Act Fast to Reduce Your Tax Bill!
Time is running out.
If you’re expecting a high income this financial year, there are several legitimate ways to reduce your tax bill — but most of them require action before 30 June. That means now is the time to start tax planning.
By putting the right strategies in place, you could save thousands of dollars — money that’s better in your bank account than with the ATO. Whether you want to reinvest in your business, boost your retirement savings, or enjoy a well-earned lifestyle upgrade, acting now gives you more options.
Nine key strategies worth considering.
- Write off bad debts
You’re taxed on income you’ve invoiced — even if it hasn’t been paid. Review your debtors list and write off any bad debts now to avoid paying tax on money you’ll never receive. - Reduce your stock value
The higher your closing stock, the higher your taxable profit. If you’re holding obsolete or slow-moving stock, now is the time to scrap or revalue it down. - Review business assets
Obsolete or unused assets can be written off to reduce your taxable income. There may also be accelerated depreciation options available. Let’s review which approach suits your business best. - Defer income
If your cash flow allows, deferring invoicing until July can push income into the next financial year — and defer the tax liability. However, we recommend discussing this with us to manage any impacts on your budget. - Review advance invoices
If you’ve issued invoices for services that won’t be delivered until the next financial year, you may not need to declare that income yet. Let’s check the details and apply the correct treatment. - Pay June quarter super early
Super is deductible when paid — not when it’s due. By bringing forward the June quarter super payment and making it in June, you can claim the deduction this year rather than next. - Maximise your super contributions
If growing your super is part of your plan, use your annual contribution cap before 30 June. We can help calculate how much you can still contribute. - Finalise staff bonuses
Employee bonuses are tax-deductible when committed to in writing, not just when paid. Finalise and document bonuses now to claim the deduction this year. - Plan for Capital Gains Tax (CGT)
CGT is all about timing. Have you held the asset for more than 12 months? Do you have losses you can realise to offset a gain? Are you eligible for any concessions? We’ll walk you through the options to minimise CGT where possible.
Let’s talk before 30 June.
Yes, that’s really soon!
Don’t leave it too late — small actions now can lead to significant savings later. If any of these apply to you, we need to sit down soon to tailor a strategy for your specific situation. Reach out to our team today.
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If your business provides a car to an employee (or you’re the business owner/employee using it), there’s a good chance the Fringe Benefits Tax (FBT) rules apply. A car fringe benefit arises when a car owned or leased by an employer is made available for the private use of the business owner, an employee or their associate (such as a family member). “Private use” doesn’t just mean weekend road trips — it can include everyday commuting and even cases where the car is parked at an employee’s home, making it available for personal trips. Understanding how FBT is calculated and what records to keep is essential for compliance — and for avoiding paying more tax than necessary. What counts as a “car” for FBT purposes? The FBT law defines a car as a motor vehicle (except a motorcycle or similar) designed to carry less than one tonne and fewer than nine passengers. From 1 July 2022, some zero or low-emission vehicles are exempt from FBT, provided they meet certain criteria — for example, they must be first held and used after 1 July 2022 and must not have attracted Luxury Car Tax. Electric vehicle running costs, such as charging, are also exempt when the vehicle itself qualifies. Two main methods for calculating FBT on cars There are two ways to calculate the taxable value of a car fringe benefit. 1. Statutory formula method This method applies a flat 20% statutory rate to the base value of the car, adjusted for the number of days in the FBT year the car was available for private use. The formula is: (A × B × C ÷ D) − E A = Base value of the car (cost price plus GST and certain accessories, less registration, stamp duty and eligible reductions) B = Statutory fraction (generally 20%) C = Days available for private use D = Total days in FBT year (365) E = Employee contributions If the car has been owned for at least four full FBT years, the base value can be reduced by one-third. 2. Operating cost method This method calculates the taxable value by applying the private use percentage to the total operating costs of the car (actual and deemed costs). The formula is: Taxable value = [Operating costs × (100% − Business use %)] − Employee contributions Operating costs include: Fuel, oil, repairs, maintenance, registration and insurance Lease costs (for leased cars) Deemed depreciation (25% diminishing value) and deemed interest for owned cars Certain costs, such as tolls, car parking and insurance-funded repairs, are excluded. The business use percentage is determined by odometer readings, logbook records, and a reasonable estimate based on usage patterns. The three-month logbook requirement (operating cost method only). If you use the operating cost method, you must keep a logbook for at least 12 continuous weeks (roughly three months) to record: The date of each trip Odometer readings at the start and end Total kilometres travelled Whether the trip was for business or private purposes The purpose of each business trip This logbook is generally valid for five years, but you must start a new one if usage patterns change significantly (e.g., a role change, relocation or different duties). You also need to record odometer readings at the start and end of each FBT year. Why record-keeping matters. Keeping accurate records can support a higher business use percentage (and therefore a lower FBT bill). They also ensure you claim only legitimate business kilometres and help you provide evidence if the ATO reviews your FBT calculation. Finally, your records help you decide which calculation method (statutory or operating cost) is more tax-effective. Key takeaways for businesses and employees. If a car is available for private use, FBT may apply — even if the car isn’t driven often for personal trips. Electric cars may be FBT-exempt if they meet eligibility criteria, but you may still need to calculate their taxable value for reporting purposes. The operating cost method often works better if business use is high — but only if you have a compliant logbook. Keep odometer readings, expense records and a valid logbook to support your claims. Need help with your FBT obligations? Get it at Ascent Accountants. We guide business owners through every step of FBT compliance — from choosing the right valuation method to maintaining the right records for ATO peace of mind. If you provide cars to employees or use a company vehicle yourself, now is the time to review your FBT position before the next FBT year rolls over. Let’s talk .
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