Tax Planning Tips for Businesses and Employers

Businesses and Employers:

As the financial year-end approaches, now is the time for businesses and employers to consider key tax planning strategies you can take before 30 June 2025. Here are some important areas to focus on:

Equipment and Instant Asset Write-Off:

If you're planning to upgrade or purchase new business-related equipment, ensure the asset is acquired and ready for use by 30 June 2025. The asset must be actively used by the business to be eligible for the instant asset write-off.
For business assets purchased between 1 July 2024 and 30 June 2025, costing up to $20,000 (or $22,000 if GST registered), your business can deduct the full cost in the 2025 tax return. For more information, please read the article from the ATO here.

Review Your Accounts:

Bad Debts: Review your outstanding invoices and write off any bad debts before 30 June 2025. This ensures your business’ taxable income accurately reflects recoverable amounts.
Director's Loan Accounts: Carefully review any director's loan accounts. Make necessary adjustments or ensure repayments are made before the end of the financial year to avoid potential tax implications.

Superannuation Contributions:

Employee Contributions: Ensure all employee superannuation contributions are up-to-date and paid by the required deadlines.
Director/Proprietor Contributions: Company directors and business proprietors should consider making extra concessional superannuation contributions before 30 June 2025, within the applicable contribution caps.
Carry-Forward Concessional Contributions: Directors and proprietors with a total super balance of less than $500,000 may be able to utilise unused concessional contribution caps from previous financial years to make larger contributions in the 2025 financial year. Remember, the concessional contributions cap for the 2025 financial year is $30,000.
Payment Deadline: Ensure all superannuation contributions intended for the 2025 tax year are received and processed by your super fund by 30 June 2025. We are advising payments are made by 23 June at the latest to ensure enough time for the fund to process before 30 June.

Super Guarantee Rate Increase:

Be prepared for an increase in the super guarantee rate. From 1 July 2025, the super guarantee rate on employees' gross wages will rise to 12%. This will impact your payroll costs in the next financial year.

Pre-Payment of Expenses:

Consider pre-paying certain deductible business expenses, such as rent or insurance, before 30 June 2025. This strategy can potentially bring forward a tax deduction into the current financial year.

Motor Vehicle Logbook:

Ensure your logbook for any business vehicle is current and accurately reflects the business use of the vehicle for the 2025 financial year.
A valid logbook should not be older than five years and should record business travel for a continuous period of at least 12 weeks.
A logbook is only valid for 5 years, provided the business usage of the car has not significantly changed.
The ATO continues to focus on motor vehicle claims, so maintaining an accurate and up-to-date logbook is essential.

Employee Details for STP Finalisation:

Double-check that all employee details in your payroll system are accurate and up-to-date. This includes addresses and tax file numbers.
Accurate records are crucial for the finalisation of Single Touch Payroll (STP) for the 2025 financial year.

Taxable Payments Annual Reporting (TPAR):

If your business operates in the building & construction, cleaning, courier, or other specified industries, you are required to lodge a Taxable Payments Annual Report (TPAR).
Ensure you have accurate details for all contractors paid during the 2025 financial year, including their ABN, business name, and address. This information is required for the TPAR.

Stocktake:

If your business holds stock or records inventory, conduct a physical stocktake of all items as close to 30 June 2025 as possible.
This allows for accurate adjustments to your stock figures in your financial statements, reflecting the actual inventory on hand.

Change of Details:

Please inform our office if you have had any changes in details in the last year, so we can update our records and notify the ATO and ASIC.

Important Note:

If you already have a relationship with a financial advisor, it is highly recommended you contact them before 30 June 2025 to discuss these strategies and receive personalised investment and superannuation advice tailored to your specific business circumstances.

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