5 things every small business should do before 30 June

The end of the financial year is approaching, so you could start making sure you have everything you need to manage your tax.

Below are some ideas you could discuss with your accountant or tax adviser, or consider researching further on the ATO website.

1. Tax deductions

If you are a small business, incurring some expenses prior to 30 June may increase the amount of your allowable deductions for this financial year (but may reduce what you are entitled to claim next year). 

Some things you could consider reviewing include:

Review your assets

In the 2023-24 Federal Budget, the Government announced that it will allow:

Small business entities (with aggregated turnover of less than $10 million) to immediately deduct the full cost of eligible assets costing less than $20,000. The instant asset write-off can be used for multiple assets, as long as the cost of each individual asset is less than the $20,000 threshold. The measure will apply to eligible assets that are first used or installed ready for use between 1 July 2023 and 30 June 2024.

Small businesses (with annual turnover of less than $50 million) to deduct an additional 20% on spending that supports electrification and more efficient use of energy, such as electrifying heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business. The incentive will apply to eligible assets or upgrades that are first used or installed ready for use between 1 July 2023 and 30 June 2024.

It is important to consider that the above announcements are not yet law and you should ensure that they are enacted as expected before making a decision based on the announcement.

If your business meets the eligibility tests, you may be able to claim asset purchases or the cost of upgrades in your tax return for 2024. This is provided the assets or upgrades are first used or installed and ready for use between 1 July 2023 and 30 June 2024.

There may be time to make purchases for your business and claim the eligible amount against the income you earn in the income year ending 30 June 2024. Not every purchase or expenditure may qualify, and the requirements can be complex, so you’ll need to seek your own independent taxation advice before buying the asset or paying for any energy efficient upgrades.

Prepay your business costs

Running your own business can be expensive, but you may be able to claim some running expenses as tax deductions – including ones you pay for ahead of time. 

Prepaying some expenses before 30 June can increase your allowable deductions for the financial year in which they are paid. Eligible expenses include those that have a service period of 12 months or less, for example, annual policies, utility bills or professional subscriptions. Keep in mind that if you claim them this year, you won’t be able to claim them next year meaning you may have more tax to pay next year.

For more information, visit the ATO website.

2. Get your paperwork in order

Good record keeping makes good business sense no matter what time of year. It helps you keep track of how your business is going, makes it easier to comply with tax record keeping requirements, and enables you to source documents if you need to apply for finance.

Some examples of records you should consider keeping in order are:

  • Receipts for sales and purchases
  • Documents about goods and services tax (GST)
  • Records related to tax returns, activity statements and employee superannuation guarantee contributions.

3. Write off bad debts

You may be entitled to a deduction if you are no longer able to recover amounts your customers owe you. For this reason, you may want to review your receivables prior to 30 June and determine which accounts you have previously included in your assessable (or tax) income that have now gone “bad”. The rules for claiming a deduction for a bad debt are complicated and you should consult with your tax adviser to ensure that you satisfy all the necessary criteria before determining that a debt is “bad”.

For more information, visit the ATO website.

4. Pay your employees’ super the right way

You should consider making sure your employees’ super contributions are in order, as it’s important to pay your employees’ super on time and in a way that is SuperStream compliant. 

You may also want to consider paying the Superannuation Guarantee amount on wages earned to an employee’s superannuation fund in late June rather than waiting until July, as the super contributions are generally only deductible when they are paid.

5. Don’t miss tax deadlines

It can be easy to miss the due dates for lodging your tax return, pay as you go (PAYG) and business activity statements (BAS). Marking these dates in your calendar can save you stress around tax time. There may also be penalties if you lodge after the due date.

For the most up-to-date taxation information, you can find more information on the ATO website or speak to an accountant or tax adviser.

Tax tips & guides for 2024

Take a look at our useful tax guides to help you get started.

Things you should know

  • It’s important to remember that tax laws are complex, and you should ensure that you’ve confirmed you can claim an expense before including it in your tax return. Reliable sources of information include the Australian Taxation Office (ATO), your accountant or financial planner.

    The Australian income year ends on 30 June. You have from 1 July to 31 October to lodge your tax return for the previous income year. If you use a registered tax agent to prepare and lodge your tax return, you may be able to lodge later than 31 October.

    Tax law is subject to change. This article takes into account the tax law as at April 2024. For the latest information, check the ATO website or with your accountant or financial advisor.

    The information provided is of a general nature and doesn’t take into account your personal financial situation – we suggest you seek independent taxation and financial advice.

    This page is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

    Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.