claim a deduction in the current financial year.

person sits at table, writing in notepad with a laptop in front of them
person sits at table, writing in notepad with a laptop in front of them
person sits at table, writing in notepad with a laptop in front of them

Get to Know the ATO

The ATO rules change every year, so it pays to dig deep and find out the latest. Here’s a few nuggets of information that we found that could be good to consider...

Understand What The ATO Is Looking At

The ATO has publicly announced its three key focus areas for this Tax Time: rental property deductions, work-related expenses, and capital gains tax. For SMEs, work from home deductions is most relevant, and the ATO’s advice is to not just copy and paste your details from last year. They expect you to be able to back up your claims and use the correct method of calculating your deductions.

Catch Up On Any Overdue ATO Bills

The ATO is encouraging small businesses that have overdue income tax returns, fringe benefits tax returns or business activity statements to take advantage of a new amnesty to get their lodgements back on track.

The amnesty applies to tax obligations that were originally due between 1 December 2019 and 28 February 2022 and runs from 1 June 2023 to 31 December 2023. To be eligible for the amnesty, the small business must be an entity with an aggregated turnover of less than $10 million at the time the original lodgement was due.

Consider Depreciation Deductions

The instant asset write-off scheme implemented by the Australian government allows small businesses to claim immediate deductions for eligible assets (it’s probably why you see so many brand-new Toyota Hilux’s on the road!). Get to know the current thresholds, and strategically time your asset purchases to maximise these deductions.

Small Business Energy Incentive

On 30 April 2023, the Australian Government announced it will provide businesses with an annual turnover of less than $50 million with an additional 20% deduction on spending that supports electrification and more efficient use of energy.

Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. This measure is not yet law, but it will help small businesses make investments like electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops and installing batteries and heat pumps.

And Finally, A Few Tips From The Pros

Here’s a checklist of important items to remember from CPA Australia:

  • Document trust resolutions and dividend declarations before 30 June 2023
  • Review and finalise Single Touch Payroll (STP) declarations by 14 July 2023 or the relevant closely held payee due date
  • Correct any superannuation guarantee errors by lodging and paying the Superannuation Guarantee Charge (SGC) statement
  • Lodge Taxable Payments Annual Reports (TPAR) by 29 August 2023

*Note: the information in this article shouldn’t be considered to be professional advice – make sure you talk to your accountant before you do anything!

Find out how Flight Centre Business Travel can help streamline your business’ end-to-end travel program and manage all your travel for work needs today.

Get in touch or call us on 1300 797 826.

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