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Minimise your business tax - 2025 tax planning guide

Minimise your business tax - 2025 tax planning guide

Are you looking to reduce your home loan, top up your super, save for a holiday, deposit for an Investment Property, pay for your children’s education, upgrade your car? With taxes saved from an effective tax planning strategy you could access additional funds towards your financial goals.

The best time to save tax is between April and June with careful tax planning.
 
Here’s a guide to the strategies you can use to minimise your business tax.

Is your business a "small business" entity?

Small businesses can access a range of tax concessions from the ATO. To qualify as a “Small Business Entity”, the business must have an aggregated turnover of less than $10 million and be operating a business for all or part of the 2025 year.

Aggregated annual turnover is calculated as your annual turnover plus the annual turnover of any business connected / affiliated with you.

 

Lower company tax rates

For 2025, businesses with a turnover of less than $50 million have a tax rate of 25%, provided that 80% or less of their assessable income is “passive income” (such as interest dividends, rent, royalties, and net capital gains).

If you use a Trust structure, one strategy is to allocate profits to a “Bucket Company” and cap your tax at 25% for the 2025 year. However, the company must qualify as a “base rate” entity to get this lower tax rate. Please talk to us to find out if your company qualifies.

 

Tax sting - sale of assets previously 100% written off

Until 30 June 2023, many businesses were able to claim 100% of assets purchased under the temporary full expensing or instant asset write off tax laws.

 

When these assets are eventually sold, the amount received for it will be included in your income for the year, and any replacement asset you buy will generally be depreciated if it is $20,000 or more.

 

You may need to carefully plan for extra tax payable!

 

 

Maximise deductible super contributions

 

The concessional superannuation cap for 2025 is $30,000 for all individuals. Do not go over this limit or you will pay more tax!

 

Note that employer super guarantee contributions are included in these caps. Where a concessional contribution is made that exceeds these limits, the excess is included in your assessable income and taxed at your marginal rate, plus an excess concessional contributions charge.

 

For the contribution to be counted towards the employee’s 2025 contribution cap, it must be received by the fund by 30 June 2025.

 

 

Tools of trade / FBT exempt items

 

The purchase of Tools of Trade and other FBT exempt items for business owners and employees can be an effective way to buy equipment with a tax benefit.

 

Items that can be packaged include handheld/portable tools of trade, computer software, notebook computers, personal electronic organisers, digital cameras, briefcases, protective clothing, and mobile phones.

 

If structured correctly, the employer will be entitled to a tax deduction for the reimbursement payment to the employee (for the equipment cost), claim any GST input credit, and the employee’s salary package will only be reduced by the GST-exclusive cost of the items purchased.

 

You should buy these items before 30 June 2025.

 

 

Repairs and maintenance 

 

Make payments for repairs and maintenance (business, rental property, employment) before 30 June 2025.

 

 

Pay employee superannuation now 

To claim a tax deduction in the 2025 financial year, you need to ensure that your employee superannuation payments are received by the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30 June 2025.

You should avoid making last minute superannuation payments as processing delays may cause them to be received after year-end. If for any reason you end up having to make last minute payments and you would like to claim them as deductions for the current year, contact us immediately and before you make any payments for possible resolutions.

 

Defer income

 

If possible, defer issuing further invoices and receiving cash/debtor payments until after 30 June 2025. This strategy pushes tax payable to future years.

 

 

Bring forward expenses

 

Purchase consumable items before 30 June 2025. These include marketing materials, consumables, stationery, printing, office and computer supplies. Spend the money now and get the deduction this year.

 

 

Defer investment income and capital gains

 

If possible, arrange for the receipt of Investment Income (e.g. interest on Term Deposits) and the Contract Date for the sale of Capital Gains assets, to occur after 30 June 2025.

 

The Contract Date is generally the key date for working out when a sale occurred, not the Settlement Date!

 

 

Motor vehicle logbook 

 

Ensure that you have kept an accurate and complete Motor Vehicle Logbook for at least a 12-week period. The start date for the 12-week period must be on or before 30 June 2025. You should make a record of your odometer reading as at 30 June 2025 and keep all receipts/invoices for motor vehicle expenses.

 

An alternative (with no logbook needed) is to simply claim up to 5,000 business kilometres (based on a reasonable estimate) using the cents per km method.

 

 

Investment property depreciation 

 

If you own a rental property and haven’t already done so, arrange for the preparation of a Property Depreciation Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property.

 

 

Private company ("Div 7A") loans

 

Business owners who have borrowed funds from their company in previous years must ensure that the appropriate principal and interest repayments are made by 30 June 2025. Current year loans must be either paid back in full or have a loan agreement entered in before the due date of lodgement for the company return, or risk having it counted as an unfranked dividend in the return of the individual.

 

 

Year - end stocktake / work in progress

 

If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30 June 2025. Review your listing and write-off any obsolete or worthless stock items.

 

Talk to us about your different options for valuing stock, and how they affect your tax payable.

 

Write - off bad debts

 

Review your Trade Debtors listing and write-off all bad debts before 30 June 2025. Prepare a management meeting document listing each bad debt, as evidence that these amounts were written off prior to year-end and enter these into your accounting system before 30 June 2025.

 

“Small Business Concession” taxpayers can make prepayments (up to 12 months) on expenses (e.g. loan interest, rent, subscriptions) before 30 June 2025 and obtain a full tax deduction in the 2025 financial year.

 

 

Trustee resolutions 

 

Ensure that the Trustee Resolutions are prepared and signed before 30 June 2025 for all Discretionary (“Family”) Trusts.

 

The ATO have recently released a number of Tax Rulings that may affect trust distributions to adult children, so Tax Planning for 2025 will be vital for anyone using a Family Trust.

 

 

WLM can help

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountants. Information is current at the date of issue and may change.

At WLM Accounting, we provide expert guidance on navigating strategies to minimise your business tax. Our team ensures you remain compliant while optimising your tax position to protect your business.

For a discussion about your business or personal accounting and tax needs, reach out to WLM today.

 
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