Winter 2025

Tax update June 2025

ATO individual and business priorities

The Australian Tax Office will be cracking down on work-related expenses in personal tax returns this year after recently revealing some of the claims that have been submitted in the past.

The ATO is also reminding businesses of this year’s limit for the popular instant asset write-off and its ongoing focus on GST fraud.

Here’s a roundup of the latest tax news.

‘Wild’ deduction claims

The tax office caused some raised eyebrows with its revelations about ‘wild’ work-related expense claims made by some taxpayers, including a mechanic claiming an air fryer, TV, gaming console and microwave.ⁱ

Other claims deemed to be personal rather than work-related included a truck driver claiming swimwear so he could go for a swim when stopped for a break, and a fashion industry manager claiming over $10,000 in luxury-branded clothing that was purchased to wear to work functions.

This time the ATO says it intends to focus on common taxpayer errors, such as work-related expenses, working from home deductions, and income from multiple sources (including side hustles like ride sourcing services or selling services via an app).

Instant asset write-off limit

The ATO is reminding taxpayers who purchased business assets during the financial year that the instant asset write-off limit in 2024-25 is $20,000.ⁱⁱ

The instant write-off (which allows you to immediately deduct the business part of the cost of eligible assets) is available to businesses with an aggregate annual turnover of less than $10 million who use the simplified depreciation rules.ⁱⁱⁱ

The full cost of eligible depreciating assets (both new and second-hand) costing less than $20,000 on a per asset basis, may qualify for the deduction.

Focus on business GST fraud continues

A Melbourne man has been sentenced to 2 years and 11 months’ imprisonment after obtaining over $390,000 in fraudulent GST refunds and attempting to obtain a further $330,000.

The sentence reflects the continued ATO focus on stamping out GST fraud, with the acting deputy commissioner Kath Anderson noting there were “no ifs, ands or buts here – if you don’t run a business, you don’t need an ABN and you cannot claim GST refunds”.

The ATO-led Serious Financial Crime Taskforce remains on the lookout for potentially fraudulent GST activities, with information sharing identifying businesses using complex financial arrangements (such as false invoicing, misaligned GST accounting methods and claims for fake purchases) to obtain larger GST refunds.

New small business benchmarks released

Small business owners keen to take the ‘pulse’ of their business can now use updated financial benchmarks covering 100 different industries produced by the ATO.

Updated annually, the benchmarks are designed to help business owners compare their performance against other businesses in the same industry.

Owners can use the information to identify if their performance is within the normal range for their industry, which mean it is less likely to attract ATO attention.^iv

Paperless SMSF reporting

The ATO has emailed trustees of SMSFs still completing and lodging paper activity statements encouraging them to move to paperless reporting for improved security and convenience.

The regulator says benefits of paperless reporting include an additional two weeks on the fund’s lodgment deadline, reduced errors, faster refunds and easier recordkeeping.

In line with the push for greater digital SMSF reporting, the ATO recently noted non-lodgment of SMSF annual returns remains a concern and this can result in trustee penalties and removal of a fund’s compliance status.^v

Estimates of illegal early access in SMSFs is also worrying the regulator, with prohibited loans from funds increasing.

Help with compromised TFNs

With identity theft continuing to increase, the ATO has updated its information for taxpayers who find their tax file number (TFN) has been compromised.

TFNs can be comprised through a number of different channels like email or phishing scams, or through data breaches at legitimate organisations as well as ID theft by criminals.

Anyone who believes their TFN has been compromised or used illegally should contact the ATO immediately on 1800 467 033.

i ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office

ii Instant asset write-off for eligible businesses | Australian Taxation Office

iii Simpler depreciation rules for small business | Australian Taxation Office

iv ATO releases new small business benchmarks for 100 industries | Australian Taxation Office

v Highlights from the 2025 SMSFA conference | Australian Taxation Office

Get prepared to make tax-time easier

There are always lots of tax-related tasks to complete every EOFY, but as we move into the upcoming financial year, it is also worth getting to grips with new tax changes the Government’s election promises will usher in on 1 July, which we’ve outlined below.

New 2025-2026 tax changes

During the election campaign, the Labor government announced a number of tax changes.

These include the introduction of a standard $1,000 deduction for work-related expenses for taxpayers with labour income, a 20 per cent reduction in HECS-HELPS debts, and an extension of the $20,000 instant asset write-off until 30 June 2026.

Legislation has already been passed to cut the tax rate for individuals and is effective from 1 July 2026. The rate for income between $18,201 and $45,000 will be reduced from 16 per cent to 15 per cent, with a further reduction to 14 per cent in the following financial year.ⁱ

The government has also made it clear it intends to proceed with its draft legislation (Division 296) reducing the tax concessions for super accounts with a balance exceeding $3 million. This legislation will double the tax rate on earnings related to the portion of the balance over $3 million from 15 per cent to 30 per cent.

Now, let’s look at a few ways you can get prepared in the lead up to 30 June.

Start your tax preparations now

The ATO has announced its tax time hitlist, so it’s also important to check your current tax arrangements are not going to leave you vulnerable to an audit or significant penalties. The main focus for the ATO this year is work-related expense claims, investment properties and holiday home claims, and sharing economy income and cryptocurrency.ⁱ

With the ATO taking a much tougher stance on both tax reporting and payments, make sure you lodge and pay on time, or you could face penalties and interest charges. From 1 July 2025, interest paid to the ATO will no longer be tax-deductible.

Tips for businesses

Review and update all of your financial records and identify expenses that could be deductible.

You may want to make some deductible purchases prior to EOFY to help reduce your taxable income for the financial year. The small business instant asset write-off limit for 2024-25 is $20,000.ⁱⁱ

Also check your debtors, inventory and fixed assets, and ensure you write-off any debts that are not recoverable. Review any capital gains and losses and consider offsetting the gains with capital losses.

Check all required super contributions for employees have been made, plus any additional contributions for business owners. Ensure these contributions are received by the funds specified cut-off date to qualify for any tax deduction.ⁱⁱⁱ

To-do list for personal tax

Getting your personal tax information prepared is also important, particularly given the ATO’s focus on personal deduction claims.

If you have regular deductible expenses (such as interest on investment loans and annual payments), consider prepaying them before 30 June so you can claim a deduction this financial year.

If you are likely to have personal capital gains tax obligations from the sale of assets, consider whether you should try to offset them against capital losses.

Time for some super contributions

Consider making extra personal super contributions before the financial year ends if you can.

Before making any contributions, check the total amount of both your concessional (before-tax) and non-concessional (after-tax) contributions across all your super accounts to ensure you do not exceed the annual cap limits.^iv

Other super contributions to consider include personal tax-deductible contributions, contributions on behalf of your spouse and eligible contributions that could earn you a co-contribution from the government.^v

If you would like to discuss EOFY preparations for either your personal tax or business, please call our office today.

i ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office

ii Instant asset write-off for eligible businesses | Australian Taxation Office

iii Missed and late super guarantee payments | Australian Taxation Office

iv, v Caps, limits and tax on super contributions | Australian Taxation Office

How an effective tech stack can transform your business

Running a small business is no small feat. You’re often the manager, the marketer, the customer support team, the bookkeeper, and the IT department – sometimes all before lunch. That’s why technology, when used well, can be one of your biggest allies. It’s not about having more tools; it’s about having the right tools that help your business flow more efficiently.

The key is building a connected tech stack – a set of digital tools that work together, not against each other.

What is a “tech stack”?

At its core, a “tech stack” is the collection of digital tools and software you use to run your business. This could include how you manage your finances, how you stay in touch and stay connected with customers, how you track your sales or manage projects, and how your team communicates.

The important thing to know is that your tech stack isn’t just a bunch of individual apps or programs. Ideally, it should be an ecosystem – a group of tools that are connected or compatible, sharing information and streamlining your work for a more efficient way to run your business. When everything works cohesively, tasks get done faster, with fewer errors and less stress on you and your team.

Why having a software ecosystem matters

If your systems or software aren’t integrated, you’ll know the feeling: having to copy and paste customer information from one program to another, manually generate reports, or bounce between platforms just to see how sales are tracking; it’s exhausting, time-consuming, and there is more chance of human error.

But when your tools are linked – either through direct integration or simple workflows – they can:

• Automatically update records across different systems
• Trigger actions (like follow-up emails) without you lifting a finger
• Give you a clearer, more up-to-date view of your business

This kind of automation isn’t just about convenience – it can free up more hours each week, reduce errors, and help you scale up without adding a ton of manual administration.

Tips for building your tech stack

If you’re starting from scratch – or if your current setup feels a bit tangled – here’s how to build a tech stack that actually works for you:

1. Focus on your workflow

Start with how your business runs day-to-day. What are the core tasks you do regularly? Where are the pain points? Where do things fall through the cracks?

Your tech stack should be built around these needs, not the other way around.

2. Prioritise connectivity

Look for software that can share data, trigger actions, or sync up in some way. Even if you’re not using those features immediately, it’s helpful to know they’re available and maybe useful down the track.

Many platforms today are built with this kind of connectivity in mind, so take advantage of that. It doesn’t need to be complex – even simple integration between tools can save a ton of time.

3. Start small, then build

You don’t need to go all-in at once. Implement software that solves your biggest pain points first. Once this is running smoothly, you can layer in more over time and build out your tech stack as needed.

4. Avoid “tool creep”

It’s easy to end up with a bunch of apps – one for this, one for that – but too many tools can lead to confusion, extra costs, and more work instead of less. If you are using various types of software, ensure they can ‘speak to each other’ if need be, to keep things as simple and streamlined as possible.

5. Revisit and refine

Your tech stack isn’t a one-and-done decision. As your business grows or shifts direction, your needs will change. New tools pop up all the time, and remember, the ones you already use may be adding new features or making regular improvements.

Revisit your tech stack regularly and don’t be afraid to swap out tools that are no longer pulling their weight.

You don’t need to be a tech expert to build a good tech stack. You just need to be clear on what your business needs, and a little intentional about the software you use. An integrated tech ecosystem is like a team that actually communicates – everyone knows what’s going on, nothing falls through the cracks, and things just…work better.

At the end of the day, the goal is simple: spend less time on repetitive or time-consuming tasks, reduce mistakes, and have more space to focus on what really matters – growing your business and servicing your customers.

The superannuation changes from 1 July

The super changes coming into effect in the 2025-26 financial year

Australian superannuation laws are set to change once again in the 2025-26 financial year as the nation’s fast-growing retirement savings system continues to evolve.

Below is a summary of the changes that will come into effect from 1 July, 2025, as well as looming legislative changes.

Increased super guarantee (SG)

Millions of working Australians will receive a welcome superannuation boost from the start of July when the mandatory superannuation guarantee (SG) rate rises by 0.5% to 12%.

The SG is the percentage of your ordinary time earnings (in addition to wages) that is paid into your super fund account by your employer.

The 2025-26 rise marks the end of a series of five 0.5% SG rate increases since the start of the 2021-22 financial year, when the SG rate was lifted from 9.5% to 10%.

Higher transfer balance cap

Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal transfer balance cap (TBC) of $2 million, which will be increased by $100,000 from the current level of $1.9 million.

The TBC is the maximum amount that an individual can transfer from their superannuation accumulation account into a tax-free pension account on their retirement. Any amount over the TBC must be retained in an accumulation account, where any contributions and investment earnings are still taxed at 15%.

Keep in mind that investment earnings within the pension account can increase the account balance above the $2 million transfer balance cap without any penalty.

Carry-forward concessional contributions

Eligible workers can “carry forward” any of their unused annual concessional super contribution cap amounts from up to five financial years ago and add them to their concessional contribution cap in the current financial year.

That means it may be possible to contribute more than the current $30,000 concessionally taxed limit, subject to you having a total super balance of less than $500,000 at 30 June of the previous financial year and you having unused concessional contributions cap amounts available.

From 1 July the starting financial year for carry forward amounts will roll over to 2020-21. As such, the deadline for taking advantage of any unused entitlements you may have from the 2019-20 financial year will end on 30 June.

Proposed higher taxes on $3 million-plus super balances

Following its recent re-election, the federal government is likely to reintroduce its Division 296 tax bill to be passed as legislation.

The proposed Division 296 legislation would introduce an additional 15% tax on the earnings of super funds with balances above $3 million (which would apply to earnings on any amounts over $3 million). This would include any unrealised gains on assets held inside a super fund, such as shares and property, even if they had not been sold.

^{Important information and general advice warning}

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The 1% rule – tiny changes add up to a BIG difference

Personal transformation can be challenging. We all have habits we’d like to break and behaviours we’d like to do more of. But when we do some self-examination and think about what is involved in navigating change, it can seem overwhelming to get to where we need to be, whether that is personally or professionally.

That’s where small incremental change can be a powerful tool.

The power of one per cent

Just a tiny shift of something like one per cent, does add up. A compelling example of the power of one per cent incremental change is the story about Sir David Brailsford and the British Cycling Team. The team hadn’t produced a rider able to win the Tour De France in its entire history. Brailsford felt that by improving in achievable one per cent increments in a lot of areas, the team could produce a cyclist who could win the Tour de France in five years.

They made one per cent improvements in obvious areas such as nutrition, bike aerodynamics, weight, and seat comfort as well as in areas others didn’t think about. They located a pillow that provided slightly better sleep and travelled with it and another gain was made through adjustments to sleeping posture. Then, someone found a massage gel that worked marginally more effectively, and so on. These minuscule one per cent gains added up to a win in two and a half years instead of the predicted five years, and the team went on to win six races since 2012.

Why incremental change works

While you may not be gearing up to win the Tour De France, you can apply this powerful method of incremental improvement to your own life, to improve your health, relationships, finances, career, or business.

Too often we convince ourselves that impressive results demand massive action and fail miserably as we have bitten off a lot more than we can chew. However, making tiny adjustments to your life are much easier to manage and much more likely to be sustained than a huge shift.

It’s also common to think of a big win or achievement as a single event but the reality is that it’s generally the result of a series of tiny moments that each propel us one step further toward our goal.

The one per cent rule is so effective, as it can be scaled. The method works because you are making many small tweaks and building on those tweaks as they become habits.

Applying incremental change to transform your life

The starting point is to think of an area of your life you want to improve. Then think of small ways you can tweak your life to achieve that objective. The tweaks obviously don’t have to literally be as tiny as one per cent, but the objective is a series of minor changes, which built upon on a regular basis, really add up.

For example, if you are wanting to improve your health you don’t have to overhaul your lifestyle to reach your health goals, go for small, achievable changes. Try drinking an additional glass of water when you wake up, take some fruit to work to snack on, take the stairs instead of the lift at work, or get off the train one stop early to walk a little further home.

Or if you are wanting to further your career, try spending 10 minutes per day on expanding your network, incorporate some small productivity tweaks into your daily routine like not checking your emails constantly, and commit to self-growth by asking a single question every day to improve your knowledge. Building upon little, easy tasks like these can help you on your path to success.

Reaping the benefits

It is important to build though. One small tweak alone will not make an enormous difference. The challenge is to continue to make one per cent changes, without dropping the changes you’ve already made.

The key to this method, is to be consistent; it takes around 60 days to establish a habit so make sure you hang in there. You might have to even put a pause on adding any more changes to your routine as you adjust at various points along the way but just make sure you persevere to establish the changes you’ve already made.

There is no better time than the present to get started, so make the first micro change to your life today and watch each one per cent improvement add up to success.

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