If your tax strategy starts and finishes with a shoebox full of receipts in June, you’re probably leaving money on the table.
The 2026–27 financial year is already underway, which means now is the time to start thinking about your tax position — not next June when the deadline is staring you in the face.
For small business owners and tradies, good tax planning isn’t about dodging tax. It’s about making sure you’re claiming everything you’re entitled to, understanding the rules that apply to you, and making smart decisions about when you spend, invest, pay yourself and sell assets.
There are also some important changes this year that could affect the way you plan, including changes to superannuation, Payday Super, Division 7A, personal income tax rates and the new capital gains tax rules.
Some of these changes are already law. Others are still working their way through Parliament.
So, what should you be thinking about now?
Here are some of the key tax planning strategies I’d be discussing with my small business clients right now.
A quick note before we get started: This is general information only and doesn’t take into account your individual circumstances. Tax rules can be complicated, so always speak with your accountant or registered tax agent before making decisions based on the strategies below.
1. Thinking about buying a ute, tools or equipment? Know the instant asset write-off rules.
If you’re planning to spend money on your business this year, the instant asset write-off is one of the first things worth talking to your accountant about.
For the 2025–26 financial year, businesses with an aggregated turnover of less than $10 million could immediately deduct eligible depreciating assets costing less than $20,000, provided the asset was first used or installed ready for use by 30 June 2026.
The $20,000 threshold was law for that financial year.
For 2026–27, the Government announced in the May 2026 Federal Budget that it intends to make the $20,000 threshold permanent from 1 July 2026.
There’s just one catch: at the time of writing, the legislation had not yet passed Parliament.
Until that happens, the legislated default threshold reverts to $1,000.
So, if you’re looking at buying a new ute, tools, machinery or other equipment, don’t make the decision based purely on the assumption that the $20,000 threshold will become law.
It may well proceed, but your accountant can confirm the position when you’re ready to buy and make sure you understand exactly how the purchase will be treated for tax purposes.
The takeaway? Don’t wait until June to think about major purchases. If you’re going to spend the money anyway, the timing could make a real difference to your tax position.
2. Don’t forget about super — especially if you’ve had a good year.
Superannuation isn’t just something to think about when you retire.
For business owners, it can also be a very effective way to build wealth while potentially reducing your taxable income.
For 2026–27, the concessional super contribution cap has increased to $32,500, up from $30,000 last year.
If you’re a sole trader, or operate your business through a company or trust, making a personal deductible super contribution before 30 June could reduce your taxable income, provided you meet the relevant requirements and stay within your contribution limits.
And there’s another opportunity worth checking.
If you haven’t used your full concessional contribution cap in previous years, you may be able to use those unused amounts through the carry-forward contribution rules.
Generally, this is available if your total superannuation balance was less than $500,000 at the end of the previous financial year, and it allows eligible unused amounts from up to five previous years to be carried forward.
This can be particularly useful if you’ve had a bumper year in the business and suddenly find yourself facing a much bigger tax bill than usual.
And if you have employees, Payday Super is a big change.
The superannuation guarantee rate remains at 12% for 2026–27.
However, from 1 July 2026, Payday Super is now in effect.
Instead of paying super quarterly, employers are required to pay super contributions within seven business days of each pay run.
That means it’s important to check your payroll systems, processes and cash flow.
It’s not a change to the super rate — it’s a change to when you have to pay it.
If you employ people and haven’t reviewed your payroll process yet, now is a good time.
3. If you run your business through a company, check your Division 7A position.
This is one that can catch business owners out.
If you operate through a company and regularly take money out of the business for personal expenses, pay yourself through drawings, or have loans between the company and yourself or related entities, you need to make sure those transactions are being handled correctly.
The Division 7A benchmark interest rate for 2026–27 is 8.77%, up from 8.37% in 2025–26.
If you have a complying Division 7A loan, the loan generally needs to charge at least the benchmark interest rate, and the required minimum yearly repayments need to be made by 30 June.
Get it wrong and you could end up with an unexpected unfranked deemed dividend — and an unpleasant tax bill.
If you’ve been taking money from your company informally during the year, don’t wait until tax time to ask questions.
Get your accountant involved early.
While you’re at it, ask whether your business structure still makes sense.
Your business might have started as a sole trader because it was simple and inexpensive.
But if the business has grown significantly since then, your circumstances may have changed too.
It’s worth reviewing whether operating as a sole trader, partnership, trust or company still gives you the right combination of tax treatment, asset protection and flexibility.
And if you operate as a sole trader, partnership or trust, don’t forget to check whether you qualify for the small business income tax offset.
Eligible businesses with aggregated turnover under $5 million can receive a 16% offset on tax payable on their net small business income, capped at $1,000 per year.
It’s generally applied automatically by the ATO, but it’s still worth checking your assessment to make sure everything has been taken into account correctly.
4. Think about when you spend and receive money.
Good tax planning isn’t just about what you spend. Timing matters too.
Depending on your circumstances, you may be able to bring forward certain deductible expenses into the current financial year.
That could include things like:
- Repairs and maintenance
- Consumables
- Business subscriptions
- Professional fees
- Certain prepaid expenses
On the other side of the equation, there may be situations where legitimately deferring income until the following financial year makes sense.
This can be particularly useful if you expect your income to drop next year or if you’re close to an income threshold that affects a tax offset or concession.
But there’s an important point here: don’t spend $1 just to save 30 or 40 cents in tax.
Tax planning should support good business decisions — not drive them.
The prepayment and income recognition rules can also vary depending on your circumstances, so talk to your accountant before making assumptions about what you can bring forward or defer.
5. There’s a new personal income tax cut — but don’t expect it to transform your tax bill.
From 1 July 2026, the tax rate applying to income between $18,201 and $45,000 has dropped from 16% to 15%.
There’s another reduction to 14% legislated to begin from 1 July 2027.
If you’re a sole trader or business owner receiving wages or trust distributions, this should reduce the tax payable on income within that bracket.
It’s worth factoring the change into your personal cash-flow planning, but for most established trading businesses, it’s unlikely to make a dramatic difference to the overall tax bill on its own.
6. The CGT rules have changed — and this one is worth paying attention to.
If you’re thinking about selling your business, commercial property or a significant investment, this could be one of the most important tax changes you need to understand.
And unlike some of the other proposed tax changes you may have heard about, the capital gains tax overhaul is now law.
The relevant legislation passed Parliament with amendments and received Royal Assent on 26 June 2026.
So, what does it actually mean?
From 1 July 2027, the current 50% CGT discount changes.
For individuals, partners in partnerships and trusts, the existing 50% CGT discount will be replaced with a cost-base indexation method, which adjusts the cost base for inflation using the CPI, together with a new 30% minimum tax on relevant capital gains.
However, there is an important transition rule.
Capital gains that accrue up to 30 June 2027 remain eligible for the existing 50% discount.
Assets will effectively be treated as sold and reacquired at their market value on 1 July 2027, meaning gains that have built up before the transition aren’t retrospectively caught by the new rules.
There are some important exceptions and concessions.
The final legislation retains the small business CGT concessions in Division 152.
In fact, the aggregated turnover threshold for the small business 50% active asset reduction has increased from $2 million to $10 million.
New residential dwellings and qualifying affordable housing also retain access to the existing 50% discount — or up to 60% for affordable housing — as an alternative to the new regime, subject to the relevant requirements.
Superannuation is also unaffected, with the one-third CGT discount in the accumulation phase and the 0% tax rate in pension phase continuing to apply.
There are still some technical interaction issues being worked through, including areas such as part-year residency and tax consolidation settings, but the core framework is now law.
Why should you care?
If you’re thinking about selling a business, commercial property or investment asset in the next couple of years, the timing of that sale could become very important.
The good news is that we now have greater certainty around the rules.
So, if a sale is on the horizon, don’t wait until 2027 to start the conversation.
The earlier you understand the potential tax consequences, the more options you may have.
7. Keep an eye on GST and PAYG instalments.
Sometimes tax planning is simply about making sure the basics are right.
If your business turnover is approaching $75,000, check that your GST registration position is correct. For non-profit organisations, the threshold is $150,000.
Getting your GST registration or deregistration timing wrong can create unnecessary headaches.
Likewise, if you pay PAYG instalments, take a look at whether the amount calculated by the ATO still reflects your expected income for the year.
If your circumstances have genuinely changed, you may be able to vary your instalments.
Just be careful: if you significantly underestimate your liability, penalties can apply.
8. And finally, don’t underestimate the boring stuff.
We know — record-keeping isn’t exactly exciting.
But for tradies and small business owners, getting the basics right can have a bigger impact than chasing the latest tax strategy.
Make sure you’re:
- Keeping an accurate logbook or appropriate records for business vehicle use
- Keeping receipts and invoices for tools and equipment
- Correctly apportioning home office and workshop expenses
- Keeping business and personal expenses separate
- Recording expenses throughout the year rather than trying to remember everything at tax time
Good records give your accountant the evidence they need to claim the deductions and concessions you’re entitled to.
And remember: a great tax strategy is no use if you can’t substantiate the claim.
The Bottom Line: Don’t Wait Until June
There’s a lot happening in the tax world this financial year.
Some changes are already locked in, including the personal income tax cut, new superannuation caps, Payday Super, the updated Division 7A rate and the major CGT changes coming from 1 July 2027.
The proposed permanent $20,000 instant asset write-off threshold is the major measure that, at the time of writing, is still awaiting Parliamentary approval.
The best thing you can do is stay informed, plan ahead and regularly review your position with your accountant.
Because when it comes to tax, waiting until June can leave you with very few options.
Whether you’re planning to buy a new ute, invest in equipment, make additional super contributions, restructure your business or sell a major asset, the decisions you make during the year can have a significant impact on the tax you ultimately pay.
There’s no magic checklist that works for every business. The right strategy depends on your business structure, turnover, cash flow, personal circumstances and what you’re planning to do over the next couple of years.
Want to know what you could be doing now to reduce your tax bill next year?
Give our team a call on 0450 036 225. We can help you understand the changes, identify opportunities and put a plan in place before tax time catches up with you.
