EOFY Tax Planning 2025: Maximize Tax Savings for Your Business

As a business owner, you know that the 30 June deadline is not just the end of the financial year. It’s your last chance to execute strategies for Tax Savings for your Business. Effective End of Financial Year (EOFY) Tax Planning is crucial for small and medium enterprises (SMEs) to optimise their position, boost cash flow, and ensure compliance before the slate is wiped clean for the new financial year.

Don't leave your tax planning to the last minute. Strategic actions taken before 30 June 2025 can have a significant impact on the tax you pay.

I. Strategies for Profit Reduction and Tax Savings

The core principle of EOFY planning is bringing forward deductible expenses and ensuring you utilise all available concessions to legally reduce your taxable profit, delivering maximum Tax Savings for your Business.

1. Utilise the Instant Asset Write-Off (IAWO)

The IAWO is one of the most powerful tools available for Australian SMEs to reduce tax payable.

• The Current Rule (FY2025): The temporary Instant Asset Write-Off allows eligible small businesses (with an aggregated turnover of less than $10 million) to immediately deduct the full cost of eligible depreciating assets that cost less than $20,000.

• Action Required: Assets must be purchased and installed ready for use by the EOFY deadline (30 June 2025). If you need new computers, equipment, or machinery, buying them now is your last chance to claim the deduction this financial year.

• The Car Limit: Remember that the deduction for 'cars' (passenger vehicles designed to carry less than 9 people) is limited by the Car Limit. For FY2204-2025, this limit is $69,674.

2. Prepayment of Expenses

You can claim an immediate deduction for certain expenses paid in advance, provided the period covered does not exceed 12 months.

• Eligible Expenses: Consider pre-paying 12 months of rent, business insurance premiums, interest on business loans, or subscriptions for essential business software/services.

• Action Required: Ensure the expense is actually paid before 30 June 2025.

II. Further Profit Reduction for Tax Savings

1. Review and Write-Off Bad Debts

If you have outstanding invoices that are highly unlikely to ever be paid, you can claim a tax deduction for them.

• Action Required: The debt must be formally written off your debtors ledger before 30 June 2025. For smaller entities, a Director's Minute authorising the write-off is recommended to substantiate the claim.

2. Bring Forward Repairs and Maintenance

If your business premises or equipment require repair, ensure the work is completed and the invoice is paid by the end of June.

• Action Required: Paying for eligible business repairs and maintenance now converts an anticipated expense into a guaranteed tax deduction for the current financial year.

3. Review Your Asset Register and Scrap Obsolete Plant

Do you have old plant and equipment still listed on your depreciation schedule that is no longer in use?

• Action Required: Scrap obsolete assets and write them off before 30 June. This ensures you claim any remaining undeducted value in the current year, clearing your books and maximising your final deduction.

III. Optimising Employee Payments for Tax Savings

This section focuses on using payroll-related strategies, like Superannuation and employee bonuses, to realise deductions before the EOFY deadline.

1. Pay June Quarter Superannuation Early

While the official deadline to pay the June quarter Superannuation Guarantee (SG) is 28 July, paying it before 30 June allows your business to claim the tax deduction in the current financial year.

• Action Required: Process and pay the June quarter SG contribution before midnight on 30 June 2025.

• The Benefit: This is an easy way to bring forward a deduction by up to 12 months, immediately increasing your Tax Savings for your Business.

2. Commit to Directors’ Fees and Employee Bonuses

Expected directors’ fees and employee bonuses can be deductible in the current financial year, even if they are paid after 30 June.

• Action Required: The company must have definitely committed to the payment of a quantified amount by 30 June 2025. This usually means passing a formal Director’s Resolution and notifying the employee/director of their entitlement before the EOFY.

IV. Compliance and Risk Management (Division 7A)

Division 7A rules are a high-risk compliance area for proprietary companies. Ignoring them can lead to significant unfranked deemed dividends, negating any potential Tax Savings.

1. Declare Dividends or Make Loan Repayments (Division 7A)

If your company has lent money to a shareholder or an associate, these actions can be classified as taxable dividends.

• Action Required: Ensure that all minimum loan repayments for existing complying loan agreements are physically made by 30 June 2025. Alternatively, the company may need to declare a fully franked dividend before 30 June to offset the loan balance.

2. Review Related Party Management Fees

Where management fees are charged between related entities within a corporate group, strict commercial reasonableness and documentation are required.

• Action Required: Ensure all inter-entity management fees are raised and invoiced by 30 June 2025, and supported by proper commercial documentation.

Conclusion: Take Control of Your Tax Savings

Effective Tax Planning for your Business is not about waiting for 30 June—it’s about proactive action. By focusing on asset write-offs, prepayment of expenses, and proper management of employee and shareholder accounts, you can legally maximise your tax position for FY2025.

Don't risk missing critical deadlines. Contact us today to execute your EOFY Tax Plan and secure maximum Tax Savings for your Business.