Down to Business is a video series I put together with my friends at Engima, designed to give you insights into the key disciplines you need to know as a business owner through interviews with specialists in these fields and key people in business who have been there and done it.
For this episode of Down to Business, I caught up with Dan Velich, a Tax Specialist at PKF. Tax legislation is complex and we delve into the importance of tax strategy for a business owner; much more than your day to day tax return.
Top tips for you include:
- Tax specialists are not your day-to-day accountants, they specialise purely in tax and the way they help other businesses is predominantly in one of two ways – transactional support (if a business is looking to sell their business, buy another business, buy a commercial property, protect their assets etc.) and tax reviews (reviewing tax structures, making sure they align with the business’ goals and ensuring the business is paying the minimum amount of tax) – overall, these services can save you a lot of money in the long run;
- Getting your tax done is compliance, it’s historical and everyone does it – there is no strategy or advice about it. If you look at successful businesses out there, they have a business plan and business goals – so why not get some tax advice or have a tax strategy? The advice mainly concerns transaction support (for example, if you wanted to pass your business onto your children, you would seek a tax specialist to ensure you’re minimising your tax). Tax strategy is looking at minimising tax for the business’ group, rather than one transaction. Whether or not you choose to implement the advice is up to you.
- As a business owner (or property developer) you need to be aware of potential hidden tax liabilities that you don’t want to overlook such as Income Tax, GST, Stamp Duty, Fringe Benefits Tax, Land Tax and Payroll Tax. These taxes can be crippling to your business’ growth and restructuring your business may help you manage these effectively.
- Timing is everything – knowing when is the right time to take money out or when to do a transaction as you may qualify for certain tests which lead to valuable concessions.
- As a business owner, as always, have a plan, make a tax strategy, because it is a key thing that good businesses do to get a better outcome. Catch up with your adviser and if you need support, challenge the adviser to seek that specialist out and get a great outcome for you. It is a very important part that can make or break some businesses or your future plan.