RECENTLY, an Adelaide-based accountant with a large agricultural client base mentioned the importance of obtaining timely advice.
Many activities within the agricultural calendar are dependent on impeccable timing. These can be production-related, such as seeding and harvest. Other things are also reliant on timing. These are what I would call advisory, particularly tax advice.
The Australian Tax Office is generally not very sympathetic to errors in the lodgement of, or backdating of signed documents. Depending on the issue, there can be big ramifications that can reverberate well into the future, and can be financially detrimental.
Once the ink dries on a document that date is set in stone, and can sometimes set off a series of dominoes that may include unintended consequences. It's best to know the possible outcomes of signing important documents before the fact, and not just live in hope that it will all be OK.
An example is the agribusiness owner that does their tax planning on June 30 or even worse, July 1. The horse has well and truly bolted by that stage.
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Early tax planning needs to be a joint effort, as both sides - the accountant and the agribusiness owner - should be onto this in a timely manner.
Normally a few months out from the end of the financial year is sufficient for seasonal tax planning. Most accountants are proactive in this regard. Others are not and this is ultimately to the detriment of their clients.
Bigger ticket items, such as the transfer or sale of land, can sometimes be years in the making. They will be part of a much bigger series of decisions that need to be completed in sequence. This is the case for succession planning and the transfer of land to the next generation.
Timing of advice is important, and it's just as crucial who is providing the advice.
Generally, the bigger the decision, the more specialised the advice should be. There are people that hold themselves out to be "business advisers". This is a very broad term, and it's incumbent on the person seeking advice to engage someone that is up to the specific task.
In relation to tax advice, most accountants will defer to their favourite tax lawyer if required. This is a very specialised part of the law, and there are multiple practitioners in SA that almost only do tax law. This is no surprise given that the tax act is many thousands of pages long.
I have seen instances where a ruling has had to be obtained from the ATO before a decision is made. Law generally is not black and white, and interpretation can vary between lawyers.
Having an adviser that can explain complex topics in a simple manner is also important. If you're unsure, keep asking questions until a level of clarity is achieved.
Remember, it is highly unlikely the accountant or tax lawyer could successfully run your farm. Each party has their own level of expertise, and there should be mutual respect for each other's knowledge.
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