When you own and operate your own business, it is vital that you stay up to date on the latest tax changes to remain compliant. These changes occur every year, with 2025 being no different as the latest business tax update has brought with it a range of changes. These changes are likely to impact how you manage tax, your cash flow, and your reporting obligations. In this guide, we’ll examine these changes and discuss their impact on your business.
If you’re searching for business tax planning services to assist your small to medium-sized business, reach out through our online form or give us a call on 07 3391 1188 to arrange a consultation.
Relevant Changes in the Latest Tax Update 2025
The tax update 2025 introduced several key changes that business owners should be aware of. These changes affect areas such as small business concessions, deductions, reporting obligations, and compliance expectations. While each business will be impacted differently, understanding these adjustments is crucial for forward planning and minimising risk.
Changes to the Instant Asset Write-Off
The Instant Asset Write-Off continues to support eligible businesses in 2025, but with important limitations. From 1 July 2025, the threshold will be set at $20,000 per asset for businesses with an aggregated turnover under $10 million. This means:
- Assets must cost less than $20,000 (excluding GST for GST-registered businesses).
- Assets over this threshold must be added to the small business depreciation pool.
This measure is in place until 30 June 2026, and businesses should consider the cut-off dates when planning asset purchases. The return to tighter thresholds may limit flexibility in claiming upfront deductions on high-value purchases.
ATO Payment Plan Interest Is No Longer Tax Deductible
As of 1 July 2025, the interest charged on ATO payment plans is no longer tax deductible. This applies to General Interest Charges (GIC) on overdue tax debts.
This means any interest you pay to the ATO is now treated as a full business cost, with no offset against your taxable income. For example, at the current ATO interest rate of 11.17% p.a., a $50,000 outstanding tax debt could attract more than $5,500 in interest each year, which is no longer claimable as a deduction.
If your business relies on ATO payment plans to manage cash flow, now is the time to reassess your approach. Reviewing your repayment structure and planning ahead for tax obligations can help reduce your interest exposure and improve financial outcomes.
Stricter GST Reporting for Non-Compliant Businesses
As per the latest business tax update, the ATO is increasing enforcement for businesses with poor GST compliance. Businesses with a history of late lodgements, missed payments, or inaccurate reporting may now be required to lodge Business Activity Statements (BAS) monthly instead of quarterly.
Being moved to monthly reporting increases the frequency of lodgements and can put additional pressure on your cash flow and admin processes. If your business has struggled to meet BAS obligations in the past, this change could soon apply to you.
To avoid being reassigned, it’s important to:
- Lodge all BAS on time
- Ensure GST figures are accurate
- Make payments by the due date
Ongoing non-compliance increases your risk of reassignment and may lead to further scrutiny by the ATO.
Small Business Energy Rebate Still Available
The Federal Government’s energy bill relief for small businesses remains in effect until 31 December 2025. Eligible businesses can receive up to $150 in electricity bill rebates, applied automatically through their energy provider.
To receive the rebate, your energy account must be correctly classified as a small business. If you’ve changed retailers, moved premises, or updated your business structure recently, it’s worth confirming your eligibility with your provider to ensure the rebate is applied.
Even modest cost reductions like this can contribute to better bottom-line outcomes when actively managed.
Need Help Understanding the Latest Business Tax Update?
At Taggart & Partners, we’re the business accountants you can rely on to grow your income, reduce your tax, and protect your best interests. We work with small to medium-sized businesses to find the perfect solution for growing and protecting your revenue. Give us a call on 07 3391 1188 or make an enquiry through our online form to start discussing your business accounting needs today.