With tax time right around the corner, hipages co-founder and chief executive, Roby Sharon-Zipser shares his top tips for the tradies this end of the financial year.

Over the past financial year, we’ve seen demand for tradies on hipages skyrocket. From repairing flood-damaged homes to a rush on rainwater tanks through to kitchen renovations and chimney sweeping, tradespeople across the board have given 110% in 2022.

During high-demand periods, balancing time on the tools and keeping pace with the nuts and bolts of running their business can be a challenge for most. For those small business owners who struggle to keep on top of their admin, there’s another big job on the horizon, as tradespeople prepare to swap out the tools for a calculator.

With EOFY just around the corner, the good news is that the company tax rate for small businesses is at its lowest rate in 50 years. At just 25% for the 21-22 financial year, there’s a good chance many tradies are set to find themselves in a good place when it comes to reinvesting in and growing their business.

So, keeping in mind that the tax office has announced that it will be keeping a closer eye on work-related expenses this year, you don’t want to be cutting corners or rushing when it comes to filing your tax return.

To help out tradies running their businesses, I’ve pulled together my top tips to get the most out of any EOFY windfalls and work smarter (not harder!) this coming financial year.

Take the hassle out of tax time with online tools

If you spend a lot of time chasing unpaid invoices, managing your workflow and securing new customers, why not consider reinvesting your tax return in digital tools that streamline time-consuming tasks such as quoting, invoicing and job management?

Luckily, a raft of subsidies and incentives designed to make life easier for small businesses were announced earlier this year as part of the 2022-23 Budget. One of these incentives, the Technology Investment Boost, encourages investment in digital tech and online tools.

Under the Technology Investment Boost scheme, for every $100 invested in digital tech, small businesses will receive a $120 tax break across everything from accounting to subscription and cloud-based services, portable payment devices and cyber security systems.

Do your homework (or hire someone else to do it for you!)

Run off your feet? Consider hiring an accountant who specialises in trades and can reel off relevant deductions with ease. For the maximum value, ensure you have a water-tight process to keep track of all business-related expenses – as well as making a note of all key dates, deadlines and cut-offs. File away all invoices and receipts for items you’ve bought including protective clothing or PPE such as steel-capped boots, sunscreen, and masks; meals and accommodation if you’ve stayed overnight for a job; have dry-cleaning, laundry or home office expenses; any costs associated with work vehicles; and any new tools or equipment.

Upgrade your ute

The $150,000 Instant Asset Write-Off is a scheme allowing tradies with their own business to buy assets, such as new or second-hand work utes, and immediately claim them as tax deductions. It’s a great opportunity for businesses in need of new vehicles; to be eligible, assets need to be used by June 2023. Under the scheme, tradie businesses can buy a work ute worth up to $59,136 (before GST), and claim it back as a tax deduction. However, keep in mind that if your business makes a loss you won’t be able to claim the investment against your taxable income – although you may be able to retrospectively claim against pre-COVID profit, due to extended loss carry-back provisions.

Roby Sharon-Zipser

Invest in future tradies

Demand for trades is currently through the roof, and if we are going to have any chance of ensuring long-term industry sustainability, Australia is going to need more skilled tradespeople. At tax time, give your apprentices a leg up by ensuring they are across the programs and incentives that can make balancing work, life, and expenses easier while they learn. For example, Trade Support Loans (TSLs) can help to cover more than $20,000 in everyday costs during their apprenticeship, while the Living Away from Home Allowance (LAFHA) is also available to eligible apprentices during their first three years of training. If your apprentice received COVID-19 Disaster Payments, make sure they are aware that the ATO has reclassified these as a non-taxable payment, and they may be eligible for a refund on their 2020–21 return.

For apprentices with a disability, the government also provides additional support through assistance with tutorials, interpreters and mentor services.

Audit your marketing and ad spend

Tax time is the perfect time to assess your marketing and advertising spend. Question if you are getting a good return on investment. Many tradies fall into the trap of pouring cash into pay-per-click online advertising, which can be costly and time-consuming, often for limited results. If you are considering changing up your marketing approach, hipages generates direct leads that you can opt in to, and ultimately give you more control over where your dollars go.

Train and build your team

Invest in your staff to build your business. Another invaluable incentive to come out of the 2022-23 Budget is the Skills and Training Boost. Available up until June 30, 2024, for every $100 a small business spends on eligible external training courses and upskilling, they will get a $120 tax deduction. If you work in a priority trade, you may also be eligible for up to $15,000 for every apprentice you employ.

*Roby Sharon-Zipser is not a tax agent. The tips in this article are for general guidance only and should not be taken as financial product or tax advice. You should consider whether these tips are applicable to your business and obtain advice from an appropriately qualified professional.