As we begin the 2025–26 financial year, several important tax changes have come into effect that could impact your business’s cashflow, investment decisions, and compliance obligations.
At TAG Financial Services we specialise in helping business owners stay ahead across tax, superannuation, and financial planning.
Below is a quick summary of three key changes now in play, and what they mean for you.
1. ATO Interest Charges Are No Longer Tax Deductible
As of 1 July 2025, interest charged by the ATO on overdue tax debts, including the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) – can no longer be claimed as a tax deduction.
Why this matters:
- Businesses carrying tax debt will feel a greater financial impact.
- There’s no longer any tax relief for late payments or ATO interest.
- Payment plans and deferral strategies may need to be reassessed.
Our advice:
If you have tax debt or use ATO payment plans, it’s time to review your approach. We help business owners explore better strategies to reduce costs and stay ahead of tax obligations.
2. The $20,000 Instant Asset Write-Off Has Ended
The temporary $20,000 instant asset write-off for eligible small businesses expired on 30 June 2025. The threshold has now reverted to just $1,000, unless extended by future legislation.
What this means:
- Assets over $1,000 purchased from 1 July 2025 will generally need to be depreciated over time.
- Businesses may need to rethink the timing or structure of planned purchases.
- Cashflow modelling and tax forecasting should be updated accordingly.
Our advice:
Planning an equipment upgrade or business purchase? We can help you assess the timing, tax treatment, and funding options to maximise your deductions under the new rules.
3. ATO Compliance Activity Has Stepped Up
The ATO has increased its audit and enforcement activity for the 2025–26 year, with a strong focus on:
- Unpaid tax debts and late lodgements
- GST fraud and “black economy” behaviour
- Incorrect or inflated deductions
- Mismatches from data-sharing systems
The ATO is using more real-time data and automated alerts than ever, making it easier to flag irregularities – especially in small and medium-sized businesses.
Our advice:
If you aren’t already working with us, now is a smart time for a compliance check. Whether you just want a second opinion or proactive support, we can help you avoid unnecessary risk – and feel confident you’re on the front foot.
We’re Here to Help
Whether it’s staying compliant, investing wisely, or managing superannuation effectively, we’re here to help you navigate these changes with confidence.
Want expert guidance on how these changes affect your business?
Book a chat with our team – we’ll help you plan smart and act early. Contact team@tagfinancial.com.au.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2025. Please do not reproduce without the expressed written consent of the author.