Tax update September 2025
From tax debt deductions to back pay reporting, here’s how the latest ATO changes could affect you.
What’s changing?
While sweeping tax reforms aren’t expected this year, several targeted changes could affect your bottom line.
Tax debt no longer deductible
The ATO is reminding taxpayers the general interest charge (GIC) applied on an unpaid amount of tax or other liabilities after the due date is no longer tax deductible.i
The current rate applied to GIC debts is 11.17 per cent, with the interest charge compounding daily.
Prior to 1 July 2025, GIC could be claimed as a deduction in your tax return, but with the deduction no longer available, small businesses carrying any tax debts will now pay more.
Back pay reporting change
From the start of the 2025-26 tax year, the way that back payments to employees are treated and reported has changed.ii
In previous tax years, back payments accrued more than 12 months prior and exceeding $1,200 were reported at Lump Sum E in Single Touch Payroll (STP) reports.
The $1,200 threshold has now been removed, so all back payments accrued more than 12 months ago must be reported regardless of the amount.
Small Business Clearing House to close
The ATO’s Small Business Clearing House (SBCH) will shut down ahead of the new Payday Super regime launching 1 July 2026.iii
Small businesses with 19 or fewer employees could use the SBCH to pay their quarterly super contributions to the super funds selected by eligible employees.
The ATO says it will provide information to small businesses about transitioning to alternative super payment services, but businesses are being encouraged to take steps towards changing their payment arrangements before 1 July 2026.
Support for new small businesses
The ATO is providing extra support for new small business owners to help them understand and comply with their tax, super and registry obligations.
With around 50 per cent of businesses failing in their first three years, the new Ready for Business Program is designed to help owners get their ATO obligations correct from the start.
ABN holders will receive a series of emails with tips on their ABN obligations, business structure, registering for GST and employer responsibilities.
Focus on GST compliance
The ATO is also encouraging small businesses to set aside their GST payments in a separate bank account to avoid being caught out when it comes time to pay their obligations.iv
Compliance with GST registration and payment obligations remain an ongoing concern for the regulator, with the current annual tax gap estimated to be around $8 billion.
GST registration is compulsory when turnover exceeds $75,000 or if a business provides taxi, limousine or ride-sourcing services.
Notifying SMSF changes
SMSF trustees are being urged to ensure they notify the ATO whenever modifications are made to their SMSF.
Changes related to the fund’s contact details, structure, status or bank account must all be submitted to the regulator within 28 days.
Once the ATO receives the change details, the regulator will send an alert vis SMS or email to safeguard the SMSF against potential fraud or misconduct.
Work-related deductions continue to grow
Release of the annual Taxation Statistics Report for 2022-23 shows work-related expenses continue to dominate the tax deductions claimed by individuals, ensuring the ATO will maintain its current focus on this area.
Work-related expenses accounted for 50 per cent of individual deduction claims, with 10.3 million Australian taxpayers claiming an average of $2,739 per person in 2022-23.
Need help navigating the changes?
If any of these updates affect your business or personal tax situation, please contact the Carrick Aland team in Dalby, Toowoomba or Chinchilla for help to understand your obligations, adjust your reporting processes and to plan ahead.
i ATO reminder on interest deductibility changes from 1 July | Australian Taxation Office
ii The way you treat and report back payments is changing | Australian Taxation Office
iii Small Business Superannuation Clearing House | Australian Taxation Office
iv ATO announces additional support for new small business owners | Australian Taxation Office
