With the end of financial year (EOFY) approaching, small business entities have access to a range of concessions to help reduce their taxable income and make tax administration easier.
To help you prepare, we asked Adrian Raftery, principal of Mr Taxman and author of 101 Ways to Save Money on Your Tax – Legally!, to share the eight smart EOFY tax minimisation moves every small business owner should know about.
1. Scrap obsolete stock or plant/office equipment and write-off those bad debts.
Are you holding onto old plant or office equipment that needs upgrading, stock your business can’t sell, or customer bills that will never be paid?
“Physically write it off before 30 June and get a tax deduction this year.
“You can value trading stock at the lower of actual cost, replacement cost, or market selling value. A different valuation method can be applied to each item of trading stock. Similarly, bad debt with customers facing financial difficulty during this cost-of-living can be written off. For your business to get a tax deduction on bad debts, you must write off the debt prior to 30 June.
“The debt must have been originally shown as income for the write-off to be allowed. Put your decision in writing, such as a board minute. You also need to show that you have made a genuine attempt to recover the debt,” says Dr Raftery.
2. Buy any new business asset and claim it as a tax deduction this year.
There have been some great tax concessions over the past few years for small businesses, including the immediate write-off available for the purchase of new business assets that cost less than $20,000.
“There is no limit to the number of assets you can purchase under this concession, but beware that you are only getting a percentage back and your cash flow will suffer. If your business is registered for GST, the threshold is effectively $21,999 as you can claim the 10% GST credit (up to $2,000) and get an immediate write-off for the balance in this year’s tax,” explains Dr Raftery.
“In the 2026–2027 Federal Budget it was proposed that the Instant Asset Write-Off shall be made $20,000 permanently. However, businesses still need to purchase and install eligible assets before 30 June 2026 to claim the deduction in this financial year.”
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3. Build your nest egg quicker by paying 15% rather than 47% tax by salary sacrificing into super.
Salary sacrificing into superannuation is one of the best and legitimate ways to minimise your income tax bill. Small business owners can have their business contribute up to $30,000 per year into super which is only taxed at 15% within the fund and claim a tax deduction for the contribution (25% for small companies and potentially 47% for sole traders).
“To obtain a tax deduction in this financial year for any superannuation contribution (including for all other non-related employees), the contribution must be received by the superannuation fund by 30 June. And if your super balance was under $500,000 as at 1 July 2025, you can carry forward up to $137,500 in unused cap amounts from the previous five financial years to make an even higher tax-deductible contribution this year ($25,000 cap in the 2020/21 year; $27,500 in the 2021/22, 2022/23 and 2023/24 years; $30,000 in the 2024/25 year).
“For those with superannuation balances over $3 million, now is a great time to start planning for the new Division 296 Tax which comes into play on 1 July 2026,” advises Dr Raftery.
4. Defer income and bring forward expenses up to 12 months in advance.
“It is always a good idea to try and defer your taxable income to the next financial year (except when the marginal tax rate increases). For those operating on a cash basis, simply delay the “receipt” of the income. If you operate on a non-cash basis then you may want to defer your invoicing until next year.
“An immediate deduction is available to SBEs for the prepayment of allowable deductions such as lease payments, interest, rent, business travel, bulk stationery and packaging, insurance and subscriptions up to 12 months in advance,” suggests Dr Raftery.
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5. Split your income with your lower earning spouse and pay less tax as a family.
“Too often I see business owners paying 47% tax on income, which could be put under their lower-taxed spouse (0% or 16%) or company (25%). Please note that if you are paying a wage to your spouse from your business, ensure you can justify the amount paid based on the time and skills required,” advises Dr Raftery.
6. Claim a deduction for expenses not paid at year end.
“Just because you haven’t paid for something doesn’t mean that you can’t claim it. Businesses are entitled to an immediate deduction for certain expenses that have been “incurred” but not paid by 30 June,” explains Dr Raftery.
This includes:
- Salary and wages – claim the number of days that employees have worked up to 30 June, but have not been paid until the new financial year.
- Directors’ fees – claim a tax deduction for directors’ fees that are “definitely committed” to at 30 June and has passed an appropriate resolution to approve the payment.
- Office equipment and other office expenses – claim a tax deduction on stationery, computer consumables, or furniture such as Winc Access Copenhagen Mid Back Chair Black with Fixed Arms by 30 June as the business has necessarily incurred the expense prior to year end and has an obligation to pay.
- Staff bonuses – claim a tax deduction for staff bonuses and commissions that are owed and unpaid at 30 June where the business is “definitely committed” to the expense.
- Repairs and maintenance – claim repairs undertaken and billed by 30 June but not paid until next year.
7. Write up your family trust resolutions before 30 June.
“After years of abuse, it is mandatory for those with family (or discretionary) trusts to have a written trustee resolution before 30 June showing the intended distribution of income to family members. If you operate under a trust structure, careful tax planning is required otherwise it may cost your family thousands in unnecessary (and unwanted) taxes as the ATO has them on their radar,” says Dr Raftery.
8. Private company loans to shareholders.
“If you have borrowed funds from your company, ensure that the appropriate principal and interest repayments are made by 30 June. Non-compliance with the strict ATO rules will result in the entire loan amount being deemed an unfranked dividend paid and taxed at (usually the highest) marginal rates. The private use of certain company assets (such as boats and cars) will now also potentially be caught by the taxman unless a market rental fee is paid,” explains Dr Raftery.
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This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.