Why some business owners pay too much tax and how to avoid it

As tax season approaches, many business owners ask the big question; Am I paying more tax than I should?

For many, the answer is yes. But here’s the truth: most business owners can reduce the amount of tax they pay. The strategies exist. The legislation supports it. The tools are available. So why doesn’t every business owner pay the least amount of tax legally possible?

It comes down to three simple – but powerful – factors:

1. Desire: how important is it to them to save tax?
   It might sound strange, but not every business owner is actively focused on reducing their tax bill. Some are too busy running their business. Others see tax as just a cost of doing business—something that happens to them rather than something they can influence.
   But those who want to minimise tax, who see tax planning as a strategic opportunity rather than a once-a-year obligation, are the ones who benefit most. Desire is the starting point.
   If a business owner isn’t actively looking to reduce tax, they’re likely overpaying.
2. Willingness to make changes: Tax-saving strategies often require change.
   Change to how a business is structured.
   Change to how income is split or profits are distributed.
   Change to how money is invested, borrowed, or drawn from the business.For example:
   Switching from a sole trader to a company or trust structure
   Refinancing high-interest loans to free up cash flow
   Restructuring ownership of assets
   Making early super contributions

   These changes aren’t always easy. They may involve legal, financial, or emotional decisions. And they take effort. That’s why willingness to act is the second critical factor. The best advice in the world won’t help if the client isn’t ready to implement it.

3. Capacity: Do They Have the Funds to Implement?
   Many tax strategies involve some upfront investment—either of money, time, or both.For example:
   To contribute to super, you need spare cash.
   To prepay expenses, you need to manage cash flow.
   To restructure, you may need legal and accounting support.

Even the most effective strategies won’t work if there’s no capacity to follow through. That’s why good tax planning is more than just a list of tactics—it’s a conversation about timing, resources, and what’s possible right now versus in the future.