Australian tradies are some of the hardest-working small business owners in the country, yet too many are still overpaying tax simply because they don’t know their numbers. The statistics are sobering: financial mismanagement causes 32% of small business failures, 75% of owners find the tax system confusing, and only 19% believe they’re any good at financial management. In my book Know Your Numbers, these exact issues are called out as Mistake #5: Tax planning failure — one of the top five financial mistakes sabotaging trades businesses.
Here are the deductions most trades businesses miss in the 2025–26 financial year — and how to claim them legally:
- Vehicle & travel expenses You’re constantly moving between sites, suppliers and clients. Use the 88 cents per kilometre method (up to 5,000 km) with a simple diary, or the full logbook method for larger claims. Either way, document every work-related trip.
- Home office or shed setup Whether it’s a dedicated shed for storing gear or a home office for quoting and admin, claim the ATO fixed-rate method (approx. 67–70 cents per hour) plus depreciation on furniture, shelving and fit-outs.
- Tools, equipment, safety gear & trade supplies Power tools, hand tools, machinery, ladders, scaffolding, safety gear, hi-vis clothing, gloves, respirators and trade-specific supplies are fully deductible. Most tools and equipment under $20,000 qualify for immediate write-off if your turnover is under $10 million.
- Depreciation & larger assets Anything above the instant write-off threshold can still be depreciated over its effective life.
- Work clothes, phone & internet Protective clothing and laundering costs are claimable. Apportion your phone and internet based on genuine business use (keep a simple diary).
Cash-flow master tip (straight from the BOOK):
My 5 bank account system ensures the “Tax” bank account has the money needed to ensures you never get caught short when an ATO debt is due — turning a potential cash crunch into a planned, positive cash-flow move.
The difference between surviving and thriving in 2026 often comes down to one decision: deciding to stop overpaying tax and start running your trades business like the professional operation it is.
Written by
Lyndon Russell FIPA
Director of Next Level Accountants
