The end of the financial year presents a final opportunity to review your tax position, smooth your cash flow, and make strategic decisions before 30 June. While the strategies below are not exhaustive, they are some of the most common and effective ways to manage your obligations and optimise your outcomes.
If 2025 has been a strong trading year — or even a volatile one — don’t leave your planning until the last minute. A timely conversation with your adviser can help you stay ahead of the tax curve.
Maximise Deductions, Defer Income, and Manage Cash Flow
Prepaying expenses
If your business has an aggregated turnover under $10 million, you can claim a tax deduction this year for eligible expenses paid up to 12 months in advance — such as rent, interest, insurance, and subscriptions. This is an easy way to bring forward deductions and reduce taxable income this year.
Valuing trading stock
How you value your trading stock at year-end can significantly affect your taxable income. The ATO allows you to choose between cost, market value, or replacement value. The right choice can reduce your profit — and therefore your tax — especially if you’re holding slow-moving or obsolete stock.
Asset write-offs
Review your asset register before 30 June. Writing off damaged or obsolete assets that no longer have any resale value and have come to the end of their effective life can deliver an immediate deduction and clean up your balance sheet.
Staff bonuses
Bonuses are only deductible when they are both committed to and documented before 30 June. If your business intends to reward staff this year, make sure the decision is formally recorded in time — or the deduction may be pushed into next year.
Income deferral
If you haven’t completed a job or aren’t yet required to issue an invoice, consider deferring that income until after 30 June. This is a legitimate way to manage your business’s taxable income across years.
Work-related purchases
If you need new tech, tools or subscriptions, purchasing these before 30 June means you can deduct the expense in this financial year. Even minor outlays can add up.
Small Business Instant Asset Write-Off — Ends 30 June 2025
Businesses with turnover under $10 million can immediately deduct eligible asset purchases under $20,000, provided the asset is installed and ready for use by 30 June 2025.
For all of the above initiatives, the decision to increase deductions or defer income may have other commercial implications which should be considered when assessing your tax planning strategies. Additionally, the tax effectiveness of any decision to reduce income this year and increase income next year is dependant on a comparison of tax rates applicable in each year and ensuring an overall better tax outcome. You should seek advice on the impact of any decisions to ensure they are suitable for you.
Superannuation: Planning for You and Your Team
Upcoming Super Guarantee increase
From 1 July 2025, the Superannuation Guarantee (SG) rate rises to 12% — its final planned increase. This applies to any wages paid on or after 1 July, regardless of when the work was performed. Make sure your payroll systems and cash flow planning are ready for the change.
Super on Paid Parental Leave (PPL)
From July 2026, employers will be required to pay super (at the SG rate) on the Commonwealth Paid Parental Leave scheme. This change reflects growing policy focus on gender equity and should be factored into your future budgeting.
Trusts, Distributions and the Role of a “Bucket Company”
Trust distribution planning
If your business operates through a discretionary (family) trust, decisions around how income is distributed for the year must be finalised and signed off before 30 June. Without a valid resolution, the ATO may tax the trust’s income at the top marginal rate.
Using a bucket company
If 2025 has been a high-income year, consider distributing income to a corporate beneficiary (commonly called a "bucket company"). This allows surplus profits to be taxed at the corporate rate (25%) instead of top marginal personal rates (up to 47%). Keep in mind: the company must be set up before 30 June to be eligible.
ATO scrutiny on trust arrangements
With ongoing focus from the ATO — particularly post-Bendel case — it’s essential to carefully document all trust distributions and understand how unpaid entitlements could be treated. If you have multiple trusts or beneficiaries, seek advice on the implications before finalising your strategy.
Division 7A and Private Company Loans
If your private company has made loans or payments to shareholders or associates, you must either:
- Repay the loan, or
- Put a compliant loan agreement in place and make minimum yearly repayments.
Failing to do so can trigger Division 7A, meaning the ATO may treat the loan as an unfranked dividend — resulting in unexpected tax.
Payroll Tax Updates for Medical Practices
After years of uncertainty, there’s more clarity for medical practices regarding payroll tax on contractor GPs.
- NSW: From 24 June 2024, metropolitan practices with 80%+ bulk billing are eligible for a 100% payroll tax rebate on GP payments. Other practices need to meet a 70% threshold.
- QLD: From 1 December 2024, all GP wages are exempt from payroll tax, regardless of contractor status.
- Other states: Amnesty arrangements may still apply, but formal exemptions vary.
If you operate a healthcare business, now is the time to confirm your eligibility and ensure your GP engagement models are documented appropriately.
ATO Interest Charges – Deductibility Ends Soon
From 1 July 2025, ATO interest charges will no longer be tax deductible for any taxpayer, including individuals and businesses. If your business has an existing ATO debt — or often enters into payment plans — this change could increase your effective cost.
Now is a good time to review financing options or pay down outstanding liabilities.
Post-Election Policy Outlook for Businesses
Following the 2025 Federal Election and Budget, a range of proposed measures could impact business operations and planning in the years ahead. While not all have passed Parliament, we are monitoring developments closely and will keep clients informed of confirmed changes and their implications. Key proposals include:
Pay Day Super
Initially announced in the 2023 Federal Budget, this reform requires employers to pay superannuation contributions at the same time as salary payments, rather than quarterly. If passed, it could take effect from 1 July 2026.
This will mean adjusting payroll systems and processes to accommodate more frequent super payments, which may impact cash flow and administrative workloads.
Power Bill Relief for Eligible Small Businesses
The Government has proposed it will extend its energy rebate program by offering:
- $150 for around one million small businesses
These payments are to be delivered as two quarterly instalments of $75, starting 1 July 2025, and run through to 31 December 2025.
Extension of the Instant Asset Write-Off (IAWO)
The Government has proposed a 12-month extension of the $20,000 Instant Asset Write-Off threshold, now expected to remain in place until 30 June 2026.
This is designed to encourage business investment and improve cash flow for small businesses.
Ban on Non-Compete Clauses
The Government has proposed a ban on non-compete clauses for employees earning under $175,000 per year, as well as restrictions on “no-poach” agreements between employers.
If passed, this may require a review of employment contracts and talent retention strategies, particularly in competitive industries where non-compete clauses have been commonly used to protect intellectual property, client relationships, and workforce stability.
Increased Bulk Billing Incentives for GPs
From 1 November 2025, the Government will expand the bulk billing incentive—previously limited to children and concession card holders—to all Australians.
Additionally, a new Bulk Billing Practice Incentive Program will reward practices that bulk bill 100% of their patients, with an added 12.5% Medicare rebate loading.
This could see rebates increase from $42.85 to:
- $69.56 in metropolitan areas
- Up to $86.91 in remote locations
Every business is different — speak with your Prosperity adviser now to ensure your planning is tailored, timely and tax-effective. Contact us today on 1300 795 515 or email mail@prosperity.com.
