EOFY, for those of us that are not up to speed with this acronym it stands for End of Financial Year .   The EOFY is fast approaching Easter Bunny has been, we have reverted to normal time (if there is such a time), we are well and truly into the football season, it is Federal Budget Day and we are now into the final quarter of the 15/16 financial period – we have some planning to do!

Planning might be in the form of the cropping program or your shearing and lambing programs.   It might be planning and budgeting to ensure that you have enough cash to get you through until the lambs and wool are sold or until harvest time.   Doing preliminaries figures, with the aim to minimise tax liabilities is also a great means of planning, it puts you in the informed position to make clear and concise decisions which are beneficial to you, your business, your family, and your future wealth.

Knowing your situation prior to year-end enables you to make constructive decisions about the following:

·         The redemption of or in putting in of Farm Managed Deposits

·         Superannuation contributions, using maximum levels may be extremely beneficial depending on your age

·         Cashflow

·         Tax circumstances

·         Revisiting of Loans – in these times of low interest rates

All of the above points made are connected to each other, which is why it is so important to ensure you have as much knowledge of your circumstances as you possibly can.

Planning must be done at many stages of our lives; there are times when we can just wing it. However, for important things including finances and wealth generation it is in your best interest to make a plan, or at the least advert your mind to a plan.

The majority of us use a diary to keep track and write down important notes and dates, some more religiously than others.   My Dad recently commented a couple of weeks ago that his diary nowadays has more medical appointments than social engagements – this   shows how our lives can quickly evolve as we move from one stage to the next in the "Circle of Life".  

Perhaps I have got a bit off track, but with the speed at which the days months and years are going past, planning is of extreme importance, and whilst tax planning is never easy or necessarily exciting, it is beneficial.   It helps us to ensure that we have covered and thought of all issues that are affecting our lives, businesses and families.  

Planning needs to be dynamic and adaptable to changes in any circumstances.   We all know in the primary production industry especially, that a plan is effective, until it doesn't rain or the livestock prices drop. Unfortunately we cannot plan for the weather or the conditions. Planning is not preparing a budget for the Bank Manager and then filing it in the bottom draw of the desk never to be referred to again.   It needs to change when circumstances change.   Variances need to be implemented and reflected in the plans or the budget.

We all need to start thinking about the big picture, into the future – the next 10 years.   For some of us that will be business succession and retirement, for others this will be children's educations and university fees and for the younger generation it will be buying a house and having babies. From all stages of life planning is important.

Now for some more important changes for the 2015/2016 financial year

·         Reduction to Company tax rate for small business – Rate drops to 28.5%

·         Tax Discount for unincorporated small businesses – this is a tax offset to a maximum of $1000 on net small business income.

·         Small Business – Capital Allowance – Immediate deduction for depreciating assets acquired and first used or installed ready for use on or before the 30 June 2017.

·         Primary Producers Capital Allowance – Fodder storage assets purchased during this period can be deducted over three years.   Fences and water facilities are outright deductions.

Important planning considerations that may need to be taken into account prior to year end

 Making money is hard work, holding that cash and making it work for you is even harder.   We need to be vigilant planners, spend wisely and make every decision a winning goal for your business.