OnDeck urges small businesses to act now to save on tax
Leading online small business lender OnDeck Australia is encouraging the nation’s small businesses to explore opportunities that can simultaneously help the enterprise save on tax while strengthening the business for the new financial new year.
Cameron Poolman, CEO of OnDeck Australia, said, “We have pulled together strategies that may allow small businesses to enjoy a tax break this financial year. As Australia’s tax laws are complex, I encourage small businesses to speak with their professional tax adviser to know if their business is able to claim a specific deduction.”
With the end of the financial year fast approaching, OnDeck believes there are five potential opportunities for small businesses to trim the tax man’s take in 2022/23.
- Take a closer look at inventory
Review trading stock, looking for product lines that are slow movers, obsolete, or damaged and consider writing down or writing off these items off completely prior to the end of the financial year.
- Take advantage of temporary full expensing
Temporary full expensing allows businesses to write-off the full cost of an asset in the current financial year. However, the scheme will end on 30 June 2023. The Federal Budget for 2022/23 has announced that small businesses will be able to claim an instant asset write-off for assets costing up to $20,000 until mid-2024.
Assets such as plant and equipment must be in place and ready to use by 30 June 2023 in order to qualify for an instant write-off in the current financial year
“Temporary full expensing isn’t just about valuable tax savings. Investing in new plant and equipment can give a small business valuable productivity gains coupled with savings on energy costs,” said Poolman.
- Consider prepaying expenses
Some small businesses may be able to prepay certain expenses such as rent or insurance premiums before 30 June, and claim a full deduction in the current financial year.
- Upskill employees
Small businesses with aggregated annual turnover below $50 million may be eligible to claim a bonus 20% tax deduction for the cost of employee training under the Skills and Training Boost. The training must be conducted by an external registered provider to be eligible for the bonus tax break.
- Boost tech capabilities
The Small Business Technology Investment Boost introduced in the 2022/23 Federal Budget, allows small businesses to claim 120% of the cost of digitising business operations. Among the costs that may qualify are spending on portable payment devices, improvements to a business’s cyber security systems or subscriptions to cloud based services. Any hardware must be in place by 30 June 2023 to qualify for the Technology Investment Boost.
Brokers can play a role before June 30
As 30 June approaches, small businesses with the support of their brokers need to act fast to take advantage of these tax breaks.
Poolman added, “It’s one thing to have a tax break available, but as brokers know, small businesses often need funding to take advantage of deductions such as temporary full expensing. This is where OnDeck’s fast and efficient loan application and approval process can support small businesses in the run up to 30 June.”
OnDeck’s Lightning Loans offer a fast-tracked application and approval process for loans up to $150,000, with funding decisions in 30 minutes or less. Funds are made available to approved applicants in as little as two hours.
“We know that applying for funding through a traditional lender can be a drawn-out process, which often sees a small business miss the boat when it comes to EOFY tax savings. This is a key area where brokers can lend support to their small business clients, by opening the door to a broader range of funding options.
“OnDeck understands the need for speed at this time of year, and our Lightning Loans can help brokers and their small business clients tap into those last-minute tax deductions,” concluded Poolman.
