With the end of the 2024–25 financial year approaching, now is the time for Australian businesses to focus on effective EOFY 2025 tax planning. A proactive approach can unlock significant financial benefits, ensure compliance and reduce your overall tax liability.

This year brings several changes and opportunities that small and medium-sized enterprises (SMEs) should be aware of. From the extension of instant asset write-offs to updates in superannuation and deductible expenses, this guide will help you make informed decisions before 30 June.

1. Instant Asset Write-Off Extended to $20,000

The Federal Government has extended the $20,000 instant asset write-off for eligible businesses with aggregated turnover under $10 million. This applies to assets purchased and installed between 1 July 2024 and 30 June 2025.

This initiative allows businesses to immediately deduct the cost of assets used for business purposes – such as equipment, vehicles and tools – rather than depreciating them over time.

EOFY 2025 Tax Planning Tip:
If you’re planning to invest in new assets, do so before 30 June to ensure you benefit from the deduction this year.

2. Superannuation Guarantee Increase from 1 July 2025

From 1 July 2025, the Superannuation Guarantee (SG) rate increases from 11.5% to 12%. While this change technically falls into the next financial year, it’s important to plan for the upcoming increase, as it affects payroll budgeting and staff cost forecasting.

EOFY 2025 Tax Planning Tip:
Review payroll systems now to ensure a smooth transition. Budgeting for increased SG contributions helps prevent cash flow issues in Q1 FY2025–26.

3. Prepaying Business Expenses

Businesses with a turnover of less than $50 million may claim deductions this year by prepaying expenses such as rent, insurance premiums and subscriptions, provided the services are provided within 12 months.

EOFY 2025 Tax Planning Tip:
Consider prepaying 2025–26 business costs before 30 June to reduce taxable income in 2024–25.

4. Reviewing Debtors and Writing Off Bad Debts

To be deductible, bad debts must be written off before the EOFY. If you’ve pursued a debt but no longer expect payment, formally write it off in your accounting records.

EOFY 2025 Tax Planning Tip:
Run a debtor analysis report, identify unrecoverable amounts, and write them off prior to 30 June to claim a deduction.

5. Managing Inventory and Obsolete Stock

Unsold, obsolete, or damaged inventory can reduce your taxable income if properly written down or written off. This must be done using a justified and documented valuation method.

EOFY 2025 Tax Planning Tip:
Conduct a detailed stocktake and remove outdated stock from your valuation to reduce your year-end profit.

6. Trust Distribution Resolutions

If your business operates through a discretionary trust, you must prepare and sign trust distribution resolutions before 30 June. If this isn’t done, the ATO may tax the trustee at the highest marginal rate.

EOFY 2025 Tax Planning Tip:
Meet with your tax advisor to draft and sign distribution resolutions well in advance.

7. Changes to Work-From-Home (WFH) Deductions

The ATO has revised the fixed rate method for claiming WFH expenses. The new rate is 70 cents per hour and includes energy, internet, mobile usage, stationery and computer consumables. You must keep a diary of actual hours worked at home.

EOFY 2025 Tax Planning Tip:
Ensure you or your employees maintain a log of hours worked from home to validate claims.

8. Vehicle Expense Claims

If you use your personal vehicle for business purposes, there are two primary methods for claiming motor vehicle expenses:

• Cents-per-Kilometre Method: For the 2024–25 financial year, the ATO has increased the rate to 88 cents per kilometre. You can claim up to 5,000 business kilometres per car, per year using this method, without needing a detailed logbook – but you must be able to show how you worked out the kilometres claimed (ATO).
  
• Logbook Method: This allows you to claim the business-use percentage of all running costs (fuel, insurance, servicing, depreciation, etc.), based on a 12-week representative logbook.
  

EOFY 2025 Tax Planning Tip:
If your vehicle is used substantially for work, keeping a logbook now may result in a significantly higher deduction than the 88c/km method. You only need to complete a new logbook every five years unless your usage pattern changes.

9. Small Business CGT Concessions

If you’ve sold a business asset or are considering selling, the Capital Gains Tax (CGT) concessions for small businesses could significantly reduce your tax payable. There are four main concessions, including the 15-year exemption and the 50% active asset reduction.

EOFY 2025 Tax Planning Tip:
Speak with a tax professional about eligibility if your business has made a capital gain this year.

10. Review PAYG Instalments and Tax Estimates

The ATO allows you to vary your PAYG instalments if your income is lower than expected. This can assist in freeing up cash flow for your business.

EOFY 2025 Tax Planning Tip:
Use your current figures to check whether your instalments need adjusting – just ensure you don’t underestimate or penalties may apply.

Final Thoughts

EOFY 2025 tax planning isn’t just about reducing your tax bill – it’s about making informed decisions to improve the financial health of your business. From taking advantage of available deductions to ensuring compliance with superannuation and trust obligations, a well-planned strategy can set your business up for success in the new financial year.

Now is the time to book a meeting with your accountant or tax advisor. The sooner you act, the more options you’ll have to minimise your liability and maximise your returns.

For personalised advice, contact Wisdom Business Consultants. We’re here to help you make the most of EOFY 2025 tax planning.