Spring 2025

Tax update September 2025

What’s changing?

While sweeping tax reforms aren’t expected this year, several targeted changes could affect your bottom line.

Tax debt no longer deductible

The ATO is reminding taxpayers the general interest charge (GIC) applied on an unpaid amount of tax or other liabilities after the due date is no longer tax deductible.ⁱ

The current rate applied to GIC debts is 11.17 per cent, with the interest charge compounding daily.

Prior to 1 July 2025, GIC could be claimed as a deduction in your tax return, but with the deduction no longer available, small businesses carrying any tax debts will now pay more.

Back pay reporting change

From the start of the 2025-26 tax year, the way that back payments to employees are treated and reported has changed.ⁱⁱ

In previous tax years, back payments accrued more than 12 months prior and exceeding $1,200 were reported at Lump Sum E in Single Touch Payroll (STP) reports.

The $1,200 threshold has now been removed, so all back payments accrued more than 12 months ago must be reported regardless of the amount.

Small Business Clearing House to close

The ATO’s Small Business Clearing House (SBCH) will shut down ahead of the new Payday Super regime launching 1 July 2026.ⁱⁱⁱ

Small businesses with 19 or fewer employees could use the SBCH to pay their quarterly super contributions to the super funds selected by eligible employees.

The ATO says it will provide information to small businesses about transitioning to alternative super payment services, but businesses are being encouraged to take steps towards changing their payment arrangements before 1 July 2026.

Support for new small businesses

The ATO is providing extra support for new small business owners to help them understand and comply with their tax, super and registry obligations.

With around 50 per cent of businesses failing in their first three years, the new Ready for Business Program is designed to help owners get their ATO obligations correct from the start.

ABN holders will receive a series of emails with tips on their ABN obligations, business structure, registering for GST and employer responsibilities.

Focus on GST compliance

The ATO is also encouraging small businesses to set aside their GST payments in a separate bank account to avoid being caught out when it comes time to pay their obligations.^iv

Compliance with GST registration and payment obligations remain an ongoing concern for the regulator, with the current annual tax gap estimated to be around $8 billion.

GST registration is compulsory when turnover exceeds $75,000 or if a business provides taxi, limousine or ride-sourcing services.

Notifying SMSF changes

SMSF trustees are being urged to ensure they notify the ATO whenever modifications are made to their SMSF.

Changes related to the fund’s contact details, structure, status or bank account must all be submitted to the regulator within 28 days.

Once the ATO receives the change details, the regulator will send an alert vis SMS or email to safeguard the SMSF against potential fraud or misconduct.

Work-related deductions continue to grow

Release of the annual Taxation Statistics Report for 2022-23 shows work-related expenses continue to dominate the tax deductions claimed by individuals, ensuring the ATO will maintain its current focus on this area.

Work-related expenses accounted for 50 per cent of individual deduction claims, with 10.3 million Australian taxpayers claiming an average of $2,739 per person in 2022-23.

Need help navigating the changes?

If any of these updates affect your business or personal tax situation, please contact us for help to understand your obligations, adjust your reporting processes and to plan ahead.

i ATO reminder on interest deductibility changes from 1 July | Australian Taxation Office

ii The way you treat and report back payments is changing | Australian Taxation Office

iii Small Business Superannuation Clearing House | Australian Taxation Office

iv ATO announces additional support for new small business owners | Australian Taxation Office

Preparing for another savings pinch

The bad news for savers relying on income returns is set to continue

Australia’s underlying level of inflation is continuing to fall, and which paved the way for another official interest rate cut when the Reserve Bank of Australia (RBA) board met earlier in the month.

It was welcome news for borrowers, but not for most savers – especially the millions of Australians with money tied up in savings accounts who are heavily dependent on regular account interest payments.

When borrowing interest rates are reduced, account savings interest rates typically fall in tandem.

In fact, many financial institutions who had been pre-empting another rate cut and had already quietly started to reduce their account savings rates.

According to rates comparison website Canstar, only a handful of banks are now offering savings rates above 5%. And, in the majority of cases, receiving those rates are conditional on meeting minimum monthly deposit amounts or transaction numbers.

Just like the rates on savings accounts, term deposit rates have also been declining steadily over time, since well before the RBA lowered its official interest rate by 0.25% to 4.10% in February this year – its first rate cut since November 2020.

In fact, RBA retail deposits and investment rates data shows term deposit rates across a range of durations have been steadily declining since July 2024.

For example, the average 12-month term deposit rate for a $10,000 amount has been progressively reduced nine times since July 2024, from a peak of 4.50% to an average rate of 3.70% at June 30, 2025.

The average three-year term deposit rate for a $10,000 amount has been progressively reduced six times over the same period, from a peak of 3.95% in July 2024 to 3.05% at June 30, 2025.

The chart below tracks the average 12-month term deposit rate for $10,000 amounts between January 1995 and July 2025, highlighting the rise in account interest rates from their historical low point in early 2022 to their peak, and then their gradual decline since the middle of 2024.

Going down: Average term deposit rates have slipped

Banks’ Term Deposit Rates ($10,000) – 1 Year (Jan 2015 to Jun 2015)

Source: Reserve Bank of Australia.

Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance.

Implications for savers and retirees

Many Australians, especially retirees, rely on the interest earned on their savings to cover their living expenses, and any reduction in interest rates can mean a substantial decrease in their income.

This has been the reality for many people over the course of the last year, and further cuts are on the near-term horizon.

The decline in savings rates also has broader implications for the economy.

When savers earn less interest on their deposits, they have less money to spend, which can lead to a decrease in consumer spending. This, in turn, can slow economic growth, as consumer spending is a key driver of economic activity.

Additionally, lower savings rates can discourage people from saving, which can have long-term implications for financial stability.

Turning savers into investors

New research released has estimated that the implementation of certain retail investment reforms in Australia could potentially unlock at least $185 billion in excess cash savings and help more Australians achieve greater financial security.

These reforms include facilitating access to affordable financial advice, introducing tax incentives to boost investment outside of superannuation, improving financial literacy levels, and increasing fee transparency and competition.

For retail investors, the decline in term deposit rates and savings rates presents a challenge. With returns on traditional savings accounts and term deposits declining, some investors may need to look for alternative investment options to generate income.

While there are other income-generating options available, such as dividend-paying stocks and bonds that typically offer higher interest rates than savings accounts and term deposits, it is important for investors to carefully consider the risks and rewards of these investments before making any decisions.

In the meantime, the income road ahead for many people needing to generate income from their savings may become increasingly challenging as interest rates continue to fall.

Source: href=”https://www.vanguard.com.au/personal/learn/smart-investing/investing-strategy/preparing-for-another-savings-pinch”>Vanguard August 2025
This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™

GENERAL ADVICE WARNING
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) is the product issuer and operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee and product issuer of Vanguard Super (ABN 27 923 449 966).
The Trustee has contracted with VIA to provide some services for Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc (collectively, “Vanguard”).
We have not taken your or your clients’ objectives, financial situation or needs into account when preparing our website content so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for the product before making any investment decision. Before you make any financial decision regarding the product, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained on our website free of charge, which includes a description of who the financial product is appropriate for. You should refer to the TMD of the product before making any investment decisions. You can access our Investor Directed Portfolio Service (IDPS) Guide, Product Disclosure Statements (PDS), Prospectus and TMD at vanguard.com.au and Vanguard Super SaveSmart and TMD at vanguard.com.au/super or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This website was prepared in good faith and we accept no liability for any errors or omissions.
Important Legal Notice – Offer not to persons outside Australia
The PDS, IDPS Guide or Prospectus does not constitute an offer or invitation in any jurisdiction other than in Australia. Applications from outside Australia will not be accepted. For the avoidance of doubt, these products are not intended to be sold to US Persons as defined under Regulation S of the US federal securities laws.
© 2025 Vanguard Investments Australia Ltd. All rights reserved.

Succession planning that honours the business you built

For many small business owners, the company they’ve built is more than a livelihood, it’s a legacy. Building a successful business takes years of hard work and dedication and when you’re ready to retire or move on to the next chapter of your life, the path isn’t always clear. That’s where succession planning comes in.

Whether your children have chosen different careers or there’s no obvious successor in sight, succession planning can be one of the most emotionally and financially complex aspects of running a business.

Recent Australian research shows that most small businesses won’t be passed on to the next generation. In fact, nearly half of SME owners expect that when they retire it will result in the closure of the business or selling to someone outside the family.ⁱ

Only 39 per cent anticipate a family member taking over, and just one-third have a documented succession plan in place.

Without a clear plan, many business owners find themselves working well past the traditional retirement age. The reasons vary from lack of interest from family, uncertainty about valuation or simply not knowing where to start and the consequences can be significant.

Who will take over your business?

Succession planning isn’t just about protecting financial outcomes; it’s also about preserving relationships. When expectations are unclear or decisions are made under pressure, family dynamics can suffer. Open conversations, guided by a shared vision and professional advice, can help avoid misunderstandings and make sure that everyone feels heard. Even if the next generation isn’t stepping in, a thoughtful plan can honour your legacy and reduce stress for those around you.

A plan also helps the business operate without disruption during change, which is vital for employees, customers, and stakeholders alike.

Start early for a smoother exit

The key to a successful business exit is planning early.

A well-considered succession plan allows you to decide how and when you leave your business, rather than being forced to react to circumstances.

A federal government succession planning template is a helpful starting point, but it’s just one piece of the puzzle.

Planning ahead also helps avoid complications with the Australian Taxation Office. Transferring control or assets within a family business can trigger tax consequences, especially if the structure isn’t reviewed in advance.

A strong succession plan should cover:

• whether you’ll retain any ownership or involvement post-transition
• how the successor will fund the purchase (if applicable)
• contingencies for unplanned events like illness or sudden death
• tax implications of asset transfers, CGT, GST, and restructuring
• a current business valuation and regular reviews
• legal documentation and buy-sell agreements

If your business involves trusts, shareholder loans, or complex structures, it’s particularly important to seek professional advice. The ATO is actively reviewing transactions involving family wealth transfers, internal restructures, and use of concessions so clarity and compliance are key. Transactions of interest include assets being moved around within a private group; family member interests being restructured; accessing of concessions, exemptions and rollovers; settlement of shareholder/associate loans (Division 7A loans); and transfer of wealth through trusts.ⁱⁱ

Get good advice

Succession planning isn’t just about paperwork. Whether you’re preparing your business for sale, transferring ownership to a family member, or simply exploring your options, professional advice can make all the difference.

We can help you to:

• choose the right tax structure
• understand the implications of buy-sell agreements
• maximise available CGT concessions
• prepare your business for valuation and sale

If you’d like to start the conversation or review your existing plan, please contact our office. The earlier you begin, the more choices you’ll have and the more confident you’ll feel about your next chapter of your business.

i Planning for life after business | Business Research and Insights

ii Areas of focus 2024–25 | Australian Taxation Office

Unlock more time in the day with AI

AI is everywhere these days, and honestly, it can feel a bit overwhelming. There’s a flood of apps, tools, and buzzwords available. With so many options, it’s hard to know where to start or even if it’s worth your time investigating. But here’s the good news; when used thoughtfully, AI can be a total game changer, saving you precious hours every week.

In fact, while it needs to be acknowledged this is a rapidly changing space, reports from early 2025 indicate that workers using AI tools frequently save 2-4+ hours per week.ⁱ

The trick isn’t trying to jump on every new AI bandwagon – it’s about finding the right tools that help you streamline the tasks that eat up your day. The first step – get clear on what’s taking up your time.

Make a list

Take a moment and note down the things you spend the most time doing. Is it answering emails? Scheduling meetings? Creating social media posts? Organising files? Handling customer questions?

This simple exercise is powerful because it shifts your focus from feeling overwhelmed by all the noise in your day, to pinpointing where you need help. This focused approach means you’re solving a real problem, not just chasing shiny new tech.

Looking for AI tools

Once you’ve identified areas that need to be streamlined, pick one or two of the most time-consuming tasks and explore an AI tool that can assist. Start small and consider the bigger picture as well.

When evaluating solutions, make sure you are clear about what you want the tool to do. For example, if managing your inbox is a struggle, success might be ‘cutting daily email triage time in half’. Clear goals help you evaluate tools more objectively.

Choose AI tools that integrate with the apps and platforms you already use and are easy to implement. This reduces set up time and helps you automate more seamlessly.

Check reviews, watch quick demo videos, and look at whether the tool offers good customer support or tutorials. Some AI tools come with built-in onboarding, tutorials, or AI assistants that guide you as you learn. These features can dramatically cut the time it takes to get comfortable. Many AI tools offer free trials or limited free plans. Use this to your advantage to experiment, test features, and see if it fits naturally into your workflow.

Let’s look at some ways AI can lighten your load:

Email management

If your inbox feels like a never-ending stream of messages, apps like Superhuman and SaneBox use AI to sort your emails, highlight what’s urgent and snooze less important stuff for later. They learn your habits over time, making your inbox easier to manage and reducing the time you’d normally spend dealing with emails.

Scheduling made easy

Back-and-forth emails trying to find a meeting time? Tools like Calendly or x.ai handle all that automatically. They connect to your calendar and let others pick a time that works for you – no more awkward email chains or missed appointments.

Content creation helpers

Stuck staring at a blank screen not knowing where to begin? AI writing assistants like ChatGPT or Jasper can help brainstorm ideas, draft emails, or even social media posts. They don’t replace you, but it speeds up the writing process, so you can spend less time typing and more time creating.

Customer support assistants

If you receive repetitive questions from customers, AI chatbots such as Drift or Intercom can answer those instantly. This frees you up from constant interruptions while ensuring customers get quick responses.

Task automation

Platforms like Zapier or Make connect the apps you already use and automate repetitive tasks – like saving email attachments directly to your cloud storage or adding new contacts to your CRM.

Getting started

Don’t try to do everything at once. Give yourself time to get comfortable, test things out, and adjust as you go. As you begin to see how these tools save you small amounts of time here and there, you’ll find your days feeling less rushed and more productive. Over time, those small pockets of saved time add up into extra hours to focus on being more effective in your role or simply just enjoying more breathing room.

AI isn’t about replacing you – it’s about helping you do more of what matters by taking the busywork off your plate. The future of productivity is here to help you reclaim your most valuable resource: your time.

i https://kanerika.com/blogs/10-authentic-generative-ai-stats/

How to stay scam safe

Take a sec to check

Scammers aim to take advantage of weak security and plan on you being distracted with everyday life.

To keep yourself safe:

• Stop – Don’t share your personal information such as your myGov sign in details, Tax File Number (TFN), or bank account details, with anyone unless you trust the person and they genuinely require your details.
• Check – Take a sec to check. Ask yourself could the message or call be fake? Is it really the ATO contacting you?
• Protect – Act quickly if something feels wrong or you’ve noticed suspicious activity on your ATO accounts.

Always be aware of what information you share. If a scammer gets your personal information they can use it to access your bank account, sign in to your myGov account, or steal money and commit fraud in your name.

If an interaction doesn’t feel right, don’t engage. You should either:

• go to Verify or report a scam
• check our latest Scam alerts
• or phone the ATO on 1800 008 540 to check.

If you are the victim of a data breach and your personal information has been accessed, go to Data breach guidance for individuals.

Your personal information

To commit identity crime or fraud, scammers only need some of your personal information. This may include:

• full name
• date of birth
• current address
• myGov and ATO online login details
• TFN
• passwords
• bank account numbers
• credit card details
• driver’s licence details
• passport details.

They can use this information in a variety of ways, such as to commit refund fraud in your name, access your myGov account to steal your tax refund, steal your superannuation or sell your identity to organised crime groups on the dark web or via other means.

If you suspect your personal information, such as your TFN, has been stolen, misused or compromised, phone the ATO as soon as possible on 1800 467 033 between 8:00 am and 6:00 pm Monday to Friday. They will investigate and can place extra protection on your ATO account.

Consequences of identity theft

If your identity is stolen the consequences can extend far beyond immediate financial loss (such as your super being cleaned out or refund fraud committed in your name) and lead to significant personal and professional challenges. Such as:

• impact to your credit rating, making it difficult to be approved for a loan or credit card
• making it difficult for you to prove who you are and get new identity documents
• damage to your reputation, potential for access to your social media accounts and spreading misinformation in your name
• it can also take victims of identity theft years to recover their identity and undo any damage

The emotional toll is also significant. Victims of identity theft often experience stress, anxiety and a sense of vulnerability knowing that someone else is capable of exploiting their personal information at any moment.

Protect yourself

Here are some top tips to keep your personal information safe:

1. Don’t give out your personal information to anyone unless you trust the person and they genuinely require your details.
2. We never send unsolicited emails or SMS with QR codes or links to an online portal. Scammers often use these methods to steal your personal information or plant malware on your devices. If you receive a notification asking you do this, it is a scam.
3. Always access online services by directly typing the URL into a browser, not by clicking on a link.
4. Protect your TFN – only give your TFN to organisations or people who have a legitimate need for it, such as your tax agent, current employer or bank. It’s important to verify that the person you’re giving your TFN to is who they say they are.
5. Never share your passwords. Consider using passphrases instead of passwords, a password manager can help you generate or store passphrases. You should also consider updating them regularly.
6. Enable multifactor authentication. If scammers obtain your password, it will be significantly harder for them to access your account.
7. Keep your devices up to date. Scammers can use viruses, malware and programs to access or steal your personal information on your devices including phones, computers and tablets.
8. Use your Digital ID (such as myID), set to the strongest level you can achieve, to access ATO online services through myGov.

To learn more about myID visit How to set up myID.

For top cyber security tips, visit Top cyber security tips for individuals. You can also set up Voice authentication to help protect your tax account and reduce the chance of scammers accessing it.

More information on securing your devices is available from the Australian Cyber Security Centre.

How the ATO keeps your information safe

They take the security and privacy of your personal information very seriously and have steps in place to make sure your data and online transactions are secure and safe.

They keep your personal information safe by:

• confirming your details when you contact them
• having a range of systems and controls in place to make sure your data and transactions are secure
• logging access to your personal information (to help the ATO identify any unusual behaviour).

To help you stay safe online, they:

• won’t ask you for your TFN or bank details via return email, SMS, or on social media
• won’t give your personal information to anyone without your consent, unless the law permits
• won’t communicate with you on behalf of another government agency or ask another government agency to represent them.

How they communicate with you

They may use SMS or email to ask you to contact them, but they will never send an unsolicited message with a link asking you to return personal information or log in to their online services.

The ATO has a Facebook, Instagram, X and LinkedIn account, but will never use these platforms to ask you to provide personal information, documentation or ask you to make payments.

Source: ato.gov.au May 2025
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/newsroom/smallbusiness/ .
Important: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Liability limited by a scheme approved under Professional Standards Legislation.

Arthur Kyriacou & Co. is a CPA Practice.

ALK Wealth Pty Ltd ABN 81 604 051 943 is a Corporate Authorised Representative (Number 1268949) of Professional Investment Services Pty Ltd ABN 11 074 608 558 AFS Licence No. 234951. Loucas Kyriacou is a Sub Authorised Representative (Number 1268950) of ALK Wealth Pty Ltd.

ALK Finance Pty Ltd ABN 79 604 051 934 is a Credit Representative (Number 539496) of Centrepoint Alliance Lending Pty Ltd ABN 40 100 947 804 Licence No. 377711.

Copyright © 2025 ALK Financial Group Pty Ltd, All rights reserved.

DISCLAIMER:
This information is provided for educational purposes. It does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. While all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither ALK Financial Group, Arthur Kyriacou & Co., ALK Wealth Pty Ltd, ALK Finance Pty Ltd, ALK Property Trust nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.