4 Tax Concessions Every Small Business Should Know Before June 30 | Finlease

If your business turns over less than $10 million a year, the ATO has a set of rules that work in your favour. Most small business owners know a little about them. Far fewer use them as well as they could. These concessions exist specifically for businesses at your stage. The government calls them “Small Business Entity” concessions, and they are designed to make your tax obligations simpler and, in many cases, to let you bring deductions forward so you are not waiting years to see the benefit.

Used well, they can meaningfully improve your cash flow. Used poorly, or not at all, you may be paying more tax than you need to, or deferring deductions that could be working for you right now. Here are the four areas worth understanding before the end of the financial year:

1. Simplified Tax System (STS) / Small Business Entity Concessions

The old term “STS” (Simplified Tax System) is still commonly used, although the ATO now mainly refers to these as “Small Business Entity concessions”.

What this means in practical terms is:

• simpler depreciation rules
• easier stock rules
• faster deductions
• ability to prepay certain expenses
• easier restructuring
• simplified record keeping in some areas

For many businesses, the real benefit is not necessarily paying less tax overall but bringing deductions forward earlier to improve cash flow.

2. Instant Asset Write-Off

This is usually the most valuable concession.

Eligible businesses under $10 million turnover can immediately claim deductions for eligible assets under the threshold rather than depreciating them over several years.

At present:

• the threshold is generally $20,000 per asset
• applies per individual asset
• assets must be installed and ready for use
• can include new or second-hand assets

Examples:

• tools
• trailers
• computers
• office equipment
• machinery (under threshold)

Example:

A plumbing company buys:

• 3 laptops @ $3,000 each
• a trailer for $12,000
• office furniture for $8,000

Instead of depreciating those items over 3–10 years, the business may be able to claim the entire amount immediately in that financial year.

That can create a very meaningful reduction in taxable profit and improve cash flow.

The 2026 Federal Budget also announced the intention to make the $20,000 instant asset write-off permanent for businesses under $10 million turnover.

3. Simplified Depreciation Pool

For assets above the instant write-off threshold, small businesses can use a simplified depreciation pool.

Rather than calculating different depreciation rates for every asset:

• 15% deduction in the first year
• 30% deduction each year after

This makes accounting much simpler.

Example:

A business buys:

• a $150,000 machine

Instead of complex depreciation schedules:

• first year deduction = $22,500
• future years = 30% reducing balance

4. Prepaying Expenses (Very Powerful for Tax Planning)

This is one of the most useful concessions for profitable small businesses.

Eligible small businesses can prepay certain expenses for up to 12 months and claim the deduction immediately.

Typical prepaid expenses include:

• interest
• rent
• insurance
• software subscriptions
• accounting fees
• advertising
• memberships
• income protection insurance
• some service contracts

Example:

A company expects a strong profit this year.

In June it prepays:

• 12 months rent = $48,000
• annual insurance = $14,000
• software subscriptions = $6,000

Potential immediate deduction:

• $68,000

These concessions are worth knowing about, but they work best when they are part of a plan, not just a last-minute scramble before June 30.

If you are a Finlease client and you are thinking about purchasing equipment or vehicles before the end of the financial year, the timing of that decision can matter more than most people realise. Financing an eligible asset before 30 June could mean an immediate deduction this financial year rather than waiting.

It is worth talking to your accountant about your specific situation. And if you want to understand how equipment finance fits into your year-end planning, our brokers are happy to walk you through the options.

Talk to a Finlease broker today. No obligation, no jargon. Just a straight conversation about what makes sense for your business.