Tax changes in 2024-25 that may apply to your small business
The new financial year has begun, which means it is now time to wrap up the 2024-25 financial year, here is a list of changes and rates that you will need to be aware of for your business in preparation for the 2024-25 tax return.
Small business instant asset write-off
Small business with aggregated annual turnover of less than $10 million will be able to continue to immediately deduct the full cost of eligible assets that cost $20,000 or less. Eligible assets must be first used or installed ready for use between 1 July 2024 and 30 June 2025, and the write-off applies on a per asset basis.
The Labour Government has announced that it will extend the $20,000 instant asset-write off threshold for small business to the 2025-26 income year, however this has not been legislated.
Division 7A rate
The Division 7A ATO benchmark interest rate for 2024–25 is 8.77%.
The Division 7A ATO benchmark interest rate for 2025–26 will be 8.37%.
Car depreciation cost limit
The car depreciation limit for 2024-25 is $69,674.
This amount will remain unchanged for the 2025-26 income year.
Amendment period extended for business tax return
From the 2024-25 income year onwards, businesses turning over less than $50 million now have a longer window of up to four years from the date of assessment to make tax return amendments.
Previously the amendment period for small businesses was two years from the date of the tax assessment.
GST reporting enforcement
The ATO has announced that from 1 April 2025, it will begin transitioning small business with a history of non-compliance, from quarterly to monthly GST reporting.
If a business has a history of non payment, late or non lodgment or incorrect GST reporting, the ATO may require it to report monthly instead. The move is designed to improve compliance with GST obligations and build good business habits.
ATO interest charges no longer deductible from 1 July 2025
Amended legislation under ss 25-5 and 26-5 of ITAA 1997 will deny deductions for ATO interest charges, specifically the general interest charge (GIC) and shortfall interest charge (SIC), incurred on or after 1 July 2025.
Any GIC or SIC incurred prior to 1 July 2025 is not impacted by the changes to the law and will continue to be deductible for your 2024–25 and earlier tax returns.
Superannuation guarantee rate change
From 1 July 2025, the superannuation guarantee obligation for employers will rise from 11.5% to 12% for contributions made for employees.
Contact us
If you need to know more about the matters discussed above, please feel free to contact our office for more information.
