End of Financial Year Tax Planning: What to Review Before 30 June

Tax planning that happens after 30 June is, by definition, too late to change anything — at that point, you're simply reporting what already occurred. Genuine tax planning has to happen in the months leading up to year end, while there's still time to act on what the numbers are telling you. Here's a practical rundown of the areas worth reviewing before the deadline arrives, not after.

Review your actual year-to-date profit, not last year's

The starting point for any sensible tax planning is knowing, reasonably accurately, what the business's taxable profit looks like for the current year so far, and what it's projected to be by 30 June. Many of the strategies below only make sense in the context of that number — bringing forward a deduction is far more valuable in a high-profit year than a low-profit one, and some strategies (like additional super contributions) only make sense if there's actual cash flow to support them. This is the step that's most often skipped, and without it, tax planning becomes guesswork rather than a deliberate decision.

Superannuation contributions

For business owners, particularly those operating through a company or trust, voluntary superannuation contributions are one of the most direct and reliable tax planning levers available, since they're generally deductible to the paying entity within the concessional contribions cap. Two timing details matter enormously here: contributions must actually be received by the super fund (not merely paid or initiated) before 30 June to count for that financial year, and unused concessional cap amounts from the previous five years can, in some circumstances, be used to "catch up" with a larger contribution — but only by those eligible under the carry-forward rules. Leaving this until the last week of June risks contributions not clearing in time, given processing delays some funds experience near year end.

Bringing forward deductible expenses

If cash flow allows, prepaying certain deductible expenses before 30 June — insurance premiums, subscriptions, or interest on investment loans, for example — can bring the deduction forward into the current financial year rather than the next. This is most valuable when the current year's profit (and therefore marginal tax rate) is expected to be meaningfully higher than next year's. It's not a strategy that suits every business, particularly those expecting higher profit next year, where deferring rather than bringing forward expenses may actually be preferable.

Instant asset write-off and depreciation timing

Eligible businesses can often claim an immediate deduction for the cost of eligible depreciating assets, rather than depreciating them over several years — but the specific threshold and eligibility rules change from year to year and depend on business turnover, so this needs checking against current settings rather than assumed from a previous year. Where a business is planning equipment purchases in the near future regardless, timing that purchase before or after 30 June can shift a meaningful deduction between financial years depending on which year benefits more from it.

Writing off bad debts

If the business has genuinely irrecoverable debts on its books — invoices that have been pursued reasonably and are not going to be paid — these can generally be claimed as a bad debt deduction, but only if they're formally written off as bad before year end, with the decision properly documented (such as a board resolution or equivalent for the business structure). Simply carrying an old unpaid invoice on the books without writing it off doesn't generate a deduction, no matter how unlikely it is to ever be collected.

Reviewing trust distributions

For businesses operating through a discretionary trust, resolutions determining how trust distributions will be distributed among beneficiaries generally need to be made and properly documented before 30 June — this is a strict, non-negotiable deadline, not a guideline. Leaving this until after year end, even by a few days, can result in trust income being taxed in the least favourable way possible under the default provisions of the trust deed, often at the highest marginal rate. This is one of the most common, and most costly, year-end mistakes among trust structures, almost always caused by simply running out of time rather than any complexity in the decision itself.

Stocktake and asset reviews

Businesses holding trading stock need to conduct a stocktake at year end (or rely on a simplified method if eligible based on turnover and stock value), and the method chosen for valuing stock can have a real impact on taxable profit for the year. Similarly, reviewing fixed assets for any that have been scrapped, sold, or are no longer in use allows them to be written off rather than continuing to sit on the depreciation schedule indefinitely.

Reviewing director loan accounts

For company structures, amounts a director has drawn from the company beyond salary or properly declared dividends can be treated as deemed dividends or attract Division 7A consequences if not addressed correctly before the company's lodgement day. Reviewing director loan account balances before year end — and putting a complying loan agreement in place where needed — is essential to avoid an unexpected and often substantial tax consequence.

Don't let tax planning drive bad business decisions

A word of caution that applies to every strategy above: a tax deduction is only ever worth a fraction of the expense itself, not the full amount. Spending money purely to generate a deduction, without a genuine business need for that spending, rarely makes sound financial sense — it converts a dollar of cash into, at best, the marginal tax rate's worth of tax saving, while still costing the full dollar. Good tax planning works with decisions that make sense on their own merits and times them well, rather than manufacturing spending purely for a tax outcome.

Why this needs to start before May

Every strategy above depends on accurate, current numbers and enough lead time to actually execute — processing super contributions, documenting trust resolutions, finalising equipment purchases. Businesses that start this process in April or May have genuine optionality. Businesses that start it in the last week of June are mostly just hoping things clear in time.

How ATA Accountants can help

We run a structured year-end tax planning review with business clients well ahead of 30 June, modelling actual numbers rather than generic advice, and making sure time-critical deadlines like super contributions and trust resolutions are met with room to spare.

**Book a consultation** to start your tax planning while there's still time to act on it.