Tax Tips for Business


Saving tax requires proactive action. Start organising things now, before the 30 June deadline. Every dollar you save in tax is another dollar to reinvest in your business. Here are some strategies to reduce your tax bill.

Keep good records

The most effective way to minimise your tax is to keep good records. It is important that you have your records and receipts in order. Hiring an experienced bookkeeper is crucial but many people try to fly solo. This can end up costing them as misallocated costs mean lost tax deductions.

Hold off on invoicing 

A day or two can make a difference, hold off on sending out some invoices until after 1 July and you delay the tax liability. The income will be taxed in the following year deferring any tax payable on that income for another year. You must keep your tax bracket in mind for both years however; you don’t want to end up paying a higher tax rate on the deferred income.

Vehicle usage

Many small business owners use their car for work related activities that are essential to earning an income. If this is the case then you can claim car usage. There are four methods you can choose from to work out the amount you can claim for the use of any car.

  • Method 1 – cents per kilometre
  • Method 2 – 12 per cent of original value
  • Method 3 – one third of actual expenses
  • Method 4 – logbook 

If you travel less than 5000 kilometres in a financial year, you can use either Method 1 or Method 4. 

If you travel more than 5000 business kilometres you can use any of the four methods available. Be sure to choose the method that will give you the best result, but make sure you keep all the appropriate records.

Asset write-offs

Small businesses can also write off capital assets instantly up to $6500. This is not apportioned so even if purchased on 30 June and value is less than $6500 then can write-off instantly – great tax savings with this one! To qualify as a small business the annual turnover must be less than $2million.


An immediate deduction for prepaying expenses up to 12 months in advance by 30 June (such as leases, interest, rent, business travel, insurances and subscriptions).

Bad Debts

For a business to get a tax deduction on its bad debts, it must physically write off the debt prior to 30 June. The easiest way to do this is to put your decision in writing, such as a board minute or an email to the bookkeeper. You will also need to show that you have made a genuine attempt to recover the debt.

Scrap Stock

Have you got any old plant or stock that you simply can’t sell? Then write it off before 30 June and get a tax deduction for it this year.


Superannuation gets a bad rap because of poor performance of commercial funds since the GFC. But it is still a very effective tax-saving strategy and you can invest in low-risk investments by asking your superannuation advisor to do so. You just have to ask!

Why pay up to 46.5 per cent in tax on drawings out of the business when you can pay just 15 per cent?

There have been many changes in recent times but up to June 30 this year business owners can put up to $25,000 into superannuation and it will be taxed at only 15 per cent.

Make sure you get your contributions in before June 30. Check with your superfund as many funds have a cut-off date between 20 June and about the 25th of June. If you pay after cut off then you can only claim in the 2014 financial year and the rules change so you might lose out of some or all of your deduction.

Claim before spending a cent

Just because you haven’t paid for something doesn’t mean you can’t claim for it. Businesses can get an immediate deduction for certain expenses that have been “incurred” but not paid by 30 June 2013, including:

  • Salary and wages – claim the number of days that employees have worked up to 30 June, but have not been paid until the new financial year
  • Directors’ fees – claim a tax deduction for directors’ fees that are “definitely committed” to at 30 June and have passed an appropriate resolution to approve the payment
  • Staff bonuses – claim a tax deduction for staff bonuses and commissions that are owed and unpaid at 30 June where the business is “definitely committed” to the expense
  • Repairs and maintenance – claim repairs undertaken and billed by 30 June but not paid until the next financial year.