Building Healthy Financial Habits

Selling or closing a business involves more than simply stopping work or making your final sale. Before you finish up, you need to properly deal with the business’s tax obligations, registrations, employees, assets, debts and legal affairs. The exact process will depend on what entity you operate in.  Steps that generally apply to every business Following is a list of tasks that need to be ticked off for most ceasing business: prepare final invoices and collect outstanding customer debts; pay suppliers, loans and other liabilities; deal with remaining stock, equipment, vehicles and other business assets; terminate or transfer leases, contracts, licences and insurance policies; make final employee payments, including wages, leave entitlements and superannuation; finalise Single Touch Payroll reporting and PAYG withholding obligations; lodge any outstanding business activity statements, tax returns, fringe benefits tax returns and taxable payments annual reports; and retain relevant business and tax records, generally for at least five years. Selling, transferring or personally retaining business assets may have GST, capital gains tax, depreciation and other tax consequences. These issues should be reviewed before assets are distributed or registrations are cancelled. Sole traders A sole trader normally reports the final business income, expenses and asset disposals in their individual income tax return. If you are permanently closing all business activities, your GST, PAYG withholding and other registrations may need to be cancelled, followed by your Australian Business Number. If you are only closing one activity but intend to continue operating another business as a sole trader, you may be able to retain your existing ABN and update the business details instead. Remember to cancel any business names, permits or industry licences that are no longer required. Partnerships A partnership will need to prepare final accounts and lodge a final partnership tax return. Each partner must then include their share of the partnership’s final income, deductions and capital gains in their own tax return. The partners should review the partnership agreement and document how the partnership will be dissolved. This may include a written dissolution agreement covering: the closure date; responsibility for outstanding debts; the collection of unpaid accounts; the sale or distribution of assets; and the division of remaining funds. State or Territory partnership laws may impose additional requirements. Legal advice should be obtained to ensure the partnership is properly dissolved and the partners are protected from future liabilities. Trusts Closing a trust usually requires more than lodging a final tax return. A legal process called ‘Vesting’ is the formal process for closing down a trust. This needs to be done by a legal professional. The trustee should review the trust deed, settle liabilities, deal with loans and distribute all remaining trust property in accordance with the deed. Trustee resolutions, asset valuations and distribution records should be prepared and retained. Transferring assets directly to beneficiaries or unitholders can result in capital gains tax, GST or stamp duty consequences, even where no cash changes hands. Do not distribute trust assets without first obtaining appropriate tax and legal advice! Once the trust has been fully wound up, a final trust tax return should be lodged. Beneficiaries must also report their share of the trust’s final income and capital gains. Companies A company continues to exist until it is formally deregistered or wound up. Merely ceasing to trade does not end its obligations. Until deregistration, the company must generally continue meeting ASIC requirements, including paying annual review fees, updating company details and passing required solvency resolutions. Voluntary deregistration may be available where all shareholders agree, the company is no longer conducting business, its assets are worth less than $1,000, it has no outstanding liabilities or legal proceedings, and all ASIC fees and penalties have been paid. All outstanding tax lodgments should be completed before deregistration. Once ASIC deregisters a company, it ceases to exist and can no longer lodge forms with the ATO. Company assets should also be transferred or disposed of before deregistration. Assets left in the company may vest in ASIC or the Commonwealth after deregistration. Where a company cannot pay its debts, directors should seek immediate advice from a registered liquidator and lawyer rather than applying for voluntary deregistration. Plan before you close The order in which you sell assets, pay liabilities, make distributions and cancel registrations can significantly affect the outcome. Speak with us early so we can assist with the tax and reporting requirements and coordinate with your lawyer or financial adviser where necessary. Important: This article provides general tax information only. It does not constitute legal or financial advice and does not take into account your individual circumstances. We are registered tax agents and can advise on taxation matters within the scope of our engagement. You should obtain advice from an appropriately qualified lawyer regarding legal documents, dissolution, deregistration, insolvency and other legal obligations, and from a licensed financial adviser where financial product advice is required.

Many business owners judge performance by a simple measure: "We've had a good year." The problem is that "good" can be difficult to define. Revenue may have increased, but so have costs. Profit may have improved, but cash flow could be under pressure. You may be working harder than ever, but not necessarily seeing the financial rewards for that effort.  This is where benchmarking becomes one of the most valuable tools available to business owners. The most successful businesses don't simply look at their own results. They compare their performance against industry standards, historical trends and leading businesses within their sector. Benchmarking helps answer a critical question: How does my business actually compare? What Is Benchmarking? Benchmarking is the process of comparing key business metrics against other businesses operating in similar industries and circumstances. These metrics may include: Gross profit margins Net profit margins Labour costs Inventory turnover Debtor days Return on assets Revenue per employee Machinery and equipment utilisation Working capital levels Looking at these figures in isolation provides some insight. Comparing them against industry benchmarks often reveals opportunities and risks that would otherwise go unnoticed. The Best Businesses Measure More Than Profit Profit is important, but it is rarely the only indicator of success. The businesses consistently outperforming their competitors are tracking several key performance measures at the same time. For example, they regularly monitor: Cash Flow Strong businesses understand exactly where cash is being generated and where it is being consumed. They know that profitability alone does not pay bills. Productivity Whether it is a farm, retail store, manufacturing operation or professional service firm, leading businesses continually seek ways to improve output without proportionally increasing costs. Efficiency The best operators are always looking for opportunities to remove waste, simplify processes and improve systems. Small improvements implemented consistently often produce significant long-term gains. They Understand Their Industry Benchmarks One of the most common conversations we have with clients begins with: "I thought we were doing alright, but I didn't realise our labour costs were so much higher than similar businesses." Or: "I didn't realise our profit margins were actually well above average." Benchmarking removes guesswork and replaces it with facts. It helps business owners understand: What is normal. What is exceptional. What requires attention. Where the greatest opportunities exist. Without comparison, even good financial results can be misleading. They Focus on the Numbers That Matter Most The best businesses are selective about what they measure. Rather than tracking dozens of reports, they focus on a handful of key indicators that genuinely influence profitability and long-term performance. These vary between industries. A farming business may focus on: Cost of production. Yield performance. Machinery efficiency. Debt servicing capacity. A retailer may focus on: Gross margins. Stock turnover. Average transaction values. Wage percentages. A professional services business may focus on: Utilisation rates. Recovery rates. Revenue per team member. Client retention. The secret is not measuring everything. It is measuring the right things. They Turn Information Into Action Collecting data alone achieves very little. What separates the best businesses is their willingness to act on the information they uncover. When benchmarking identifies: Excessive costs, Poor margins, Capital tied up in inventory, Inefficient work practices, they make changes. Many businesses collect reports every month without ever using them to make decisions. The highest-performing businesses use benchmarking as a practical management tool rather than a reporting exercise. They Review Performance Regularly Successful businesses do not wait until tax season to assess their performance. They review results throughout the year and make adjustments when required. This allows issues to be identified early and opportunities to be acted upon before they disappear. Regular review creates accountability and keeps business goals front of mind. Benchmarking Isn't Just for Large Businesses A common misconception is that benchmarking is only relevant for larger organisations. In reality, some of the greatest benefits are often achieved by smaller businesses. When margins are tight, even modest improvements can have a significant impact on profitability. An improvement of just a few percentage points in gross profit, labour efficiency or inventory management can translate into meaningful increases in business profit and cash flow. Final Thoughts The best businesses don't rely on instinct alone. They use information to guide decisions, identify opportunities and continually improve performance. Benchmarking helps remove assumptions and provides a clearer understanding of where a business stands today and where it can improve tomorrow. At Green Taylor Partners, we regularly work with clients to analyse performance, compare results and identify practical opportunities for improvement. Sometimes the most valuable insight isn't whether your business is profitable. It's understanding how your business compares to the businesses performing at the highest level.

Expected a refund but received a tax bill? Here’s why Many people expect a tax refund when they lodge their tax return, so receiving a tax bill can come as an unwelcome surprise. In most cases, a tax bill doesn’t mean a mistake has been made. It usually means that not enough tax was paid throughout the year. Below are some of the most common reasons.  1. You worked more than one job If you worked for multiple employers during the year, there may not have been enough tax withheld from your pay. This can happen when you claim the tax-free threshold from more than one employer. Generally, you should only claim the tax-free threshold from one employer. This will usually be the employer who pays you the most. If you are currently claiming it from more than one employer, you can ask one employer to stop applying it. You can also ask your employer to withhold additional tax from your pay if needed. 2. You have a HELP or HECS debt If you have a HELP or HECS debt, your compulsory repayment is based on your repayment income for the year. From the 2025-26 financial year, compulsory repayments are calculated using marginal rates. This means that your repayment is calculated only on the income above the minimum repayment threshold. For the 2025-26 year: - No compulsory repayment applies if your income is $67,000 or less. - If your income is between $67,001 and $125,000, the repayment rate is 15 cents for each $1 over $67,000. Make sure your employer knows that you have a HELP debt. If you have multiple jobs or your income increases, you may also ask your employer to withhold additional tax from your pay. 3. You earned investment income Interest from bank accounts, dividends from shares, managed fund distributions, and other investment income are generally taxable. However, little or no tax may be withheld before you receive this income. Keep records of your investment income and provide them to your accountant at tax time. If you regularly receive investment income, consider setting aside some money to cover the possible tax. 4. You sold shares Selling shares can result in a capital gain, which may mean additional tax is payable. Before selling shares, consider speaking with your accountant so you understand the potential tax consequences. Make sure you keep records showing when you purchased and sold the shares. 5. You don’t have private health insurance If your income exceeds certain thresholds and you don’t have an appropriate level of private health insurance , you may have to pay the Medicare Levy Surcharge. The surcharge is in addition to the Medicare Levy that most taxpayers already pay and is calculated when your tax return is prepared. If you only had appropriate private health insurance for part of the year, you may have to pay the surcharge for the days you were not covered. Review whether private health insurance is right for your circumstances and ensure you have the correct level of cover if you wish to reduce or avoid the surcharge. Keep in mind that reportable fringe benefits, such as certain employer-provided benefits, can increase the income used to calculate your HELP repayment and Medicare Levy Surcharge. How can you reduce the risk of a tax bill? Some simple steps can help: - Only claim the tax-free threshold from one employer - Tell your employer if you have a HELP or HECS debt - Keep records of investment income and share transactions - Review your private health insurance - Ask your employer to withhold additional tax if needed - Speak with your accountant if your income or circumstances change The bottom line A tax bill can be frustrating, but it’s often the result of changes to your income or not enough tax being withheld during the year. If you’ve received an unexpected tax bill and aren’t sure why, contact your accountant. Understanding the cause now can help you avoid receiving another surprise tax bill next year.

PAYG Instalments: Which Method Should You Choose This September? Many business owners will shortly receive their September 2026 Activity Statements and be asked to choose a PAYG instalment method. PAYG instalments commonly apply to individuals, sole traders, primary producers, trusts and companies that earn business or investment income. Rather than paying all of their tax after lodging a tax return, affected taxpayers make instalment payments throughout the year towards their expected income tax liability. While PAYG instalments do not change the total amount of tax ultimately payable, selecting the most suitable method can help manage cash flow and avoid unexpected tax bills. For most taxpayers, the July to September quarter is the first PAYG instalment quarter of the financial year. If your Activity Statement outlines both methods, you generally need to lodge your Activity Statement and make your choice on or before the due date, and that election will usually apply for the balance of the income year. The Two Methods Option 1: Instalment Amount Method The ATO issues a fixed instalment amount based largely on your most recent tax return, which has been adjusted for expected growth by the GDP of 5% for the 2026–27 income year. This approach may suit businesses with relatively stable income and profits, or those who prefer predictable quarterly payments. Option 2: Instalment Rate Method Under this method, you multiply your ATO-issued instalment rate by your instalment income for the quarter. This usually comprises gross assessable business and investment income derived during the period, excluding GST. It is not the same as accounting profit or taxable income, and particular exclusions or adjustments may apply. For example, if your instalment income is $150,000 and the ATO-issued rate shown at T2 on your activity statement is 4%, your PAYG instalment would be $6,000 This method is often more suitable where income is seasonal, fluctuating or significantly different from the prior year. Which Option Is Best? When choosing a method, consider: Whether income is higher or lower than last year Seasonal fluctuations in revenue Changes in profitability or operating costs Significant capital purchases or deductions Changes in business structure or investments Cash flow preferences and payment predictability The instalment amount method can overestimate tax if your latest tax return reflected an unusually strong year. Conversely, the rate method may result in larger instalments during high-income quarters. Can You Vary an Instalment? If expected tax is materially different from the ATO calculation, it may be possible to vary the instalment amount or rate. A variation must generally be made by the instalment due date and applies to the remaining instalments for the income year unless varied again. A downward variation should be based on a reasonable estimate. If your varied instalments are less than 85% of the tax ultimately payable on your instalment income, you may have to pay general interest charge in addition to the outstanding tax. Penalties may also apply in some circumstances. Special Considerations for Primary Producers Eligible primary producers may be able to pay PAYG instalments twice a year using the instalment amount method: 75% of the annual amount due in April, and the remaining balance due in July. Eligible farmers can instead change to quarterly payments by choosing the instalment rate method by the first instalment due date.  Need Help? Before lodging your September quarter Activity Statement, contact us if your income, margins, seasonal conditions or business structure have changed. We can review your PAYG options, assess whether a variation is appropriate and ensure any available concessions are taken into account.