The Latest Tax Reforms and What They Mean for Small Businesses

Recent tax reforms in Australia have introduced significant changes that impact small businesses. From adjustments in thresholds to new deductions and compliance requirements, understanding these changes is crucial for business owners to optimise their tax obligations and take advantage of available benefits.

Key Tax Reforms Affecting Small Businesses

1. Corporate Tax Rate

The Australian government has been progressively lowering corporate tax rates for small businesses:

• Businesses with a turnover of up to $50 million benefit from a 25% corporate tax rate (since 2022).
• Further reductions may be on the horizon, with industry groups pushing for a 20% rate for small enterprises.

2. Instant Asset Write-Off

• The instant asset write-off threshold remains at $20,000 for businesses with an annual turnover of less than $10 million until 30 June 2025.
• This allows businesses to immediately deduct the cost of assets such as machinery, equipment, and vehicles rather than depreciating them over several years.
• Currently, labour have announced a 12-month extension to this threshold until 30 June 2026 which is not yet legislated. The liberals have announced they would make the threshold $30,000 and make this change permanent if they win the election.

3. Superannuation Changes Affecting Employers

• From 1 July 2026, employers will need to pay superannuation for employees when they are paid instead of quarterly.
• The superannuation guarantee rate is also increasing from 11.5% in 2025 to 12% from 01 July 2025.

4. GST and BAS Reporting Changes

• Starting from 1 April 2025, small businesses with a history of non-payment, late or non-lodgement, or incorrect reporting will be moved from quarterly to monthly GST reporting. This initiative aims to foster better compliance habits. The ATO will notify affected businesses directly about this change. Changes to reporting cycles will remain in place for a minimum of 12 months as part of the ATO’s ‘Getting it right’ campaign.

For more detailed information or assistance, visit the ATO’s website or consult a qualified tax professional.

– Heida Bell

Posted 29.04.2025

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.