With 30 June quickly approaching, it’s a valuable time to review your business’s performance and ensure you have a clear understanding of:

• Taxation position and ongoing taxation commitments
• Business profitability

Taxation commitments for many businesses – including tax instalments – can have a major impact on cashflow. Understanding when the commitments will fall due and making any adjustments if your business profitability has changed (compared to previous years) can help a business to manage its cash flow.

In addition, the business profitability is often used by other parties such as financiers assessing lending and other requirements. Even if you are not looking at obtaining or refinancing in the next 12 months, financers look at multiple year results. For example, your business’s 2026 financial results may affect your ability to obtain finance until after the 2028 year.

Should I spend money to save tax?

We always advise against spending money to get a tax deduction, unless you need to.

If you spend $1,000 on a deduction, whilst that may increase your tax refund (or reduce your potential tax bill), you do not receive the full amount of $1,000 back. It will only save you tax at your marginal or business tax rate. For example, for a business whose tax rate is 25%, spending $1,000 will reduce their tax by $250, that is after tax it has cost the business $750.

Business tax planning opportunities: income and expenses

Income:

Most businesses are taxed on income when it is invoiced. Some small businesses may be taxed only when income is received. Income from construction contracts is generally taxed when progress payments are invoiced or received.

Subject to cash flow requirements, consider deferring income until after 30 June, especially if you expect lower income in the next financial year.

Expenses:

Superannuation

Superannuation is deductible in the year that it is paid, therefore if you wish to claim a tax deduction for employee or other superannuation contributions you need to ensure that it is received by the fund before 30 June 2026.

Note from 1 July 2026, all employers will be required to pay superannuation contributions when making their regular payroll contributions.

Plant and equipment

Buying assets costing less than $20,000 can be written off in the same year. Small businesses planning major purchases or replacements of capital equipment should contact us for advice, as depreciation is often calculated on a days owned basis.

Note: be careful in selling assets before 30 June, for many clients who purchased vehicle and equipment in the past may have claimed the 100% under the generous COVID instant asset write-off rules and the sale may result in a taxable profit. Find more information here.

Bad debts

If you have a customer that has not paid and isn’t likely to pay an account, you can write off the amount and claim as a deduction. To write off the amount you need to stop collection activities.

Prepayment of expenses

Small businesses (with turnover less than $2 million) can claim expenses prepaid up to 12 months in advance.

Stock

Review trading stock in the lead-up to 30 June to identify any adjustments to be made to its carrying value. Best practice is generally to write off any obsolete or damaged items, value stock at the lower cost or market selling value.

A comprehensive EOFY review can help you gain clarity on your current taxation position, understand upcoming tax commitments, and evaluate the profitability of your business.

If you need help navigating this in your business or wish to discuss this further, please contact us.