With the end of financial year looming, NAB’s Executive for Regional and Agribusiness, Khan Horne has some timely tips for agribusinesses to help protect business wealth and build resilience in a tax-effective manner.
Be vigilant about cyber security and tax time scams
Technology is helping farmers become more productive and profitable, but if not secure, it can also make you more vulnerable to cybercriminals looking to exploit it. Put some of your trusting nature aside and be vigilant in assessing potential risks.
Recent NAB research shows one in three small and medium sized enterprises (SMEs) has been a victim of a cyber-attack or scam, losing, on average, $19,000. At the same time, only four in 10 SMEs believe they are being very vigilant regarding their cyber security.
Farmers hold business data and intellectual property that’s very attractive to cyber criminals. For example, most farmers deal electronically with suppliers and their customers, creating masses of business data that cyber criminals look to steal for financial benefit.
Use this time of year to think about how you’re protecting yourself and invest in tools to keep your business safe such as Multi-Factor Authentication and antivirus software that is kept up to date. NAB has anti-virus software offers available to customers.
Have separate mobile phones and computers for work and personal use. This helps reduce exposure to a malware attack, which 36% of SMEs surveyed said they had been a victim of.
Quick tips:
- NAB will never ask you to transfer money to another account to keep it safe – it’s safe where it is.
- NAB will never ask you to log on to your bank accounts or provide your personal information via a link in an email or SMS.
- Be cautious of any message that has a sense of urgency. Scammers use these tactics to get you to act quickly and pray on people’s vulnerabilities.
- Ring and check payment details when paying someone for the first time or if there is a change in account details. This helps reduce the risk of business email compromise scams, including invoice scams.
This is the time of year criminals may attempt to take advantage of EOFY to gain access to your money and information. Some EOFY scam examples include tax refund scams, tax owed scams and ABN scams.
Between April 2022 and April 2023, the Australian Taxation Office (ATO) received over 19,000 reports of ATO impersonation scams that Australians had received via SMS, email, phone and social media platforms.
Talk to your banker and check out our Business Security Hub for practical tips and helpful webinars on how to identify and see through scams. In the last three years, we’ve helped more than 13, 000 businesses and individuals with cyber security training.
And remember, if you think you or your business has been scammed, call your bank immediately.
Consider depositing extra cash into a Farm Management Deposit account
If you’re an eligible agribusiness owner, you can take advantage of a Farm Management Deposit (FMD) account.
The FMD scheme allows eligible primary producers to set aside pre-tax income from their primary production activities during years of high income. The income can then be drawn in future years as needed.
FMDs can help you manage your tax position in years of good production as you only pay tax on this income when you draw on those deposited funds.
Speak with your tax planner, financial adviser and banker in the lead up to 30 June about the appropriate debt, cash and cash flow planning and management.
Many agribusinesses are already using or considering FMDs as part of well-considered tax planning and to build resilience into their business.
NAB’s 2022 financial year FMD season saw FMD volumes grow 29% by end of June 2022, the biggest volume growth in many years after five years of relatively flat growth.
Be aware of changes to the instant asset write-off scheme
The instant asset write-off scheme has been one of the most popular opportunities for investment for businesses over the last few years.
It’s great to see the federal government extend the instant asset write-off scheme, which has been helping boost business investment and was originally slated to end in mid-2023.
The scheme will continue on a temporary basis for 2023-24, although in pared-back form. Multiple assets can be claimed, but the maximum amount per asset is $20,000.
The current rules end 30 June 2023, so now is the time to get in quick before the end of the current tax year. Consider whether you will need new equipment, or if existing equipment needs to be repaired or replaced.
To help Australian businesses transition towards a more sustainable future, NAB offers finance for green equipment including a wide range of eligible vehicles and energy efficient equipment.
Bring forward your deductible expenses and defer income
Speak with your accountant or financial planner to reduce your taxable income this financial year. You could bring forward expenses that are otherwise tax deductible in the following financial year and defer income where possible.
For example, you could consider pre-paying 12 months’ interest on a fixed rate investment loan and look at carrying out last minute maintenance to business or investment properties.
Consider pre-paying 12 months income protection insurance premiums outside super before 30 June to pay less tax this financial year. Small businesses can look at deferring income and tax by delaying the issuing of invoices, for example.
It may also be worthwhile checking through your list of debtors and deciding whether you should write off any bad debts, as bad debts are generally tax deductible if written-off in the same income year that they have been included as assessable income.
Reminders
- In the lead up to the EOFY, you can make planning a lot easier by making sure your records are up to date – receipts for sales and purchases, tax returns, activity statements, employee super contributions, GST returns and BAS statements.
- If you haven’t already, schedule a meeting with your accountant for pre-tax planning and meet with your financial adviser to review your strategy.
- Review business plans, key partnerships and relationships, and think about your plan for the next 12 months.
- Get on top of due dates – put in reminders to help you avoid ATO penalties.
- People are valuable – thank your staff for their efforts over the last 12 months and check in on them.