The end of the financial year is a little more than a week off and there’s one tax tip that could save you thousands if you act quick.

This often overlooked exercise is to maximise your concessional superannuation contribution, and this financial year could be a particularly important time to undertake this review for many investors.

Why you should think more about taxes this year

For many, things were going well prior the COVID-19 crisis. Jobs were relatively easy to find, the economy was strong and the S&P/ASX 200 Index (Index:^AXJO) was trading at record highs.

Things looks a little more challenged for FY21 and things may not be quite as good as it was this financial year.

If you share a similar outlook, then it especially makes sense to see if you can reach your concessional super cap before June 30.

Just remember, this article isn’t tax advise and is only general information. You should check with your accountant to see if it’s right for you.

What are concessional contributions

Many do not think about super because – let’s face it, it’s boring. Also, people tend to think this is only something to worry about in the distant future as you can’t access it till you retire.

So, if you don’t know what concessional contributions are, you won’t be alone!

The most common type of concessional contribution is the super paid by your employer. While the amount makes up part of your total remuneration package, you don’t pay personal income tax on your super contribution.

But you can contribute more to your super on your own (called personal contribution), as long as you follow the rules.

Concessional contribution limits

Individuals are allowed to put in up to $25,000 a year into their super and deduct that from their taxable income. The contribution is taxed in the super fund at 15%.

As most taxpayers have a marginal tax rate in excess of 15%, the tax savings can be substantial, particularly since you can carry-forward unused concessional contributions limits if your super balance is under $500,000.

This carry-forward feature is only available from 1 July 2018 onwards and it’s on a five-year rolling basis. After which, unused carry forward “credits” that are unused will expire.

How to lower your tax liabilities

So, if you’ve received nothing in your super in FY19, you can put up to $50,000 into your super under the concessional scheme and deduct that from your taxable income.

Depending on your marginal rate, this could shave thousands off tax bill.

You can find out more information at the ATO website.

But as I mentioned earlier, you must check with your tax professional to see if this strategy works for you.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Vocus Group Ltd (ASX: VOC) share price fell as low as $1.80 in mid-March. Since then the company’s share price has rallied strongly, regaining a substantial portion of its losses since late February.

Vocus has been working hard to turn around its business after a challenging few years.

So does the Vocus share price make it a solid long-term buy right now?

Vocus’ position in the telco market

Let’s first take a recap on exactly how Vocus fits into the Aussie telco landscape.

Vocus is a specialist fibre and network solutions provider. Its services include broadband, fibre, data centre services and Unified Communications.

The telco mainly targets the enterprise, government, wholesale and small business markets. It also has a smaller presence in the residential sector offering fixed broadband.

Vocus operates fibre networks connecting most regional centres in Australia, which then connect with Asia. Vocus also operates a network in New Zealand.

Challenging years for the Vocus share price

Founded in 2008, Vocus grew significantly in scale during 2015 and 2016. During that time, it merged with retail telco M2 Communications and also acquired Amcom and Nextgen Networks. Both of these telcos target the corporate market.

The last few years have been challenging for the company. The Vocus share price rose strongly through the last decade up until mid 2016. However, it subsequently dropped sharply over the following 12 months into 2017. Since then, it’s never really recovered to its previous highs.

Vocus reported a 7% decline in total revenue to $902 million for H1 FY2020. Retail in particular was hit hard, suffering a 12% decline to $382 million. The Retail business was impacted by a loss of market share in its National Broadband Network (NBN) segment.

Over the past few years Vocus’s retail division has struggled. This has been mainly due to the tight margins offered to retail fixed broadband operators under Australia’s NBN.

Turnaround strategy on track

Despite this performance, I believe the company is now becoming better positioned for solid growth over the next few years which could be good news for the Vocus share price. The group is just beyond the mid-point of a 3-year turnaround strategy. This includes investments in new capabilities to grow its Network Services division. This division has continued to see strong sales momentum through a solid pipeline of new opportunities.

EBITDA for H1 FY 2020 increased by 2% to $179.3 million for H1 FY2020, driven by a stronger performance in its Network Services and New Zealand businesses. Vocus is also providing stimulus to its retail segment to help turn it around.

On another positive note, Vocus recently reiterated its FY 2020 guidance. The group expects its FY 2020 EBITDA to be in the range of $359 million to $369 million. Vocus also expects its core Network Services business to deliver EBITDA growth of 10% in FY 2020.

Is the Vocus share price a long-term buy?

As a specialist fibre and network services provider, I believe that Vocus is well positioned to capitalise on the rollout of 5G services over the next few years. Also, moving forward, NBN Co will place greater emphasis on making efficient use of existing fibre infrastructure. Vocus is well placed to capitalise on this opportunity which it could potentially exploit by using its existing telco networking infrastructure to partner with NBN Co.

However, the company’s retail division still faces challenges, despite encouraging signs of revenue stabilisation. In addition, the Vocus share price has rallied strongly since mid-March.

Having said that, on balance, I still think Vocus offers investors a reasonably solid, long-term buy and hold opportunity. 

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Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Stavely Minerals Ltd (ASX: SVY) share price is flying higher today after the miner reported “another monster copper-gold hit” at its flagship project in western Victoria.

At the time of writing, Stavely Minerals shares are surging by 33.33% after being up by as much as 44.44% in early trade.

Stavely Minerals is a small-cap ASX mineral exploration company. It was formed in 2014 to acquire early to advanced-stage exploration projects with demonstrated high potential for additional discovery.

The company’s assets are located in Victoria, Queensland, and Tasmania. Its flagship project is the Stavely Project in western Victoria where the company is targeting a Cadia-style gold-copper porphyry and Lake Cowal-style gold mineralisation.

Why the Stavely Minerals share price is spiking

This morning, Stavely Minerals reported new assay results from the ongoing resource drilling program at the Thursday’s Gossan prospect, part of the company’s flagship copper-gold Stavely Project.

The drilling program is aimed at uncovering high-grade, near-surface copper-gold-silver mineralisation over a significant strike extent in the Cayley Lode.

Standout results from diamond drill hole SMD087 in the northern part of the Cayley Lode include:

• 87 metres at 1.74% copper, 0.57 grams per tonne (g/t) gold and 20 g/t silver from 140 metres down-hole, including:
  • 24 metres at 4.19% copper, 1.27 g/t gold and 53 g/t silver from 163 metres; and
  • 9 metres at 4.09% copper, 1.83 g/t gold and 39 g/t silver from 218 metres.

The drilling returned individual interval grades of up to 24.1% copper, 10.05 g/t gold and 249 g/t silver.

Meanwhile, the base of the 24-metre interval hosted strong polymetallic mineralisation. This graded at 2 metres at 9.95% copper, 0.71 g/t gold, 107 g/t silver, 3.87% zinc, 1.18% lead, 0.89% nickel, 0.90% chromium and 0.05% cobalt.

In addition, diamond drill hole SMD085, the south-easternmost drill hole drilled so far in the Cayley Lode, returned:

• 23 metres at 1.07% copper and 0.11 g/t gold from 339 metres, including:
  • 4 metres at 4.44% copper, 0.26 g/t gold and 7.9 g/t silver from 375 metres.

According to the company, the intercept in SMD085 increases the defined strike extent of the Cayley Lode to 1.5 kilometres, with the deposit remaining open along strike in both directions and down-dip.

Stavely Minerals noted that the resource drill-out at the Cayley Lode is progressing well and is now more than 50% complete. This paves the way for a maiden JORC Mineral Resource estimate targeted for the second half of 2020.

Management commentary

Commenting on these latest results, executive chair Chris Cairns said:

“We continue to be surprised by the incredible consistency and continuity of mineralisation in the Cayley Lode, with the results reported today including significant intervals of strong copper-gold mineralisation in the northern portion of the deposit.”

“Due to the large overall interval of strong copper, gold and silver mineralisation in SMD087 and the significant gold grades in the high-grade sub-intervals, we consider this intercept to be on a par with the assays from the discovery drill hole SMD050,” he added.

Mr Cairns closed out his comments by saying, “the drilling continues to reveal local variations in the widths of the mineralisation, as we expected from the outset, but generally speaking the deposit is behaving exactly as we had hoped – with the resource drill-out now well advanced and generating some excellent data that will feed into our maiden JORC Mineral Resource estimate later this year.”

With a share price of 72 cents at the time of writing, Stavely Minerals’ current market capitalisation is sitting at around $154 million.

More reading

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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