Running a small business in Australia is exciting, but let’s be real, tax time? Not so much.
Between managing GST, superannuation, figuring out deductions, and keeping the ATO happy, it’s easy to feel overwhelmed. That’s where Tax Advisory Services Australia steps in — not just to help you stay compliant, but to help your business thrive.
At ICS, we specialise in guiding Australian small businesses through the ever-changing tax landscape with confidence and clarity.
Why Small Businesses Need Expert Tax Support
You might think handling your own taxes saves you dollars. But in reality? It often leads to missed deductions, errors that invite audits, or worse — late payments and penalties.
Think of it like this: you wouldn’t try to do surgery on yourself. So why go solo on complex tax matters?
The Australian Taxation Office (ATO) is using more advanced tools to monitor activity in real-time. Even simple admin mistakes can now trigger audits. That’s why having a tax expert in your corner is a smart investment.
Your Core Tax Obligations as a Small Business
Here’s a quick look at the tax responsibilities every small business owner should understand:
1. Income Tax
How you pay income tax depends on your business structure:
- Sole Trader: Your business earnings are treated as your personal income for tax purposes. You’ll pay tax based on individual income tax brackets. For 2025-26, the first $18,200 is tax-free; rates range from 16% to 45% plus the Medicare levy.
- Company: No tax-free threshold. Companies pay a flat tax rate — 25% if you qualify as a “base rate entity” (turnover under $50 million and 80% or less from passive income), or 30% if not.
- Partnership or Trust: Income is distributed to the individual partners or beneficiaries, who then pay tax on their share.
2. GST (Goods and Services Tax)
If your annual turnover hits $75,000 or more, GST registration is compulsory. You’ll need to:
- Collect 10% GST on most sales.
- Claim credits on business purchases.
- Submit a Business Activity Statement (BAS), usually on a quarterly basis.
Even if you’re under the threshold, voluntary registration can help with cash flow if you incur significant expenses early on.
3. PAYG (Pay As You Go) Withholding
If you hire employees (or certain contractors), you must:
- Deduct tax from their wages and remit it to the ATO.
- Make PAYG instalments to prepay business income tax, based on your projected earnings.
4. Superannuation Guarantee
Starting 1 July 2025, superannuation contributions for qualifying employees rise to 12%. Make sure your payroll is updated — missing this could lead to hefty penalties.
5. State Taxes
Depending on where you operate, you may also need to pay:
- Payroll Tax: You’ll pay Payroll Tax if your total wages exceed state thresholds (like $1.2 million in NSW).
- Land Tax: For property-owning businesses, thresholds and rates vary by state. From 2025, NSW land tax thresholds will be fixed, potentially increasing tax exposure over time.
Maximise Deductions with Smart Planning
One of the biggest perks of using Tax Advisory Services Australia is uncovering deductions you might otherwise miss. Some common and often overlooked deductions include:
Home Office Expenses
Whether you’re working from a spare room or a full-blown home office, you may be able to claim:
- A flat hourly rate (e.g., 67 cents) covers energy, internet, and phone costs.
- Or, the actual cost method, which lets you claim a portion of rent, utilities, and depreciation, though it requires detailed record-keeping.
Vehicle & Travel
When you use your car for business, you have a couple of options:
- Cents-per-kilometre (up to 5,000 km/year at 88 cents/km).
- Or the logbook method, which may yield higher deductions if used consistently.
Business trips? You can claim accommodation, meals, and other related expenses, as long as it’s properly documented.
Instant Asset Write-Off
Until 30 June 2025, small businesses (turnover under $10 million) can instantly deduct assets under $20,000 per item. This includes tools, laptops, office furniture, and more.
Planning to buy? Do it before the end of the financial year — and make sure it’s ready for use.
Key Tax Concessions for Small Businesses
Here’s what you could be entitled to:
- Small Business Income Tax Offset: Up to $1,000/year for sole traders or partnerships (turnover < $5M).
- CGT Concessions: Sell your active business assets and potentially pay no CGT, or significantly less (turnover < $2M)
- Immediate Deduction for Prepaid Expenses: Prepay rent, insurance, or subscriptions and claim it this year.
- Simplified Trading Stock Rules: Skip stocktake if changes are under $5,000.
- Simplified Depreciation Rules: Depreciate eligible assets faster by pooling them, even if they’re above the instant asset write-off threshold.
As your business grows, some of these concessions may no longer apply, so stay on top of your aggregated turnover and plan accordingly.
Avoid Common Tax Pitfalls
Here are some mistakes that cost businesses thousands each year:
- Poor record keeping: Without proper records, deductions are difficult to substantiate.
- Missing registrations: Forgetting GST or PAYG can lead to serious penalties.
- Mixing business and personal expenses: Always keep separate accounts.
- Not setting aside money for tax: Avoid the year-end panic by setting money aside quarterly.
- Late or unpaid superannuation payments: This results in the Superannuation Guarantee Charge (SGC) and significant penalties.
- Incorrect GST reporting: A frequent reason for audits, such as claiming GST credits for non-GST expenses.
- Ignoring professional advice: It’s cheaper to get it right upfront than fix costly errors later.
And remember, from 1 July 2025, ATO interest charges will no longer be tax-deductible. That means late payments just got more expensive — both literally and in terms of cash flow.
When Should You Call a Tax Advisor?
Some moments you definitely shouldn’t do it alone:
- Starting or changing your business structure.
- Hiring employees for the first time.
- Hitting the GST threshold.
- Making big purchases or selling assets.
If you’re ever unsure, it’s always better to ask than guess.
Final Thoughts
Tax doesn’t have to be a nightmare. With the right knowledge and expert support, it can actually be a powerful tool to grow your business.
Tax Advisory Services Australia isn’t just about keeping the ATO happy — it’s about building a stronger, more profitable future for your business.
Let ICS guide you there.
We offer straightforward, reliable, and tailored tax advice for Australian small businesses like yours.
Contact us today to make tax simpler and discover smarter ways to manage your finances.
