Tax changes small businesses need to know before EOFY

Nobody wants to pay more tax than they need to. That’s especially true if you run a small business, where every dollar counts. So, what are the tax changes you need to know about before the end of the financial year?

Instant asset write-off

One of the most significant announcements in the 2024 Federal Budget was an extension of the government’s instant asset write-off for small businesses. This is one of the key ways the ATO supports small business operators, with the opportunity to deduct the $20,000 from eligible capital assets in a single financial year, rather than having to depreciate it over several years. This was originally scheduled to end this year but will continue until at least June 30, 2025.

As long as the asset is related to the business it’s eligible to be written off, so this includes everything from computers and EFTPOS systems to security equipment, tools, office furniture, solar systems and even new vehicles up to $64,741. So if you’re thinking about making a large purchase for your business, do it before June 30 so you can include the entire amount in this year’s return and give yourself scope for further opportunities next year.

Energy Bill Relief Fund

Another inclusion in the latest budget is an extension of the Energy Bill Relief Fund, which allows small businesses to get a $325 rebate each year. It’s worth remembering that small business owners can pay business expenses before the end of the current financial year, even if the service you’re paying for moves into the following fiscal period. For example, you can pay your business insurance premium or rent in advance and claim the deduction in your next return, which could be helpful for many smaller operations.

GST Payments

There was more good news for business, too, with no changes to the GST payment options of the Capital Gains Tax (CGT) concessions that are currently available.

The ATO has tried to make paying GST easier for small businesses by offering a variety of ways to pay. The most obvious way to help make paying GST simpler is to pay in quarterly instalments, based on the most recent tax return. This is designed to reduce the amount of tax owed at the end of the year and any complications in calculating an annual amount of GST.

Another option for small businesses is that if they are using some items privately, the owner can choose to claim the full GST amount and then make a single adjustment for the percentage of private use at the end of the financial year. The concessions on CGT allow you to reduce, defer or disregard some or all of your capital gains if you’re working for a small business. There are four specific areas this applies to - the 15-year exemption, the retirement exemption, the 50 per cent active asset reduction and the CGT rollover – and each allows the potential for significant financial savings.

Keeping records

One thing that hasn’t changed is the requirement for all small businesses to keep records for five years. It doesn’t matter if it’s on paper or digital, but all small businesses need to be able to show the Australian Tax Office (ATO) records including sales receipts, expense invoices, bank statements, employee records, asset records and vehicle records.

This is why we here at Shell are always looking for ways to make life easier, especially at tax time, for small business operators. Our Shell Card can be integrated with either MYOB or Xero accounting software and can track all your spending on the card so all your records are at your fingertips when you need them, which will make tax time easier and ensure you get the best financial outcome.

Please note, the advice in this article is general in nature and we advise seeking professional guidance before making any decisions. So speak to your accountant or financial advisor to ensure you get the latest information.

^Disclaimer

^{Viva Energy Australia Pty Ltd (“Viva Energy”) has compiled the above article for your general information and to use as a general reference. Whilst all reasonable care has been taken by Viva Energy in compiling this article, Viva Energy does not warrant or represent that the information in the article is free from errors or omissions or is suitable for your intended use.}