Most business owners don’t lose money because tax law is complicated.
They lose it through simple, fixable mistakes that quietly compound over time.
Most of these errors aren’t technical — they’re behavioural. And poor habits beat good advice every time.
Here are seven of the most common tax mistakes we see in Australian SMEs, why they happen, and what you can do about them this week.
1. Mixing Personal and Business Money
When you use one bank account for everything, you create messy records and weak audit trails.
You lose deductions. You increase ATO scrutiny. And fixing it later is always harder than doing it properly from the start.
Why this happens:
Convenience wins early. Systems feel like “something to do later.”
The fix:
Open separate business bank accounts. Get separate cards.
If you cover business expenses personally, reimburse yourself properly — with documentation.
2. Treating GST Like Free Cash
GST collected is not your money. It belongs to the ATO.
Spending it creates instant cash-flow shocks when BAS time arrives.
Common errors include:
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Late BAS lodgements
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Under-reporting sales
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Over-claiming credits without valid tax invoices
The fix:
Set GST aside weekly into a separate account.
Reconcile monthly, not quarterly.
Never wait until deadline day to discover you’re short.
3. Paying Yourself the Wrong Way
Random drawings without structure trigger tax problems fast.
This often leads to Division 7A issues, unpaid PAYG, or both.
Red flags to watch:
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Your loan account is always overdrawn
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No formal repayment terms exist
The fix:
Pay yourself properly — salary, dividends, or a structured loan.
If a loan is used, formal agreements and repayment schedules are non-negotiable.
4. Missing Super Guarantee Obligations
Super isn’t optional — and late super is not deductible.
Penalties apply even when cash flow is tight.
What usually goes wrong:
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Contractors are actually employees under super law
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Super payments are delayed during cash flow stress
The fix:
Pay super on time every quarter. No exceptions.
Review contractor arrangements to ensure they’re genuinely independent.
5. Ignoring Record-Keeping Discipline
No records means no deductions.
And when the ATO audits without documentation, their assessments default against you.
Typical gaps include:
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Missing receipts
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No asset register
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No vehicle logbooks
The fix:
Implement digital record-keeping now.
Keep records for at least five years.
Photos are better than nothing — but accounting software beats photos every time.
6. Leaving Tax Planning Until June
Tax planning is not a June panic exercise.
Decisions made too late can’t be reversed or optimised.
The cost of leaving it late:
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Missed concessions and offsets
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Overpaid tax that can’t be recovered
The fix:
Plan quarterly.
Forecast early in the financial year.
Make strategic decisions while you still have time to implement them.
7. Relying on Social Media Tax Advice
Generic tax tips can be dangerous.
What worked for someone else’s structure may be completely wrong — or illegal — for yours.
High-risk areas include:
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Trust distributions
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Loss claims
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GST schemes
The fix:
Get advice tailored to your structure and circumstances.
Document the reasoning behind major tax decisions.
Social media is for awareness — not implementation.
The Real Problem Isn’t Technical
Most tax mistakes aren’t caused by a lack of knowledge.
They’re caused by inconsistent habits and weak systems.
The good news? Systems fix behaviour.
You don’t need to become a tax expert — you need processes that work even when you’re busy.
Your Action Plan for This Week (Not “When Things Slow Down”)
Stop reading and start doing:
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Open separate bank accounts if you haven’t already
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Review GST and super payment timing to ensure nothing is overdue
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Book a tax planning session before the next quarter begins
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Stop acting on generic tax content without professional verification
Tax mistakes are expensive — but they’re also preventable.
The businesses that get this right aren’t smarter.
They just have better systems.
Need help identifying tax risks in your business?
A structured tax risk review now can save you thousands in penalties, interest, and missed deductions — often before the ATO ever gets involved.