Accelerating expenditure check-list

• Maximize depreciation deduction

An immediate deduction can be claimed for most assets each costing less than $6,500 from 2013 onwards. Where appropriate a small business tax entity should consider purchasing these items by 30^th June.

• Accrued salary expense

The gross salary amount that is payable to an employee for the number of days worked up to 30^th June (but not yet paid) can be claimed as a tax deduction

• Staff bonus

Where a business is definitely committed to the payment of a staff bonus as at 30^th June, it can be claimed as a tax deduction

• Directors fees

A company can claim a deduction for director’s fees if it is definitely committed to paying it at 30^th June. The ATO will expect a properly authorised shareholders resolution to be passed by 30^th June in which the company commits to paying the directors fees

• Superannuation contributions

A deduction can be claim for superannuation contributions in the year the contribution is actually madeto the fund. A contribution that is paid to a trustee of a fund in the form of a cheque is generally regarded as being “made” when the trustee receives the cheque

• Accrued interest

Any accrued interest owing on a business loan that has not been paid as at 30^th June may be claimed as a deduction

Prepayment less $1,000 (GST exclusive) not exceeding 12 months (for Small Business tax Entity)

Consider prepaying rent on business premises, car registration, booking and paying for business trip, seminar, training courses that will take place after 30^th June

Reducing the value of closing stock on hand

• Valuing closing stock on hand

Closing stock can be valued either at cost, market selling value, or replacement value. Consider adopting the valuation method which produces the lowest closing stock value at 30^th June

• Obsolete stock

Closing trading stock can be valued at less than its cost , market selling value or replacement value where it is obsolete or special circumstances exist which have affected its value

Deferring income received in advance (Small Business tax Entity)

For those who account for their income on an accrual-basis, they may be entitled to defer income received in advance under the Arthur Murray principle, provided that the following factors are met:

• There is a refund policy (whether enforceable or not) and the prepared income is separately recorded in the balance sheet
• Examples of services to which this may apply includes: accounting and legal firms, music lessons, tuitions, driving lessons where fees are paid in advance