Key Tax Considerations for Businesses Prior to EOFY 2026

Key Tax Considerations for Businesses – 2026 Financial Year

 

Immediate Actions Before 30 June 2026

  • Pay June quarter super early (by ~20 June) to secure a deduction this year
  • Write off bad debts and review obsolete stock before 30 June
  • Consider asset purchases under the $20,000 instant write-off threshold
  • Bring forward deductible expenses where appropriate (e.g. prepayments)

 

Instant Asset Write-Off

Eligible small businesses may be able to immediately deduct assets costing less than $20,000:

  • Applies to businesses with turnover under $10 million
  • Threshold applies per asset
  • Asset must be installed and ready for use by 30 June 2026

Note: This measure is subject to ongoing legislative support and should be confirmed closer to year-end.

 

Prepayments

Small businesses can generally claim an immediate deduction for prepaid expenses where:

  • The expense covers a period of 12 months or less, and
  • The service period ends by 30 June 2027

Common examples include insurance, rent, subscriptions, and marketing.

 

Superannuation (Employer Contributions)

Super is only deductible when received by the fund:

  • Ensure contributions are cleared before 30 June 2026
  • Allow sufficient time for processing (typically pay by 20 June)

 

Stock and Bad Debts

A year-end review can identify deductions:

  • Write down or scrap obsolete stock
  • Write off bad debts before 30 June to claim a deduction

 

Income Tax Planning (Individuals & Trusts)

The revised tax rates continue to apply:

  • 30% rate from $45,001 to $135,000
  • Planning opportunities exist to optimise distributions within family groups

 

Trust Distributions

For businesses operating through trusts:

  • Ensure distributions reflect genuine entitlement and benefit
  • Be mindful of ATO focus on reimbursement arrangements (s100A)
  • Careful planning required for adult children and circular distributions

 

Company Tax Rates

  • Companies with turnover under $50 million continue to be taxed at 25%
  • No changes for 2026 → limited timing impact from tax rate movements

 

Cash vs Accrual Accounting

Eligible small businesses may adopt cash accounting:

  • Income recognised when received
  • Expenses deducted when paid

This can provide timing advantages around year-end.

 

Additional Considerations

  • Review PAYG instalments and vary if appropriate
  • Consider timing of income and expenses
  • Ensure compliance obligations are up to date

 

Important Disclaimer

Each client’s position will vary depending on income, investments, business and structure. The above is general information only and does not constitute personal advice. Please contact us if you would like to discuss further prior to 30 June.