Your end-of-financial-year (EOFY) tax checklist for electrical contractors

Rather be making sparks fly than doing paperwork? We hear you. To help streamline the tax time process, follow this EOFY checklist for electrical contractors to ensure maximum deductions and compliance.

The best part about running your own electrical business? Being your own boss, training the next generation of sparkies, lighting up the community (literally). The worst part? Tax time. Two words that send shivers down even the toughest of tradie spines. But as the saying goes, it’s one of life’s certainties, so we better be prepared. To make sure you’re paying what’s needed and claiming what you’re entitled to, check out our comprehensive EOFY checklist.

1.      Meet with your accountant – now!

Part of being a good boss is knowing when to outsource – tax time is one of those moments. While there’s a certain number of ‘do-it-yourself’ tax tasks that come with being a business owner, bringing in the professionals at the right time will help optimise your business and ultimately improve the bottom line.

If you haven’t already had a chat with your accountant in the run up to June 30, do so now. There may be some simple actions you can take to ensure you minimise the tax you’ll need to pay.

And, if you’ve left it too late already, put a calendar reminder in for earlier next year.

“The earlier you go through what you’ve spent, how much it was, and what category it sits in, the better,” says Chartered Accountant Shaun Bettman. “You want to be ahead of it, not scrambling in the last week of June trying to fix mistakes.”

2.    Do a stocktake

Is your shed/garage/ute bursting at the seams? Now’s your chance to make a list of all the inventory you’re holding. Why? Because it’s considered an asset for tax purposes and you’ll need to declare the value. Keep your eyes peeled for any defects or deterioration too, in case there are certain items that can be written off – a key step that could help reduce your tax liability. This is also a crucial move when it comes to work safety – ensuring all products are in tip-top shape for your next job.

3.    Do you need to invest in equipment?

For the 2024-25 financial year, there’s a $20,000 instant asset write off scheme, which means any purchases $20k or under that are ready to use this financial year can be written off in full in this tax year. While it might not be enough for a new ute, there’s plenty of things you may need to invest in under that threshold – and you can make multiple purchases, too.

Be careful you don’t exceed the threshold value, though.

Shaun says, “I see a lot of sparkies go out and buy a heap of gear near the end of the year, thinking they can write it all off straight away. But if what you’ve spent is over the instant asset write-off limit, it doesn’t work like that. You can’t just claim the full amount. It has to be broken down and depreciated over time. If you skip that step and just drop it all into your expenses, you’ll overstate your deductions and mess with your taxable income.”

4.   Subcontractor records and compliance

If you’ve got subcontractors working under you, your records need to be sorted before June ends. That means every payment you’ve made to them should be logged properly, with their ABNs recorded and all the payment details ready for your Taxable Payments Annual Report.

Shaun says, “Don’t leave this for your accountant to chase later. I have seen plenty of business owners scramble through old invoices trying to piece things together at the last minute, and it never ends well.

“On top of that, check your PAYG withholding and super contributions for those subbies. If you’ve agreed to handle their super or had withholding obligations, make sure those payments are not only processed but fully cleared with the ATO. If you’re behind or missing info, it will hit your cashflow and could cause problems if margins are already tight. Better to sort it now than cop a surprise later.”

5.    Vehicle use and documentation

If you’re planning to claim a ute or van as a business expense, your logbook needs to be sorted. The ATO pays close attention to vehicle claims, especially from tradies. You can’t just guess your numbers or throw out a rough estimate. Your logbook has to be accurate, up to date, and match things like your fuel receipts, service records, and general usage.

If you’re using your personal car for business, you’ve got to be even more careful, says Shaun/

“You need to show exactly how much of that use was for work. Saying ‘I drive to jobs every day’ doesn’t cut it. Without solid records, you’ll lose the deduction. The ATO wants proof, not stories. So keep your logbook detailed and consistent, and make sure it all lines up with the other documents.”

6.   Consider the future

One word – superannuation. If you’re a sole trader, you’re not technically obliged to pay into a super fund, but making regular payments to prepare for your retirement is a smart move. Have a chat with your accountant about setting this up, as there are certain tax benefits that come into play here too.

While we’re talking about the future, how’s that looking from a business perspective? Is your business set up in the best way possible?

If you’re still operating as a sole trader and your business is bringing in over $200,000, there’s a good chance you’re paying more tax than you need to, says Shaun.

“At that income level, it’s worth looking at whether a company or trust setup might suit you better. The right structure depends on how your income comes in, who’s involved in the business, and what your plans are down the track.

“This isn’t something you can sort out with generic advice. You need to sit with someone who actually understands trade businesses and how they work day to day. The right structure can reduce your tax, offer better protection, and will help you keep more of what you earn. Too many contractors avoid changing anything because it sounds like a headache. But doing nothing year after year costs more than people think.”

Of course, all of this is for informative purposes only and does not replace professional advice from a tax accountant. Please seek the advice of a pro, who can help you identify the best way forward for your business.

And, next year, don’t leave it so late!