Kerry Packer once famously said – “Of course, I am minimising my tax. Anybody in this country who does not minimise his tax wants his head read”.

While Kerry Packer may have been running multinational businesses, people often forget just how complex tax can be for small businesses.

At DMG Financial, we pride ourselves on making sure that businesses do not pay more tax than they need to.

But saving tax is only part of the solution, you also need to have the right legal structures in place to help minimise the risks of running a business. These two factors should be the top priorities for any small business.

All too often we hear of businesses going broke and the owners being left with very little to show for their hard work. We also hear how successful businesses can create large unfunded tax problems when it’s time to realise the value.

We see it as our job to help you to avoid these pitfalls – and we enjoy it! That’s why we have been serving the Gippsland business community for many years.

How should you structure your business?

These days, you can run a business under many structures, the challenge is to use the structure that best suits your situation.

For example, it may be wise to:

• Work as a self-employed individual and avoid many of the administrative burdens which comes with operating a small business.
• Create a business entity to protect your investments and personal property in the event of the business failing.
• Operate a trust that may better facilitate the transition of the business within the family.
• Create a number of structures, including a self-managed superannuation fund, to help build your wealth and minimise risk.

Whether you own a trade-based business, run a rural agriculture property, or a business employing many people, how your business is structured is vital to your success. The structure will affect day-to-day operations, and how you will realise value from your business.

Saving on tax

Tax comes in many forms, and even though some such as capital gains tax only bite you once, they can bite hard. It’s important to review all taxes to see how you might be able to save, including:

•   Pay as you earn tax (PAYE)
•   Fringe benefits tax (FBT)
•   Company tax
•   Payroll tax
•   Superannuation
•   Capital gains (and losses) Tax (CGT)
•   Goods and Services Tax (GST)