Year-End Tax Tips for Small Businesses in Australia: What to Do Before 30 June 2025

As the 2024–2025 financial year comes to a close, small business owners across Australia should start preparing their tax and financial affairs. With some smart planning, you can reduce your tax bill, improve cash flow, and avoid last-minute stress.

In this blog post, we’ll share key year-end tax tips that every Australian small business should know before 30 June 2025.

1. Review Your Financial Records Early

It’s essential to get your bookkeeping in order well before the deadline. Make sure all income, expenses, invoices, and payments are correctly recorded and reconciled. Using accounting software like Xero or QuickBooks can help catch mistakes early and give you a clear picture of your financial position.

2. Maximise Your Deductions

Claim all legitimate business expenses to reduce taxable income. Typical deductions include:

• Vehicle and travel expenses
• Home office costs
• Equipment depreciation
• Rent and utilities
• Advertising and marketing
• Employee wages and superannuation contributions

3. Prepay Eligible Expenses to Bring Forward Deductions

If your business turnover is under $50 million, you can prepay certain expenses (like insurance, rent, subscriptions, or loan interest) for up to 12 months and claim the deduction in the current financial year. This is a great way to reduce your taxable income before 30 June.

4. Don’t Miss Superannuation Contribution Deadlines

Superannuation contributions must be received by your employees’ super funds before 30 June to be deductible this year. Also, keep in mind quarterly Super Guarantee payment deadlines:

Make payments a few days early to avoid penalties.

5. Write Off Bad Debts Properly

If you have unpaid invoices unlikely to be collected, you may be able to write them off and claim a tax deduction — but only if:

• The debt was previously included in your assessable income.
• You have taken reasonable steps to recover it.
• The debt is formally written off before 30 June.

Keep all supporting documents, such as invoices and collection efforts. If you’re registered for GST, you may also adjust your BAS to recover GST on the bad debts.

6. Review Interest Expenses on Business Loans

Interest paid on business loans is generally tax deductible if the loan was taken out for business purposes. As the financial year ends, ensure all interest payments due by 30 June have been accounted for in your books.

If you have the option to make an interest payment early before 30 June, consider doing so to bring forward your deduction into this financial year, helping reduce your taxable income.

7. Claim Home Office Expenses

If you work from home, you may be entitled to claim a portion of your household running costs as a tax deduction. This can include:

• Electricity and gas
• Internet and phone expenses
• Depreciation of office furniture and equipment
• Cleaning costs for your home office area
• Decline in value of a computer or other devices used for work

The ATO allows several methods for calculating home office expenses, such as the fixed rate method (currently 67 cents per hour) or the actual cost method based on a reasonable floor area percentage. Keep a record of your working hours and receipts to substantiate your claim.

8. Conduct a Stocktake and Review Inventory

Write down or write off any obsolete, damaged, or slow-moving stock before the end of the financial year to reduce your taxable income.

9. Consider Deferring Income

Where possible, delay invoicing or receipt of income until after 1 July to defer tax liabilities to the next financial year. This can be particularly useful if you expect to be in a lower tax bracket next year.

10. Take Advantage of the Instant Asset Write-Off

Eligible small businesses (turnover under $10 million) can immediately deduct assets costing up to $20,000 purchased and installed between 1 July 2023 and 30 June 2025. This is a fantastic opportunity to upgrade equipment, technology, or vehicles.

11. Prepare for Super Guarantee Rate Increases

From 1 July 2024, the Super Guarantee rate rises to 11.5%, increasing again to 12% from 1 July 2025. Ensure your payroll system is updated and budgets are adjusted accordingly.

12. Lodge BAS and Income Tax Returns On Time

Avoid penalties by lodging your Business Activity Statements (BAS) and income tax returns by the ATO deadlines. Here are key quarterly BAS due dates:

Note: If lodging through a registered tax agent, some lodgement dates may be extended.

Income tax returns for individuals and businesses are generally due by 31 October each year unless you have a special arrangement with your tax agent.

13. Maintain Complete and Accurate Records

The ATO is increasingly using data analytics and automated tools to identify non-compliance. Keep detailed records of all transactions, invoices, and receipts for at least five years. Good record-keeping makes tax time easier and protects your business in the event of an audit.

Final Thoughts

Year-end tax planning doesn’t have to be stressful. By following these tips and working closely with your accountant, you can reduce your tax liability, improve cash flow, and set your business up for success in the new financial year.

This information is for general knowledge purposes only and does not constitute financial advice. Business loans are complex financial products, and it’s essential to understand the terms and conditions before borrowing. Consult with a qualified financial advisor to discuss your specific situation. FundSpot is not responsible for any errors or omissions in this guide, or any losses incurred as a result of using this information. Loan approvals are subject to lender discretion, and terms may vary.