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Swap goods or services and be tax neutral

Having just completed last financial year’s tax return, one of the most important struggles for Australian SMEs is setting up the year ahead with minimal tax exposure.

Dynamic Business blogger Adrian Raftery, Director of  1800 TAXMAN, says one way to do this is for SMEs to trade or swap their excess stock or idle capacity for tax-deductable expenses like printing and advertising through the barter trade network, using Trade Dollars.

“If you spend Trade Dollars on tax-deductable expenses then you are going to be tax-neutral and then be freeing up cash for your own investment,” Raftery said.

A member of the Bartercard scheme, Raftery has utilised his Trade Dollars for a range of tax-deductable items including a bus advertising campaign over the past few tax seasons since 2006. “The amount of enquires we got that resulted in cash transactions was amazing. We may have spent $30,000 Trade Dollars but we got back four times that amount in cash sales.

“It is a no-brainer for services businesses with the extra capacity to use Trade Dollars on tax-deductable expenses because their “cost of goods” is really their own time plus a few overheads such as rent, computers and stationery. Hotels and restaurants are an easy to understand example as they have the facilities already in place – there should be virtually no additional cost between looking after say 30 tables (or rooms) compared with 35 tables (or rooms).”

Owner of Red Snail Restaurant Ann Manetakis, said she has used Trade Dollars to renovate all four of her previous businesses over the last 10 years. “We spend on average $200,000 Trade Dollars each year on tax-deductable expenses which usually comprise about 10 percent of our total sales revenue,” she said.

Bartercard Managing Director, Brian Hall said Bartercard works as an additional income stream that utilises the downtime or excess inventory in a small business and uses it to offset taxable expenditure. “We offer a $5,000-to-$25,000 Trade Dollar interest free line of credit to all our new members but this can be increased depending on your level of trading. A good barter relationship is when about 10 percent of your total income is from Trade Dollars,” he said.

Visit www.bartercard.com.au or phone 1300 BARTER for more information.

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Jen Bishop

Jen Bishop

Jen was the publisher at Loyalty Media and editor of Dynamic Business, Australia's largest circulating small business magazine, from 2008 until 2012. She is now a full-time blogger at The Interiors Addict.

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