Australia’s Latest Tax Changes Every Business Owner Should Understand
Saving tax probably won’t make you rich. But none of that matters because there is one thing that unites Australians (and Indians) more than cricket, complaining about the weather and arguing over property prices: We Just Hate Paying the Damn Thing.
Tax laws have changed again. Apparently, Parliament decided you, as a business owner, weren’t stressed enough, so they’ve kindly given us another batch of rules to keep accountants employed and business owners out of pocket.
So, grab your coffee (still sadly not deductible unless you’re buying it for the office) and let’s dive into what changed this month.
The Government’s Tax Reform Package Has Arrived
The Government has officially passed several tax changes that were announced in the budget and then added a few more just to keep everything exciting for us accountants. These changes will affect individuals, investors and business owners and it is going to keep you and us busy.
The changes or passing of legislation:
• Replacing the CGT discount with cost base indexation and a 30% minimum tax from 1 July 2027 passed in the Senate.
• Increasing the small business turnover threshold for the 50% Active Asset Reduction from $2 million to $10 million help small business when they eventually sell. This was basically a bribe because of the anger that was generated after the budget
• Limiting negative gearing on residential property to new dwellings from 1 July 2027 (subject to transitional rules) also passed the Senate
• Introducing the Working Australians Tax Offset from 1 July 2027 and a $1,000 standard work-related expense deduction from 1 July 2026 also passed the Senate.
And because it was not confusing enough Government is also made changes to:
• A targeted CGT discount for innovative start-ups allowing the 50% discount for innovate businesses (whatever they are).
• Preventing SMSFs using future LRBAs to buy residential property. They had to do this otherwise the Greens would not allow the budget to pass.
• Exempting testamentary discretionary trusts from the proposed minimum trust tax. It was a bit hard for the Government to claim that dead parents of minor kids were tax dodgers.
Nothing is ever simple in tax. If it was, accountants would have to find a real hobby.
New Car Limits From 1 July 2026
For the 2027 financial year:
• Maximum depreciation value: $69,883
• Maximum GST credit: $6,353
• Luxury Car Tax thresholds:
– $91,661 for fuel-efficient vehicles
– $80,809 for all others
Buying the latest luxury SUV may impress the neighbours…but the ATO is never impressed unless it results in money going to their coffers.
Small Business: Four Things You Shouldn’t Ignore
1. Payday Super has started from 1 July 2026. Super must reach the employee’s fund within 7 business days and be reported through STP.
2. The $20,000 instant asset write-off remains available for eligible businesses with turnover under $10 million to 30 June 2026 and beyond (it is now permanently in place).
3. GIC and SIC are no longer tax deductible from the 2025–26 income year (scumbags).
4. Plug-in hybrid vehicles are no longer FBT exempt from the 2026 FBT year.
Because the ATO definitely won’t ignore these changes.
The ATO Might Be Holding Your Super
The ATO may be holding forgotten super from inactive accounts, unpaid employer super that couldn’t be allocated, or Government super contributions.
You can check if your Super is being held too by looking at your myGov, ATO Online Services or the ATO App.
Having more than one Super account is costing you thousands in fees you do not need to pay. Trust me, the banks don’t need it.
Just think of it as one of the few times logging into myGov might actually make you richer.
Dental Clinic Learns an Expensive Lesson About Contractors
The Administrative Review Tribunal found an oral health therapist was an employee for super purposes, despite being treated as a contractor.
The lesson? Simply calling someone a contractor doesn’t make it true. There are many tests and the ATO will look to see what is actually happening.
Rules relating to contractors and employees are complex. If you are considering classifying anyone as a contractor talk to us first before the Super Guarantee Charge asks for you to pay the equivalent of a ransom.
Final Thought or Coffee Sip (Because Lawyers Make Us)
This is general information only and shouldn’t replace personalised advice. Before making any major tax decisions—or explaining your position to the ATO—give us a call first. It’s usually cheaper.
Please don’t:
• sell your house;
• restructure your business;
• start a cryptocurrency empire;
• or tell the ATO that “the coffee blog said it was fine.”
If you’re considering taking action, speak to a qualified professional first (preferably not your mate Dave, who once watched three YouTube videos on tax).
Prepared by Hitesh Mohanlal
