My EOFY tax f#$k up! | 77

EOFY is here, and I’m sharing a few hard-earned lessons from my own electrical business. From costly mistakes to smarter money moves – this one might just change how you handle tax time.

📈 Work directly with me 👉🏼  HERE

🚀 The Sparky Series: How to build your Flywheel™ in 9 minutes 👉🏼  HERE

📽️ More on Instagram 👉🏼  HERE

🎥 More on YouTube 👉🏼 HERE

Transcript

What do you mean that Lamborghini’s not a tax expense? I'm a Sparky, bro. Come at me. Welcome to Simplified Sparking Marketing.

This week’s podcast has nothing to do with marketing. If you’re after marketing advice, scroll back through the other 70-odd episodes. This one’s all about tax time—end of financial year—just over a week away from today (recorded June 22nd).

Let me share some mistakes I made around tax and EOFY. Hopefully, it’ll steer you clear of doing the same.

Let’s rewind to 2018. I thought I had some coin sitting in the business bank account, so I bought a brand new Renault Trafic van—outright. Transferred 45 grand straight to the dealer from the business account. Big mistake.

Later, when I got a second vehicle, I did it differently—I used a chattel mortgage, basically a business vehicle loan. Interest was low, about 4–5%, and I only paid about 4–5 grand over five years. That’s nothing, especially considering I kept my business cash in the bank and just chipped away at it monthly.

There are other options like leases—basically a Netflix subscription for vans. You keep paying, never own it, but you can swap into a newer one. Only makes sense if you’re turning over vehicles regularly. Chattel mortgage was the smarter move for me. You own it at the end and can sell it if you want.

So why did I even have 45K sitting in the business account in the first place? I wasn’t paying myself properly. I was paying myself like an apprentice—maybe $700–$800 a week. This is way too common among tradies. That’s why I had the cash there.

If I had financed the van and paid myself properly, that 45K could’ve been used to pay tax and super, and I’d have cleared maybe 25–30K in my personal account. Real reward for hard graft. Instead, I dumped it all into the van upfront. Not wise.

Another thing—if you’re paying yourself peanuts and want to apply for a home loan, good luck. Banks lend based on what you pay yourself, not what’s in the business. So if you’re pulling 700 a week, they’re not giving you much. That’s why it’s crucial to get your wage right.

I spoke to my accountant this week. If you haven’t got a good one—get one. Not someone who just ticks boxes, but one who knows tradies and gives proper advice.

We went through both business books. This year, we’d already hit my ideal wage threshold, so anything extra would be taxed at 50%. So instead of paying myself more, I bought a few things I actually needed—like a new iPhone.

Don’t go splashing on tools you don’t need just to dodge tax. That $10K Fluke reader gathering dust in the shed? You’d be better off paying tax and keeping 7K.

One tip—ask your accountant about paying yourself rent. If you’ve got a home office or store gear in your garage, you might be entitled to take rent from the business—say, $350 a week—paid into your personal account. Just offset that by reducing your wage the same amount. Tax-free shift. Again—check with your accountant, I’m not giving financial advice.

That’s my two cents on EOFY. Hopefully, something here helps you avoid the same stuff-ups. Links below for the mentorship and free resources—go have a look. Catch you next time.