4 reasons to choose a pre-payment solution this EOFY

Here, we share 4 benefits of prepaying for expenses. These benefits could help your farming or grazing business.

Please note: This is general advice and a starting point, please do further research or speak to your accountant or financial planner to understand what’s best for you, your family and your business.

1. Upfront tax deduction

If you are a small business entity, you may be entitled to an upfront tax deduction, when you prepay for certain expenses that you will incur to run your business or gain income. Pre-payments allow you to bring forward expenditure on purchases you know you will make, year-in-year-out, to generate an income.

Find out more on the ATO page on Deductions for prepaid expenses: 2022

2. Use on large range of products

Eligible pre-payment expenses include ‘products required in later stages of their farming cycle, generally in the next financial year’*. For example, you may be able to pre-pay for products including crop inputs and animal health products you expect to use in the next financial year.

Find out more on the ATO page about eligible deductions for prepaid expenses

3.Ease of use

Deductions on prepaid solutions can be an attractive form of tax planning for farmers.

As this article from audit, tax and consulting firm RSM explains prepayment products don’t ‘tie up funds that could instead be used in their farming cycle during the next financial year’* .

See this RSM article ‘Farm Management Deposit (FMD) or Prepay Plus product?’ dated 10 September 2021

4. Rewards offered for some prepayment solutions

Some suppliers offer additional incentives for their pre-payment solutions, such as credits earned on the amount prepaid that act as discounts on future purchases from that business.

It pays to plan ahead.

One product that can help graziers and farmers with their tax planning is Nutrien Ag Solutions PrePay Plus.

Nutrien’s PrePay Plus offer gives you the advantage of earning rewards on funds lodged at any time but particularly before June 30. By prepaying into your account ahead of time, you will earn a reward of 4.15% p.a. on those funds to be used on Nutrien Ag Solutions’ extensive range of products during the following financial year.

Access  the PrePay Plus agreement form and terms and conditions on this webpage, take it to your local branch, and they'll do the rest.

Find out more on the PrePay Plus page. 

Product offered by Nutrien Ag Solutions Limited ABN 73 008 743 217. Customers should obtain independent financial, legal and tax advice on the suitability of this product for their particular circumstances. For more information, contact your local Nutrien Ag Solutions branch.

*‘Farm Management Deposit (FMD) or Prepay Plus product?’ dated 10 September 2021