Coffee Time – Tax Update for Business Owners
Saving tax probably won’t let you retire at 45. It probably won’t make you a millionaire. It might, at best, upgrade you from a regular latte to the one with oat milk and a fancy sprinkle of cinnamon.
But none of that matters — because paying tax still feels like voluntarily donating your wallet to the Government. So grab your coffee and let’s make tax at least mildly entertaining.
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$20,000 Instant Asset Write-Off… Still Not Dead
Surprise surprise – the Governement has extended a tax rule they kept saying is “temporary.”
The instant asset write off started 1 July 2023 and was meant to end on 30 June 2024.
Yet here we are in March 2026 being told it will be extended to 30 June 2026!
If your business has aggregated turnover under $10 million, you can immediately deduct the business portion of eligible assets costing less than $20,000.
A few key points (before you impulse-buy something shiny):
• Asset must be first used or installed ready for use between 1 July 2025 and 30 June 2026.
• The $20,000 limit applies per asset — meaning multiple assets can be written off.
• It applies to both new and second-hand assets.
• Some exclusions apply — so perhaps call us before converting your “tax strategy” into a Louis Vuitton handbag.
Remember: it’s a deduction, not a 100% rebate. The ATO is not buying you a jet ski.
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Businesses Using Cash to Dodge Obligations
The Australian Taxation Office (ATO) is “cracking down” on businesses that treat cash like an invisibility cloak.
The usual red flags include:
• Not reporting all sales and skipping receipts.
• Avoiding GST, income tax, PAYG withholding, super guarantee, insurance and workers’ compensation.
• Magically reporting income just under the $75,000 GST threshold.
• Underpaying workers or ignoring award conditions.
• Undercutting honest businesses by offering “cash-only discounts.”
Workers paid “cash-in-hand” often lose out on super, protections, and coverage if injured.
In short: if your business model relies on pretending it’s 1987 and EFTPOS doesn’t exist, the ATO would like a word.
You’ve been warned.
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Contractors and Selective Memory
If you ever chat to the ATO, they’ll tell you contractors sometimes develop convenient tax-time amnesia.
Through data matching, the ATO can see payments made to contractors — even if the contractor “forgets” to declare them.
Industries that routinely report subcontractor payments include:
• Building and construction
• Courier services
• Cleaning
• Information technology
• Road freight
• Security and surveillance
So when a contractor declares suspiciously low income, the ATO’s systems politely whisper, “That’s interesting…”
The cure for ATO-induced amnesia? Audits, interest, and large fines. Highly effective. Very uncomfortable.
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Government Payment Programs
If you receive government payments for delivering services under Commonwealth programs (healthcare, disability support, childcare etc.), the ATO is watching closely.
This includes payments such as:
• Aged Care subsidies
• Income under the National Disability Insurance Scheme (NDIS)
The ATO has updated its Government Payments Program data-matching protocol and has been contacting taxpayers and agents to ensure income is correctly reported.
Obligations are simple:
• Keep accurate records.
• Report all income received.
“Oops, I didn’t realise that counted” is not a recognised accounting method.
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Check Your GST Credits Before Lodging BAS
If you’re registered for GST, you can claim input tax credits on business purchases.
But:
• If something is partly private use, you must apportion it.
• No tax invoice? Don’t claim.
• Cancelled or reversed purchase? Don’t claim either.
• No GST in the price (e.g., bank fees)? Definitely don’t claim.
Example: If you buy a car for ride-sourcing (say driving for Uber), you can only claim GST credits on the business-use percentage.
And even if you have nothing to report — you must still lodge a nil BAS on time.
Remember – silence is not a lodgment strategy.
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$61,000 of “Work-Related” Expenses… Really?
A recent case before the Administrative Review Tribunal (ART) is a masterclass in what not to do.
A full-time engineer working from home two days per week claimed over $61,000 (!) in deductions in one year. This included:
• Car expenses
• Travel expenses
• Clothing
• Home office costs
The ATO disallowed most of it. The ART agreed.
Why?
Because the evidence didn’t stack up.
For example:
• Logbook entries didn’t match independent records (hard to be “driving to Melbourne” when your car is getting a gearbox replaced in Sandgate, QLD) or you are in Rockhampton but at the same time passing through the tolls on Gateway Motorway
• Ride-share receipts lacked dates, times, and destinations.
• Home office claims were estimates without proper supporting documents.
The ART was not convinced the apportionment was fair or reasonable.
In short:
• Claims must make sense.
• Documents must support them.
• Records must not contradict reality.
• And $61,000 in work-related expenses for a salaried engineer was…lets be honest…. A bit optimistic.
Never assume the ATO is foolish. More often than not, it’s the taxpayer who ends up looking foolish — and considerably poorer.
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Final Sip
Disclaimer (Because Lawyers Make Us):
This has been your dose of ATO and taxes bureaucratic drama and financial soap opera.
Look, we’ve done our best to make this info helpful, accurate, and only mildly boring. But don’t go quitting your business, selling your house, or launching a crypto empire based solely on what you’ve read here. This is general advice – not a personalised financial horoscope.
If you’re thinking of acting on any of it, please chat to a real-life professional (preferably one who’s qualified, not just good at Monopoly or one that sits in the pub). Professionals can help make sure the advice actually fits your situation and doesn’t end in a surprise ATO love letter.
And if you are silly enough not to speak to me or a professional don’t think that somehow we are responsible for your silliness.
