As the 2024/2025 financial year draws to a close, small business owners have a valuable opportunity to reduce their tax liability, improve their cash flow, and ensure full compliance with Australian tax regulations. By undertaking tax planning early and strategically, you can take advantage of available tax concessions, avoid costly mistakes, and set your business up for a strong start to the next financial year.
This EOFY 2025 guide outlines the most important tax planning strategies for small businesses, primary producers, trusts, and individuals to consider before 30 June 2025.
Key EOFY Tax Strategies for 2025 – 2026
Understand ATO’s Focus – Professional Firm Profits
The ATO’s Practical Compliance Guideline PCG 2021/4 targets how profits are allocated in professional firms. If you’re a professional—such as a doctor, lawyer, accountant, or engineer—this guidance applies to you. Ensure your profit allocations and business structures are compliant to avoid audits and penalties.
- Optimise Your Business Structure
Review your current business setup (sole trader, partnership, company, trust) for:
- Tax efficiency
- Asset protection
- Succession planning
Seek professional advice to ensure your structure aligns with your long-term goals and allows for tax flexibility.
- Pay Superannuation Before 30 June 2025
To claim a deduction this financial year, ensure your employees’ superannuation contributions are paid and received by the fund before 30 June 2025. Contributions paid late won’t be deductible until the next year.
The Super Guarantee (SG) rate will increase from 11.5% to 12% on 1 July 2025.
- Take Advantage of the $20,000 Instant Asset Write-Off
Until 30 June 2025, small businesses with a turnover under $10 million can immediately deduct eligible assets costing less than $20,000. From 1 July 2025, the limit drops to $1,000—so act now!
- Write Off Bad Debts
If you’ve made genuine attempts to recover a debt but have been unsuccessful, write it off before year-end to claim a deduction. Don’t forget to adjust your GST accordingly if previously reported.
- Dispose of Obsolete Assets
Review your fixed asset register. If you no longer use or need certain equipment, consider disposing of it before 30 June to potentially claim a deduction for the written-down value.
- Value Closing Stock Strategically
Businesses can choose to value stock using:
- Cost
- Market selling value
- Replacement cost
Select the method that yields the lowest value to reduce taxable income. Obsolete stock may also be written down or written off.
- Staff Bonuses
You can only claim a deduction for staff bonuses if you’re legally committed to paying them before year-end. Make sure bonus approvals are documented before 30 June.
- Prepay Business Expenses
Prepay eligible expenses for services within the next 12 months (e.g., rent, insurance) to claim a deduction this year. This strategy is especially useful for small businesses with turnover under $50 million.
- Accrue for Unpaid Expenses
Even if an invoice arrives after 30 June, you may be able to claim a deduction if the services were delivered before year-end and the cost is reasonably estimated.
- Claim Startup Costs
If you launched your business this financial year, don’t forget to deduct setup costs like:
- Legal and accounting fees
- ASIC registration
- Trust or company formation expenses
General Operational Deductions to Maximise
Here are commonly overlooked deductions:
- General Business Expenses: Advertising, legal fees, insurance, and loan interest
- Employee Costs: Wages, super, training, workers’ comp
- Premises Costs: Rent, maintenance, cleaning, utilities
- Office Supplies: Software subscriptions, stationery, small tech
- Travel and Vehicles: Business trips, fuel, repairs, tolls
- Digital Costs: Website hosting, domain registration, digital ads
Ensure all claims are backed by receipts and directly relate to your business operations.
Stay Updated on Tax Credits and Incentives
- Energy Efficiency Grants: Up to $25,000 for equipment upgrades
- Apprenticeship Incentives: $10,000 per apprentice + free TAFE placements from 2027
- Digital and Cybersecurity Support: Free cyber health checks and training
- Future Made in Australia Plan: $750 million for manufacturing sector support
Frequently Asked Questions (FAQs)
- When is the EOFY deadline for businesses in 2025?
The EOFY deadline is 30 June 2025. Ensure all actions like super payments, bad debt write-offs, and prepayments are completed before this date to be deductible this year.
- What’s changing on 1 July 2025?
- The instant asset write-off reverts to $1,000
- The Super Guarantee (SG) increases to 12%
- Can I prepay expenses to reduce tax?
Yes, if your business turnover is under $50 million and the prepaid expense is for services under 12 months, it’s deductible in the current year.
- How do I claim for bad debts?
Ensure the debt was previously included as income, is unrecoverable, and written off by 30 June. Adjust your GST accordingly.
- What startup costs are deductible?
You can claim legal, accounting, ASIC, and company or trust formation fees in the year you incur them.
- How can I value my stock to reduce tax?
Use the method that results in the lowest value—cost, market value, or replacement value. This directly reduces taxable income.
Conclusion
Effective EOFY tax planning is not just about compliance—it’s a strategic tool for saving money and strengthening your business. By reviewing your structure, leveraging deductions, and acting before the 30 June 2025 deadline, you can position your business for better growth, less tax stress, and greater financial health.
For personalised support, speak with your accountant or tax adviser to implement the strategies that best suit your business needs.
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The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
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