31 March 2025
As the end of the financial year approaches, businesses need to prioritise tax planning in order to make the most of their savings. It’s about more than just maximising tax deductions: effective tax strategies can help to reduce tax and set the stage for future growth.
“Looking at your business’ tax obligations is a long-term game. It’s not something that should be left until the last minute,” states AR & B Advisors Director, Mark Giglia. “Last-minute tax preparation is just leaving money on the table.”
Thorough preparation, and putting the right tax strategies in place, empowers businesses to maximise their deductions, reduce their tax bill, and get peace of mind that they’re staying on the right side of the ATO.
When beginning your tax planning, Mark recommends a multifaceted approach that includes both immediate and ongoing strategies.
It’s crucial to start your tax preparation early
To stay on top of your end of financial year tax planning, it’s recommended to meet with a tax advisor throughout the year. Partnering with a trusted tax accountant helps you to understand how your year is progressing. They’ll look at it from a profitability perspective, based on the year to date, allowing you to understand your cashflow with certainty and prepare an estimate to gain an understanding of where your business will land at the end of the year—and determine your potential tax bill.
Forewarned is forearmed, so knowing what you may potentially be required to pay gives you the chance to minimise that figure.
Regular meetings also ensure that you can stay across any changes in tax legislation. This isn’t likely in the current election year, but we can’t say what’s coming down the pipeline, so it’s important to remember for the future.
Here are seven strategies to maximise your tax deductions
When looking at tax planning, businesses tend to place their focus on tax deductions. And with good reason. However, your deduction strategy should be about more than just purchases that impact your cashflow.
“We don’t advocate spending a dollar to save 47 cents,” warns Mark. “If it’s not necessary spending, don’t do it. In these cases, you’re better off financially keeping the money in your pocket.”
There are a number of clever ways of maximising tax deductions while still maintaining a strong cashflow.
1. Bring large asset purchases forward
The ATO’s instant asset write-off allowance lets businesses claim an immediate deduction on an asset up to $20,000. So if there’s any equipment, machinery, or hardware you’re looking at purchasing, consider bringing the purchase forward. This lets you take advantage of the item now, while also contributing a significant deduction to your assessable income for the current financial year.
2. Pay your bills early
You can do the same with expenses. Look at bills that can be paid early, like rent, paying staff bonuses, or employee superannuation that can be prepaid. Things like motor vehicle repairs and servicing can be brought forward a month or two without any adverse effect on your cashflow, while allowing you to enjoy their tax benefits.
3. Maximise your superannuation contributions
You could also consider making additional super contributions, up to the maximum allowable amount of $30,000. This goes a long way to offsetting your marginal tax rate.
4. Review stock for an obsolete inventory tax deduction
Businesses that carry inventory will undertake a stocktake each year. This enables you to identify stock at hand, determine its actual value, and also identify old, obsolete, damaged—or stolen—items that cannot be sold. The cost of this ‘no value’ stock can be removed from your accounting records, and written off as an obsolete inventory tax deduction.
So undertake your inventory review this side of the financial year. There may be some surprises in your inventory that can help to reduce your assessable income.
5. Defer income
For businesses that operate on contracts, postponing your invoices and deferring income at the tail end of the year is a smart way to reduce your tax for the current financial year. Particularly if you’ve had a profitable year, and expect your tax bill to be higher.
Deferring income is a two-fold strategy: as well as reducing your taxable income this financial year, it also ensures that you start out the new financial year on a strong footing. This way, there won’t be much of an impact on your cashflow, but it will make all the difference in reducing tax liabilities.
6. Review your accounts receivable
As a business, there’s a high chance you’re carrying debt in the form of money owed to your organisation. And while it’s a natural part of running a company, sometimes these debts aren’t recoverable. Your customer may have declared bankruptcy, or are grappling with the current market situation that has seen their cashflow dry up.
“Unfortunately, bad debts do happen,” Mark comments. “But a business shouldn’t be expected to pay tax on income it never received.”
Whatever the reason may be, these bad debts can be written off as unrecoverable, and work to reduce your income for that financial year. Check in with your accounts receivable to review all current debts, and determine if any should be considered unrecoverable.
7. Engage a tax professional
“When it comes to tax planning and tax planning options, you don’t know what you don’t know,” states Mark. “Engaging a tax professional prior to 30 June gives you the chance to discuss options, and open up avenues you may not have been aware of.”
Partnering with a tax professional provides you with more certainty around your tax planning strategy. As well as ensuring you stay on the right side of the ATO with your tax obligations, a tax accountant will work with you to evaluate your cashflow. They’ll help you to understand the complexities of your financial data, identify trends, and provide strategic recommendations to reduce your taxable income.
Engaging a tax professional is an ongoing commitment, and one that pays dividends. You’re able to get a thorough view of all your potential tax deductions, while leveraging their fee as a tax deduction, and also putting plans in place to manage your tax for the coming financial year.
AR & B Advisors provide comprehensive tax advice and support for growth-minded businesses
Whether it’s maximising tax deductions, making additional super contributions, deferring income, or doing stocktake to identify an obsolete inventory tax deduction, getting your tax reduction strategies right before the end of the financial year can have a huge impact on your business. Both for this financial year, and the next.
AR & B Advisors partner with you to provide tailored tax advice that ensures you’re covering all the right bases to reduce your taxable income, while supporting your business as your grow. Contact our expert tax accountants today to discuss how a smarter tax strategy can help you finish this current year on a high.