Coffee Update – August 2026
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 should suffer as a business owner. So, naturally Parliament has been sitting around a table drinking tea and concocting fresh ways to make running a business feel like attempting to reverse-park a V12 Lamborghini in a telephone box.
So, pour yourself a hot mug of coffee (still completely non-deductible, because of course it is) and let’s inspect the latest legislative disasters.
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 $20,000 Instant Asset Write-Off (Is Now Permanent)
In a rare, terrifying moment of sanity the Government has done something worthwhile. As promised in the budget, it has introduced legislation to make the $20,000 instant asset write-off permanent. Yes, permanently. I’ll give you a moment to recover from the shock.
If Parliament actually manages to pass it, it starts from 1 July 2026:
• You can write off eligible depreciating assets up to $20,000 instantly (instead of the laughable $1,000 limit they keep trying to drag us back to).
• The general small business pool threshold will also sit permanently at $20,000.
• They’ve also suspended the infamous ‘lock-out rule’ until 30 June 2027. (For those who don’t spend their weekends reading tax acts, this is the rule that banishes your business to the tax wasteland for five years if you dare opt out of simplified depreciation).
What does this mean to you? It means if you need a brand-new, power-packed piece of machinery for your business—say, an absurdly large hydraulic press or a heavy-duty trailer—you don’t have to spread the deduction over the next four decades. You buy it, you write it off, and you tell the ATO to jog on.
Loss Carry Back Returns
Remember when the world turned upside down and then back to front in 2020? The Government let companies carry back losses to get actual cash refunds on tax they’d paid in better times? Well, it’s back.
Legislation has been introduced to re-boot the ‘loss carry back’ scheme from 1 July 2026. If your company hit a bit of a snag and made a tax loss, you don’t just have to sit there staring at it like a broken-down supercar on the side of the Bruce Highway. You can carry that loss backwards and offset it against profits you paid tax on in the previous two income years.
The result? The ATO—a machine designed purely to suck money out of your bank account—might actually have to send some of it back. It’s like demanding a refund from a thief. Marvellous.
ATO Warning: Don’t Claim Your Dining Room
The ATO has launched a full-scale assault on business owners and employees claiming “occupancy expenses” (rent, mortgage interest, rates) because they occasionally answer an email while sitting in their underpants at the kitchen bench.
If you want to claim mortgage interest or rent on your home, the ATO says your space must be an actual, unassailable ‘place of business’. To prove this without getting dragged into an audit room and tortured, you must satisfy four strict rules:
• It must be clearly identifiable as a place of business (a desk covered in coffee mugs and tax bills in your bedroom don’t cut it).
• It cannot be readily capable of private or domestic use (if you can fold up your laptop and eat a microwave curry on the same surface, you lose).
• It is used exclusively or almost exclusively for business.
• It is used regularly for client or customer visits (unless your clients enjoy tripping over your dog on the way to the kettle, good luck).
If you are an employee, you also must prove your employer was so outrageously stingy they didn’t provide you with an alternative workplace at all. If you meet these brutal hurdles, you can claim a fraction of your expenses based on floor area and time. But be warned: the tax office is watching, and they have no sense of humor so don’t expect them to laugh at your hilarious excuse.
Property Manager Reports: A Minefield Of Errors
If you own investment property, you probably receive a nice, neat end-of-year summary from your property manager and hand it straight to your accountant. The ATO has publicly warned that these reports are frequently littered with mistakes. Apparently, they are about as accurate as undertaking surgery whilst being tickled.
The tax man’s hitlist of common property report errors includes:
• Capital expenses disguised as repairs: Fixing a tap is a repair; replacing a rotten balcony before a tenant falls off it is capital. You can’t deduct capital costs all at once.
• Grouped lump sums: Managers dumping $5,000 into a line item called “Maintenance” without explaining whether it was for a lightbulb or a new roof.
• Timing mismatches: Mixing up when expenses were actually incurred versus when the property manager got around to paying them.
• Private slip-ups: Smuggling personal expenses—like the owner’s weekend stay at the property—onto the ledger.
Don’t assume your property manager is a tax expert. They aren’t. Your accountant must inspect these reports with a fine-tooth comb before the ATO does.
Scammers Impersonating The ATO (and Doing a Worryingly Good Job)
As if the official ATO wasn’t scary enough, fake ones are now sending out phishing emails designed to steal your myGov credentials.
The latest scam email claims you have a “scheduled phone appointment with the ATO” and tells you to open an attached file to confirm or reschedule. That attachment leads to a fake myGov login page that looks utterly genuine—until it drains your passwords and personal security codes.
Remember The ATO Golden Rules — The ATO will NEVER:
• Email you an attachment containing a link to a myGov login page.
• Force you to access ATO services via unsolicited email links.
• Send you to a login page outside official .gov.au websites.
• Ask for your myGov password, username, or SMS codes via email.
If you receive one of these, do not click it. Do not open the attachment. Delete it, or call us immediately.
Final Coffee Sip (Because Lawyers Lack A Sense Of Humour)
This article contains general thoughts and observations only. It does not replace proper, tailored professional advice. Before you make any monumental financial decisions—or attempt to explain your unconventional tax strategies to the ATO—talk to tax agent first. It is infinitely cheaper than paying penalties.
Please, under no circumstances, attempt to:
• Sell your factory floor to buy physical gold;
• Declare your home dining room a sovereign international trade zone;
• Pay your staff in vintage wine; or
• Tell an ATO auditor that “this Coffee Update said it was fine.”
—Hitesh Mohanlal
