Small business instant asset write-off
A Bill before Parliament will extend the $20,000 instant asset write-off for another year until 30 June 2026. The instant asset write-off is available to a small business (annual aggregated turnover under $10 million) that uses the simplified depreciation rules. This means that if your business qualifies for the instant asset write-off, it can deduct in the current income year (2025-26) the full cost of an eligible depreciating asset costing less than $20,000 if it is first used, or installed ready for use, before 1 July 2026. This also applies to additional expenditure under $20,000 (incurred before 1 July 2026) on an existing depreciating asset.
Other consequences of this measure are that the low value pool threshold is extended for a further 12 months until 30 June 2026, which means that if the value of the general small business pool (at the end of the 2025-26 income year) is less than $20,000, it can be written off in full, and the “lock-out” rule is suspended for a further 12 months until 30 June 2026. This rule prevents a small business that stops using the simplified depreciating rules from using those rules again for 5 years.
Tip! Talk to us at Stones Sharp if your business intends to acquire a depreciating asset or spend money on an existing asset.
Payday super
From 1 July 2026, employers will be required to pay their employees’ superannuation guarantee (SG) at the same time as their salary and wages. This is called “Payday super”. Legislation to implement the Payday super regime was recently introduced into Parliament.
The key reforms are that employers must pay SG at the same time as salary and wages, SG contributions will generally need to reach employees’ super funds within 7 business days, a new concept called “qualifying earnings” (QE) will be used to calculate both SG contributions and the SG charge, the deadline for super funds to allocate or return contributions that cannot be allocated will be reduced to 3 business days down from 20, ATO systems will be improved to include faster payments and new services such as the Member Verification Request to help reduce rejected contributions, the Small Business Superannuation Clearing House (SBSCH) will be closed to new registrants from 1 October 2025 and all users from 1 July 2026, and employers will need to report both QE and Super Liability via Single Touch Payroll (STP).
The ATO has published draft guidance on its compliance approach for employers for the first year of Payday super, recognising that employers who try to do the right thing from 1 July 2026 to 30 June 2027 and resolve any issues quickly should not be the focus of compliance action.
Tip! Talk to us at Stones Sharp as soon as possible about the Payday super reforms and how they will affect your business. 1 July 2026 isn’t that far away!
GST measures
A Bill before Parliament will make it easier to claim input tax credits (ITCs) that were inadvertently overlooked from an earlier tax period and implement other GST simplification measures. The Bill will allow a taxpayer to choose to attribute ITCs to the earlier correct tax period or to a later one, subject to the usual four-year limitation period. The shortfall interest charge (SIC) and the general interest charge (GIC) are no longer tax deductible if incurred on or after 1 July 2025.
Public register for unlisted companies
The Government will develop a public Commonwealth-operated register of beneficial ownership information for unlisted companies to improve awareness of who ultimately owns or controls a company. Detailed policy development will commence from early 2027 with public consultation expected.
Super reforms
The Government has amended its proposed Division 296 tax on earnings attributable to total super balances exceeding $3 million. The threshold will be indexed, unrealised gains will be excluded, an additional 10% tax will apply for balances over $10 million, and the start date has moved to 1 July 2026.
ATO compliance activities – Small business tax risks
The ATO is focusing on the property and construction industry and the professional, scientific and technical services sector. Common errors include incorrect R&D claims, omitting income, overclaiming expenses and GST credits, private expenses claimed as business, failing to register for GST, and not seeking independent advice.
Small business benchmarks
The ATO publishes benchmarks for 100 industries to help compare performance. These include cost of sales to turnover, total expenses to turnover, labour to turnover, rent to turnover and motor vehicle expenses to turnover. The ATO uses these benchmarks to identify potential tax risks.
Example: A supermarket operator with a cost of sales to turnover ratio of 88% was audited as this was outside the benchmark range of 71% to 77%. They were required to pay over $275,000 in tax and $44,000 in penalties.
Division 7A – Loans and other payments from your company
If a private company makes a payment or loan to a shareholder or forgives a debt, it may be treated as a deemed unfranked dividend. Division 7A can also apply to guarantees and certain trust arrangements.
There are exemptions including assessable distributions, private use of business dwellings, arm’s-length loans, loans meeting interest and term requirements, and loans to another company. The ATO may exercise discretion where honest mistakes or hardship exist.
Private use of work vehicles and FBT
Private use of work vehicles can attract FBT. Common mistakes include incorrectly treating private use as business use, assuming dual cab utes are exempt, and poor record keeping. Dual cab utes are only exempt where they are eligible vehicles and used only for limited private use.
Varying your PAYG instalments
PAYG instalments for 2025-26 have increased by the GDP adjustment factor of 4%. Instalments can be varied if they don’t reflect expected tax liability.
GST and vouchers
Face value vouchers are only subject to GST when redeemed. Non-face value vouchers are subject to GST when sold. GST credits are claimed when the voucher is redeemed or purchased depending on type.
Key tax dates
A table on page 15 lists key dates including 21 Nov 2025 for October BAS, 28 Nov 2025 for September SGC, 1 Dec 2025 for company tax payments, and further obligations through to March 2026.
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