2024–25 Business Tax Planning: Key actions for businesses ahead of 30 June 2025

As the end of the 2025 financial year approaches, businesses are encouraged to review their tax affairs carefully to maximise available opportunities and ensure compliance. The Federal Election adds further complexity, with the possibility of significant tax policy changes on the horizon. Many effective strategies require action before 30 June 2025. This article highlights the critical tax planning items businesses should consider now.

Superannuation contributions – early payment to secure deductions

Superannuation contributions are only deductible once they are both paid and received by a complying superannuation fund. Although the statutory due date for June 2025 quarter contributions is 28 July 2025, contributions paid after 30 June will only be deductible in FY2026.

Action: Businesses should ensure June quarter contributions are paid and cleared into employee super funds before 30 June to secure the deduction this financial year.

Instant asset write-off – Immediate tax relief for eligible purchases

Small businesses (with an aggregated turnover below $10 million) can claim an immediate deduction for the business use portion of each eligible depreciating asset costing less than $20,000, provided the asset is installed and ready for use by 30 June 2025.

This threshold applies per asset, both new and second-hand assets are eligible, supporting investment and improving cash flow.

Action: Review capital requirements and consider bringing forward eligible purchases before 30 June.

Bad Debts – write-off requirements

Businesses can claim a deduction for debts that are genuinely unrecoverable, provided:

• The amount was previously included in assessable income; and
• The debt is formally written off in the accounts before 30 June.

Merely making a provision for doubtful debts is insufficient. Businesses that accounted for GST on these sales may also be entitled to a GST adjustment.

Action: Conduct a debtor ledger review and document all bad debt write-offs prior to year-end.

Scrapping or disposing of obsolete assets

Fixed assets no longer in use due to obsolescence, theft, sale, or scrapping can still appear on asset registers, unnecessarily inflating a business’s balance sheet.

If scrapped or disposed of before 30 June, a deduction for their remaining tax written-down value may be claimed.

Action: Review the fixed asset register and dispose of redundant assets before year-end.

Closing stock valuation – reduce taxable income strategically

Australian tax law permits businesses to value closing stock using the cost, market selling value, or replacement cost — whichever provides the most favourable outcome. Choosing the lowest allowable valuation can legitimately reduce taxable income.

Additionally, stock that is obsolete or damaged may be eligible for a write-down.

Action: Assess inventory valuation methods and consider stock obsolescence adjustments for 30 June

Staff bonuses – confirm entitlement before year-end

A tax deduction for employee bonuses can only be claimed where the business is definitively committed to paying the bonus by 30 June. This requires formal authorisation, such as board minutes, resolutions, or documented approvals.

Action: Ensure bonus approvals are formalised and documented prior to 30 June 2025.

Prepaying eligible expenses – immediate deductions for cash flow savings

Businesses with turnover below $50 million can claim an immediate deduction for prepaid expenses that relate to services provided within 12 months.

Common eligible expenses include insurance, rent, leases, and professional subscriptions.

Action: Review expenditure and consider prepaying eligible costs before 30 June.

Accrued expenses – claim deductions for services already received

Expenses for services provided before 30 June may still be deductible even if not yet invoiced or paid, provided the liability is known and reasonably certain.

Examples include legal fees, audit fees, utilities, and marketing costs.

Action: Accrue unpaid expenses appropriately before finalising 2025 financial accounts.

Consumable supplies – immediate write-off for short-term usage

Consumable items expected to be used within three months after 30 June, such as office supplies and spare parts, can be immediately deducted rather than added to closing stock.

Action: Conduct a stocktake of consumables to identify immediate deduction opportunities.

Immediate deduction of business start-up costs

New businesses can claim immediate deductions for expenses incurred during establishment, including legal and accounting fees, company incorporation costs, and trust deed preparation.

Action: Ensure all eligible start-up expenses are captured in the 2025 tax return.

ATO scrutiny of family trust distributions – Section 100A focus

The ATO continues to scrutinise trust distributions where adult children are made entitled to income but parents ultimately benefit.

Arrangements motivated primarily by tax minimisation may attract anti-avoidance provisions under section 100A.

Action: Review trust distribution practices to ensure they reflect genuine entitlement and are properly documented.

Trust distribution minutes and TFN reporting obligations

Trustees must finalise and document income distribution decisions before 30 June 2025.

Distributions to new beneficiaries must also be supported by a lodged TFN report to avoid a withholding tax obligation at 47%.

Action: Prepare and sign trust resolutions and complete any required TFN reporting before year-end.

ATO interest charges – deductibility ending from 1 July 2025

From 1 July 2025, General Interest Charges (GIC) and Shortfall Interest Charges (SIC) imposed by the ATO will no longer be tax deductible.

As the GIC rate is currently above 11%, carrying tax debt will become more expensive after-tax.

Action: Review and manage outstanding ATO debts promptly.

Income deferral – commercial considerations

Depending on a business’s cash flow, invoicing cycle, and revenue recognition practices, it may be possible to legitimately defer income until after 30 June. 

However, any deferral must be commercially justified and consistent with accounting standards.

Action: Assess income recognition practices and explore appropriate deferral opportunities.

The 2025 financial year presents significant planning opportunities, but early action is essential to fully benefit from them. Businesses should not wait for political or legislative developments before securing available deductions and addressing compliance risks.

For assistance in tailoring a tax planning strategy for your business, please contact your PKF offices.