Case Study - Small Business Needs Help
We assist a small manufacturing company negotiate a series of problems too big for them to handle alone.
Successful negotiations with the ATO and a new structure using a SMSF gave this business new life.
Our client operates a cabinet manufacturing business in the eastern suburbs of Perth. When the clients approached McGillivrays they had a number of issues to deal with including a tax debt with the ATO of almost $1.5 million, a number of outstanding tax returns from prior years and a business structure that needed review. The problems were too big for the owners to tackle on their own.
McGillivrays first addressed the tax debt. There were extenuating circumstances and this combined with our knowledge and understanding of Taxation Administration Act saw us sit down with the ATO and negotiate a settlement. The result? A reduction in the outstanding debt to under $300,000. An amazing outcome which relieved a major burden for the owners who could then more clearly focus on the rest of the issues.
Next we sat down with our client and worked though all outstanding tax returns bringing them up to date.
Then, after listening to some of the issues our client was experiencing we reviewed the structure of their business. Unfortunately many businesses either outgrow their structure as they expand or have had the wrong legal entity from the beginning. Either way, talking to your accountant on a regular basis should help identify some of these issues before they become problems.
After careful analysis it was clear the business owners had not been able to make use of the tax saving and Wealth Creation opportunities superannuation could provide. McGillivrays decided to recommend a new structure to our client based around their self managed super fund (SMSF) and the recent changes to the rules that apply to SMSF’s. In the past a SMSF was limited in its ability to purchase assets with the rules relating to borrowing funds being particularly restrictive. Recent changes however now permit a SMSF to borrow in particular circumstances.
So working within the new rules, McGillivrays formulated a structure that allowed our client to transfer commercial properties into their SMSF. This will achieve large ongoing income tax savings on rental income and will produce significant capital gains tax savings in the long term. It is also a terrific opportunity for the business owners to build a significant asset for their retirement and retain control over their financial future. Control is a significant factor in many people choosing to operate a Self Managed Superannuation Fund.
This case study highlights a number of areas McGillivrays target as high priorities. Our ability to listen to our client and understand their business. Our emphasis on always being up to date with the latest changes in the world of constantly changing taxation law and making the most of our experience to benefit our clients.
So what can McGillivrays do for you? Do some of these circumstances apply to you? If this situation sounds familiar to you perhaps you should ask us how we can help.