As the new financial year begins, it is essential for you and your business to understand the key tax and compliance changes that will shape the commercial landscape. The start of a new year is a pivotal time to reflect on past performance and strategically plan for the future. Staying ahead of regulatory shifts is crucial not only for ensuring compliance but also for identifying strategic opportunities as you look forward to the 2026 financial year and beyond.
To help you prepare, this article covers the key changes and areas of ATO focus for the new financial year. We will explore significant shifts in superannuation, asset write-offs, trust compliance and more, equipping you with the essential knowledge to make informed decisions for your business.
Here is what you and your business need to know.
Manage your cash flow and payroll
- Prepare for Payday Super
A significant operational change is on the horizon for all employers. From 1 July 2026, you will be required to pay employee superannuation at the same time as their wages rather than quarterly. This ‘Payday Super’ regime will have a direct and immediate impact on your business’s cash flow, as these contributions must be managed and paid with every pay cycle instead of in a lump sum each quarter. To prepare for this shift, it is critical to review your payroll processes now to ensure you have the systems and cash flow arrangements in place to remain compliant when this change comes into effect.
- Meet your superannuation deadlines
The ATO’s use of Single Touch Payroll (STP) reporting gives it greater clarity than ever before on the amount and timing of your superannuation payments. As a result, the ATO is actively issuing notices to businesses that do not remit super payments by the quarterly deadlines.
It is vital to remember that the superannuation rules indicate that contributions must be in the employee’s fund by 28 days after the end of the quarter, not just paid by you on that date. Most payroll systems use clearing houses, which can take between five to ten days to complete the transfer to employee super funds. You must consider this processing time when making payments to remain compliant. We strongly recommend you pay your end-of-quarter superannuation by the 15th day of the month following the quarter’s end to allow ample processing time. For the current financial year, the superannuation guarantee charge will remain at 12%.
Review your asset purchases and deductions
- Instant asset write-off threshold
On 4 September 2025, the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 (the Bill) was introduced into the House of Representatives.
Relevantly, Schedule 7 to the Bill proposes to amend section 328-180 of the Income Tax (Transitional Provisions) Act 1997 to extend the $20,000 instant asset write-off by 12 months until 30 June 2026.
The measure proposes to allow small businesses with an aggregated annual turnover of less than $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose on or before 30 June 2026.
- Interest charges are no longer deductible
In a move that will affect taxpayers who are late with payments, from 1 July 2025 General Interest Charges (GIC) and Shortfall Interest Charges (SIC) imposed by the ATO will no longer be tax-deductible. Previously your business could claim these deductions to help offset the financial burden of late tax payments or amended assessments.
Any GIC or SIC incurred on or after this date will not be deductible even if the underlying tax debt relates to an earlier income year. This change applies to all taxpayers including those with a Substituted Accounting Period (SAP). The interest is considered incurred when the ATO issues the notice of assessment or amended assessment.
Understand your obligations if you are growing
If your company’s turnover is moving from under $50 million to over $50 million you need to be aware of the significant implications for your compliance obligations. This includes a change of tax rate from 25% to 30% and a possible ASIC audit if you meet two out of three specified tests for large proprietary companies relating to revenue assets and employees.
For businesses with material transactions with international related parties the ATO continues to focus on transfer pricing arrangements. Once your business has over $2 million in international related party transaction you are required to prepare an International Dealings Schedule with your tax return.
Transfer pricing refers to the rules for pricing transactions between related entities to ensure they are conducted at arm’s length. You must have comprehensive and ATO-compliant transfer pricing documentation in place before lodging your tax return.
Navigate trust compliance and property sales
- Section 100A
The ATO is still targeting Section 100A of the Income Tax Assessment Act 1936, which is an anti-avoidance provision relating to trust arrangements known as ‘reimbursement agreements’. This occurs, for example, where parents benefit from distributions made to an adult child from a family trust and the child does not receive their distribution in cash. Section 100A is designed to ensure the distributed funds pass to the nominated beneficiary for their ultimate use.
- The Bendel case
The Bendel case, which involves unpaid present entitlements (UPEs) from trusts to corporate beneficiaries, remains a key issue. Historically, the ATO has treated UPEs as loans under Division 7A, meaning they could trigger deemed dividends and tax liabilities. While the Full Federal Court ruled on 19 February 2025 that UPEs do not constitute loans under Division 7A, the ATO disagrees with this ruling. The ATO was granted special leave to appeal to the High Court on 12 June 2025 and will continue to apply its existing guidance in TD2022/11 until the appeal is resolved.
- Changes to foreign resident capital gains withholding
From 1 January 2025, the foreign resident capital gains withholding rate increased to 15% and the threshold has been removed. Anyone selling a property must obtain a clearance certificate. If you are a non-resident 15% of the total sale price will be withheld unless you apply for a variation. A variation can be beneficial, for example, if the taxpayer has capital losses carried forward, which can be considered in determining the withholding percentage to apply to a property sale.
Plan for personal superannuation opportunities
The concessional contributions cap for 30 June 2026 will remain at $30,000 and the non-concessional contributions cap will remain at $120,000 or $360,000 as a 3-year brought forward lump sum.
From 1 July 2025, the Transfer Balance Cap is now $2,000,000, giving taxpayers greater planning opportunities when starting a pension. If you are thinking of retiring in the next few years, you should speak to your William Buck Wealth Advisor to plan for these opportunities and implement critical strategies sooner rather than later.
Be aware of ATO compliance hotspots
The ATO continues to focus on incorrect claims from individuals in several areas:
- Home office expenses, especially when using the set rate and also claiming mobile phone expenses. It should be noted that you need specific records to support your working from home hours.
- Car expenses where the car cost limit for 2026 is $69,674, which is the maximum you can claim for depreciation on a car claimed under the logbook method.
- Rental properties to ensure deductions can be supported and are correctly allocated between repairs and capital items. Also ensuring any private use is taken into account with respect to deduction claimed.
- Cryptocurrency where proper reporting and substantiation of digital asset holdings are essential.
The ATO is also continuing to review GST registrations and auditing businesses to ensure they have genuine GST claims. Ensuring you have compliant tax invoices is a must particularly if you are making a large GST refund claim.
Finally, if your business is engaged in R&D activity you should consult your tax adviser to see if you are entitled to any incentive. The deadline for applying is 30 April 2026 but you need to get documentation in place long before the cut-off date especially if your company tax return is due before this date.
Navigating these diverse and detailed changes requires careful and proactive planning. To understand how these updates will specifically impact your business and to implement critical strategies contact your William Buck advisor today.
