Five tax planning priorities for small businesses before 30 June 2026
Corinne Kirk · May 04, 2026 · Accounting and Taxation
For businesses with aggregated annual turnover under $10 million, the Australian tax system provides a substantial suite of concessions that are not available to larger entities. The consistent finding in our work with small business clients is that a meaningful proportion of these concessions go unclaimed. The cause is rarely negligence. It is the ordinary pressure of running a business, and the assumption that the accountant will pick them up at lodgement time.
Lodgement time is too late for most of them. What follows are five planning actions for small business entities, each of which requires attention before 30 June 2026.
1. The instant asset write-off: act before 30 June
For the 2025–26 financial year, small business entities can immediately deduct the full cost of eligible assets costing less than $20,000, provided the asset is first used or installed ready for use before 30 June 2026. From 1 July 2026, this threshold reverts to $1,000 unless further legislation is passed.
The $1,000 figure is the base threshold in the legislation, and it renders the write-off functionally irrelevant for most business asset purchases.
The installation requirement deserves particular attention. Purchasing an asset before 30 June is not sufficient. The asset must be physically received, installed, and ready for use in the business before that date. An order placed in mid-June for equipment that arrives in July does not qualify for 2025–26. Allow adequate lead time.
Also worth noting: if the closing balance of your small business depreciation pool falls below $20,000 at 30 June 2026, the entire remaining balance can be written off immediately. This is worth checking before year-end.
2. Prepay deductible expenses before 30 June
Small business entities can claim an immediate deduction for prepaid business expenses where the benefit period does not exceed 12 months and ends before the end of the next income year. This means that expenses paid before 30 June 2026 for services or benefits extending into the 2026–27 year — insurance premiums, software subscriptions, professional memberships, lease payments — can be deducted in 2025–26, accelerating the timing of the deduction.
The 12-month rule is the operative constraint. A prepayment for a period longer than 12 months does not qualify for the immediate deduction and must be apportioned.
For businesses with a profitable 2025–26 year facing a tax bill, prepaying eligible expenses before 30 June is one of the cleanest and most straightforward planning tools available.
3. Review debtors and write off unrecoverable amounts
A debt that is genuinely unrecoverable can be written off before 30 June and claimed as a deduction in the 2025–26 financial year. The deduction is available in the year the debt is written off — not the year the debt became doubtful, and not the year it is finally confirmed as uncollectable. The deduction is available only where the amount was previously included in assessable income — for a business accounting on an accruals basis, that is usually the case for trade debtors.
The practical requirement is that the decision to write off the debt is made before 30 June and is properly documented. A formal decision by the business to write off the debt — recorded in writing — is sufficient. The ATO does not require that recovery action be exhausted before a write-off is recognised.
For businesses that have been carrying debtors for twelve months or more without recovery, a review of the debtors ledger before 30 June is a worthwhile exercise. The write-off reduces taxable income in the current year and clears the balance sheet of amounts unlikely to be recovered regardless.
4. Superannuation contributions for business owners
Concessional superannuation contributions — employer contributions and personally deductible contributions — are taxed at 15 per cent inside the fund (30 per cent where Division 293 applies) rather than at the business owner's marginal rate. The concessional contributions cap for 2025–26 is $30,000, inclusive of employer contributions.
For business owners who have not maximised their concessional contributions in prior years and whose total superannuation balance was below $500,000 on 30 June 2025, carry-forward rules may allow a contribution larger than the standard $30,000 cap this year.
Two timing rules matter. Contributions must be received by the superannuation fund by 30 June to count in 2025–26 — not merely transferred by that date. And a notice of intent to claim a deduction must be lodged with the fund before the earlier of the lodgement of the owner’s personal income tax return for 2025–26 or 30 June 2027. Both conditions must be met.
5. Trust resolutions: the deadline is 30 June, not later
For businesses operating through discretionary trusts, the trustee must make and document a decision on how trust income is to be distributed to beneficiaries before 30 June 2026 — or an earlier date if required by the trust deed. This requirement is not satisfied by signing minutes after 30 June.
The Goldenville Family Trust case decided by the Administrative Review Tribunal in 2025 confirmed what the ATO has long maintained: a resolution signed after year-end, without contemporaneous evidence that the decision was made before 30 June, can be declared invalid. The tax consequence of an invalid resolution is that income is assessed against the default beneficiary or the trustee at penalty rates — neither of which is likely to be the intended outcome.
The practical standard is not onerous. A written record of the trustees' decision before 30 June — an email to the accountant confirming the distribution decision, meeting notes, or a signed circular resolution — is sufficient contemporaneous evidence in most cases. The formal minutes can be prepared and signed after 30 June provided they accurately reflect a decision made before that date.
If you would like to work through any of these matters in the context of your specific business before 30 June, we welcome the conversation.
Corinne Kirk
Partner, Accountant
1300 102 542 | 0405 106 401
corinne@egu.au
Sources
- Australian Taxation Office — Instant asset write-off for small businesses: https://www.ato.gov.au/businesses-and-organisations/small-business-newsroom/20000-instant-asset-write-off-for-2025-26
- Australian Taxation Office — Simplified depreciation rules: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business
- Australian Taxation Office — Prepaid expenses: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/in-detail/deductions/prepaid-expenses
- Australian Taxation Office — Bad debts: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/in-detail/deductions/deductions-for-unrecoverable-income-bad-debts
- Australian Taxation Office — Concessional contributions cap: https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/concessional-contributions-cap
- Administrative Review Tribunal — The Trustee for Goldenville Family Trust and Commissioner of Taxation [2025] ARTA 1355 (13 August 2025)
This is general advice. It does not take account of your objectives, financial situation, or needs, and is not a substitute for advice that does. Before acting on anything in it, consider whether it suits your circumstances, and consider the relevant Product Disclosure Statement.