2025 Tax Planning Season
With 30th June 2025 very fast approaching, Fenwick Collective will not gatekeep any tax saving tips and strategies this tax planning season!
Our team have prepared a cheat sheet for you:
NEW TAX STRATEGY RE: ATO DEBT
ATO interest on overdue debts will longer be tax deductible from 1 July 2025 (and also currently the interest rate is 11.17% - spicy!). This year it is more important then ever to consider either paying debt off prior to 30 June 2025 or refinancing (e.g. either with a new loan, or even as part of a home loan refinance). Depending on the circumstance, this may or may not allow for the new interest to be tax deductible and also likely to be a lower interest rate than the 11.17% offered by the ATO.
TAX STING - SALE OF ASSETS PREVIOUSLY 100% WRITTEN OFF
Until 30 June 2023, many businesses were able to claim 100% of assets purchased under the temporary full expensing or instant asset write off tax laws. This means though when these assets are eventually sold, 100% of the sale amount received for it will be included in your income for the year, and any replacement asset you buy will generally be depreciated if it is $20,000 or more. So if you're planning to sale an asset we may need to carefully plan for extra tax payable!
BREAKING NEWS PRIME MINISTER DECISION - PURCHASE OF ASSETS
In a welcome surprise for business owners, we have received some more certainty when it comes to what we know and love as the Instant Asset Write Off (IAWO). However, there will still be some differences depending on who wins the election in May!
The IAWO is not what it used to be where we could claim 100% of assets purchased. Instead ....
a) The current IAWO threshold announced by the government for the 2025 FY is $20,000.
b) If Labor win the election, they have just pledged to extend the IAWO through to 30 June 2026. This means for the 2027 FY onwards, only a depreciation deduction will be permitted for any assets over the cost of $1,000....So if Labor win the election there is only a small window to utilise this tax break for assets between the cost of $1,000 and $20,000 before the new rules kick on 1 July 2026.
c) The Coalition have announced that they will make the threshold $30,000 if elected, but again, depending on the makeup of the parliament, it's not a certainty that this will be passed for the 2025 FY or future years even if they do win the election.
ATO FOCUS AREA
It is now more important than ever before to keep proper tax records. This includes:
receipts for all deductible items
motor vehicle logbooks showing business vs private usage
supporting evidence for claiming reasonable travel and meal allowance (i.e. proof of expenditure of the allowance)
home office expense diary
phone usage diary
DIRECTOR LOANS (“DIV 7A”)
Business owners who have borrowed funds from their company in previous years need to consider how the ATO's Division 7A rules apply to them (with our guidance). In particular, if these are not paid back in full we need to put a loan agreement in place with appropriate principal and interest repayments.
A repayment can be in the form of physical cash, a dividend paid to shareholders, or wages/contractor fees paid to the owners. Paying only the minimum amount every year is essentially kicking the tax bill down the road BUT with the current individual tax rates we think this year is a better opportunity then ever before to put a healthy dint in these loans!
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If possible, defer issuing further invoices and receiving cash/debtor payments until after 30 June 2025. This strategy pushes tax payable to future years. Please note, QBCC clients needing certain asset levels may need to reconsider this.
Make note of the value of your stock on hand or work in progress (if applicable) at 30 June. Review your listing and write-off any obsolete or worthless stock items. Talk to our team about your different options for valuing Stock, and how they affect your tax payable.
Write off any bad debts.
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Purchase consumable items BEFORE 30 June 2025. These include marketing materials, consumables, stationery, printing, office and computer supplies. Spend the money now and get the deduction this year.
Consider if wages or a contractor fee will need to be paid to a spouse (or related party) for administration work they have been supporting you with throughout the financial year. For example, Amy runs a digital marketing agency and has her spouse Sam help with her bookkeeping in Xero. Amy pays Sam on a contractor basis for the hours he helped with in the 2025 FY. This is a tax deductible expense to Amy and is income to Sam.
Consider contribution to a charity that is close to your heart before EOFY.
Consider an electric vehicle to maximise the tax benefits.
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Consider restructure. For example, are you a sole trader with increasing profits? If so, now is the time to ask the question about what a company would mean tax wise for your business)
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Maximise deductible super contributions. To claim a tax deduction in the 2025 FY, you need to ensure that your employee superannuation payments are received by the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30 June 2025. We suggest pre-paying any superannuation guarantee for the April 2025 to June 2025 quarter before 15 June 2025.
Organise staff bonuses to be processed through payroll prior to 30 June 2025.
Update budget/cashflow considerations from 1st July 2025 for the increase of superannuation guarantee rate to 12% (was 11.5%).
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Make voluntary superannuation contributions (but make sure you do this before the deadline of 15 June 2025)
Contribute more then the annual cap of $30,000 by consider your unused carry-forward amounts from prior years. Unused amounts are available for a maximum of 5 years and expire after this. For example, a 2019–20 unused cap amount that is not used by the end of 2024–25 will expire.
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The first home super saver scheme (FHSSS) allows you to make voluntary contributions into your super fund to help you save for your first home. As these contributions are made into your super fund they are treated as a tax deduction.
If you own a rental property and haven’t already done so, arrange for the preparation of a Property Depreciation Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property.
We have opened our calendars for April, May and June for clients to book in and offering the below option depending on your budget & requirement:
BRONZE - Tax plan report with email commentary and advice
SILVER - Tax plan report with 45 minute consult
GOLD - Tax plan report, a 12-month budget/cashflow forecast for the 2026 financial year with a 60 minute consult
Request a quote below:
If you're not sure if our tax planning services are quite right for you, but still have questions about getting ready for the new financial year (think new staff member, using Xero, understanding your weekly tax savings requirements), then please still reach out via the contact details below.
📧 hello@fenwickcollective.com.au
📞 07 5630 1586
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountant.