Smart Tax Moves Before Christmas: How to Save Tax Before Year-End

Why November Matters for Tax Planning

As the weather heats up and Christmas decorations start appearing, most business owners shift their focus to wrapping up projects and planning a break. But November is also the sweet spot for getting proactive with tax.

By reviewing your numbers now, you give yourself time to make meaningful adjustments before June 30. That means you can still bring forward deductions, tidy up your structure, and make sure your Xero file reflects the real position of your business.

When you wait until May or June, your options become limited. But in November, you can make genuine strategic decisions to reduce tax, manage cash flow, and even boost your business performance heading into the new year.

1. Review Your Profit Position

The first step is to understand exactly where you stand.
Open your Xero Profit & Loss Report for the financial year so far, ideally on an accrual basis. This will show how your business has actually performed year-to-date, not just how much cash is in the bank.

Look at your revenue trends, margins, and main expenses. Ask questions like:

• Is your profit tracking higher than expected this year?

• Have there been any one-off costs that distorted the result?

• Are there upcoming expenses that haven’t hit the books yet?

Once you know your true profit picture, you can decide whether to bring forward deductions or delay income to smooth out taxable profit.

2. Prepay Deductible Expenses

If you qualify as a small business entity (aggregated turnover under $50 million), you can claim deductions for certain prepayments of up to 12 months in advance.
For example:

• Rent or lease payments

• Subscriptions and software

• Accounting or professional fees

• Business insurance premiums

• Advertising or marketing campaigns

If you know these expenses are coming anyway, paying them before June 30 means the deduction counts in this financial year — effectively pulling forward your tax benefit.

Just make sure you have the cash flow to support it. Tax savings are great, but not if they leave you short for BAS or wages.

3. Review Super Contributions

Superannuation remains one of the most powerful tax tools available to small business owners.
Employer super contributions are generally deductible when paid, not when accrued. That means getting payments in before June 30 can bring forward a deduction.

Check:

• How much has already been paid for each employee

• Any top-ups you want to make for yourself as a director

• The concessional contribution cap

If you’re under the cap and have additional profits, consider making extra contributions.
These reduce taxable income and help you build long-term wealth in a low-tax environment.

And if you haven’t yet taken advantage of the carry-forward contribution rule, you may be able to contribute more if you have unused cap space from prior years.

4. Clean Up Loans and Trust Distributions

Many small businesses operate through companies and trusts, which can create Division 7A issues if director or shareholder loans aren’t properly documented or repaid.

If you’ve drawn money from your company during the year, it’s crucial to check whether it’s been recorded as wages, dividends, or a complying loan.
Unpaid trust distributions to companies can also create Division 7A exposure if left unresolved.

By reviewing these items before Christmas, you can decide whether to:

• Declare dividends before June 30

• Set up loan agreements

• Make repayments

• Or adjust distributions to avoid problems later

Cleaning this up now avoids painful amendments, extra tax, and ATO scrutiny next year.

5. Time Your Invoices and Income

If your business uses accrual accounting, income is generally taxable when it’s invoiced, not when you receive the cash.
That means delaying the issue of certain invoices until July could legitimately shift income into the next financial year.

For example, if you finish a project in late June but can reasonably invoice in July, that income may fall into next year’s return.
Similarly, if you expect a large order or payment before Christmas, consider how timing affects your cash flow and tax position.

It’s not about manipulating numbers; it’s about being strategic with legitimate timing decisions that suit your business.

6. Make the Most of Asset Deductions

The instant asset write-off and temporary full expensing rules have changed frequently, so it’s important to check the current thresholds before purchasing major equipment.
As of now, the government plans to set a $20,000 threshold for small businesses.

If you’ve been considering upgrading a computer, phone system, or office equipment, doing it before June 30 could still provide a deduction in the current year.
However, make sure the purchase aligns with your business needs, don’t buy simply for tax reasons.

7. Keep Your Xero File Tidy

A clean Xero file makes tax planning and compliance dramatically easier.

Run these quick checks before Christmas:

• Bank reconciliations are 100% complete

• Old unreconciled items in bank feeds are resolved

• Payroll is matching the ATO’s STP records

• Expense claims are reviewed for business vs personal items

• GST codes are correct, especially on asset or mixed-use purchases

The goal is to make sure the numbers you’re using for tax planning are accurate.
Even small errors in coding or timing can distort your position.

8. Forecast Cash Flow for the Next 6 Months

Tax planning isn’t just about saving tax — it’s also about managing cash.
Use Xero’s short-term cash flow tool or a 13-week forecast spreadsheet to see your upcoming obligations: BAS, super, loan repayments, and wages.
Knowing your forward position helps you plan for payments and avoid the common Christmas-to-March cash crunch.

9. Consider Restructuring or Profit Extraction Options

If your business has grown significantly, it may be time to review your structure.
For example:

• Should profits stay in the company at 25% tax rate, or be distributed to shareholders?

• Are you using a corporate beneficiary appropriately?

• Is there an opportunity to roll into a more efficient trust or company setup for future growth?

These discussions are best had well before June when there’s time to implement properly.

10. Book a Pre-Christmas Tax Review

By the time December arrives, most business owners have mentally checked out. But booking a pre-Christmas meeting with your accountant is one of the simplest ways to ensure you’re not missing opportunities.

A quick review can uncover:

• Missed deductions

• Structuring opportunities

• Timing adjustments

• FBT exposure for staff events

• And strategies to improve your financial position going into the new year

A one-hour session now can save you thousands later.

Final Thoughts

Tax planning isn’t just for big corporations. Every small business owner can benefit from looking ahead and using the tools available.
The goal isn’t to “beat” the tax system, it’s to work within it smartly and legally.

By taking action in November and December, you give yourself choices. You’ll start the new year with confidence, knowing your tax position, cash flow, and structure are working for you, not against you.

If you want to review your numbers and lock in some tax savings before Christmas, contact us for a pre-Christmas tax planning session.
We’ll help you use your Xero data to identify opportunities, reduce your 2026 tax bill, and plan for a stronger new year.