5 tax surprises that catch small business owners
Small business tax issues are rarely caused by one big mistake. It’s usually a handful of common traps that quietly build up until you get an ATO notice — or a nasty cash-flow crunch. Here are five of the most common surprises we see, and what to do about them.
1) PAYG instalments arrive before you feel “profitable”
PAYG instalments are essentially prepayments of your expected tax on business and investment income. The surprise isn’t that they exist — it’s how quickly they can become a cash-flow problem if you’re not planning for them.
- Build instalments into your cash-flow planning (don’t treat it as “future you’s problem”).
- If income has genuinely dropped, varying instalments may be appropriate — but do it carefully so you don’t underpay and get hit later.
2) Super deadlines: being late by even a day can hurt
Super guarantee payments have hard deadlines. If payments are late, you can end up in the super guarantee charge (SGC) regime — which can mean no deduction plus penalties and interest. This catches good operators out because it often happens when cash flow is tight and people “push it a week”.
3) ATO interest is now non-deductible — it’s a real cost
From 1 July 2025, the ATO’s general interest charge (GIC) and shortfall interest charge (SIC) became non-deductible. In plain English: if you’re behind, the interest now hurts more because there’s no tax “softening” via a deduction.
4) Buying assets at year-end: timing and eligibility matter
Year-end purchases can be tax-effective, but only if you’re eligible for the relevant depreciation treatment and the asset is actually first used or installed ready for use in time. Buying something on 29 June doesn’t automatically mean you get the deduction in that year.
- Plan purchases early enough to allow delivery/installation/commissioning.
- Confirm eligibility and the correct depreciation method before spending.
5) “We’ll sort the paperwork later” (trust/company decisions)
If you use a trust or company structure, year-end decisions can have real tax consequences — but only if they’re made on time and properly documented. The risk is assuming you can backfill documents after the fact.
If this is relevant for you, see: Trust resolutions — why timing and documentation matter.
In a nutshell
The common thread across these surprises is timing: payments, decisions, and documentation. If you want, we can help you put a simple year-round compliance rhythm in place so nothing sneaks up on you.
General information only — not advice. Tax outcomes depend on your circumstances.
If you would like to talk through how this applies to your situation, you are welcome to book an appointment or contact us.