Small business – $20,000 Instant asset write-off
The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025External Link has extended the $20,000 instant asset write-off limit to the 2025-26 income year. The measure aims to support small business entities with an aggregated annual turnover of less than $10 million.
Eligible small business entities can immediately deduct the business use portion of the cost of eligible depreciating assets costing less than $20,000. You must first use or install ready for use for a taxable purpose between 1 July 2025 and 30 June 2026.
The $20,000 limit applies on a per asset basis, so small business entities can instantly write off multiple assets. Small business entities can also immediately deduct an eligible amount included in the second element of a depreciating asset's cost.
The 5-year 'lock out' rule is suspended until 30 June 2026. Normally this rule prevents small business entities from re-entering the simplified depreciation regime if they opted out.
If you're claiming a deduction under the instant asset write-off, complete P8 Expenses – label M and P10 Small business entity simplified depreciation – label A.
For more information, see Small business support – $20,000 instant asset write-off.
Denying deductions for ATO interest charges
The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025External Link amended the tax law to deny income tax deductions for general interest charges (GIC) and shortfall interest charges (SIC). The amendments apply in relation to assessments for income years starting on or after 1 July 2025.
This means taxpayers can’t claim a deduction for GIC and SIC incurred on or after 1 July 2025 from their 2025-26 income tax return and onwards. GIC and SIC incurred before 1 July 2025 will continue to be deductible for the 2024-25 and earlier income years.
As GIC and SIC are no longer deductible, any GIC or SIC that is later remitted, will no longer need to be included as assessable income in the year in which the remission occurred. Remissions of GIC and SIC are assessable only if the original interest was deductible.
Any GIC or SIC incurred prior to 1 July 2025 that is later remitted must be included in the assessable income in the year in which the remission occurred.
For more information see: Denying deductions for ATO interest charges
Personal Services Businesses and Part IVA
Practical Compliance Guideline PCG 2025/5 Personal services businesses and Part IVA of the Income Tax Assessment Act 1936 has been published. This Guideline is relevant to those with alienation arrangements where personal services income (PSI) is derived through a company or trust (called a personal services entity or PSE).
Income is classified as PSI when it is mainly (more than 50%) a reward for personal efforts or skills. An alienation arrangement may create a compliance risk when it is used to retain income in the PSE (‘retention of profits’ arrangements) or divert income to associates (‘income splitting’ arrangements), or both, so that overall, less tax is paid.
This Guideline outlines the types of alienation arrangements that the Commissioner considers to be ‘low risk’ or those which are ‘higher risk', and the likelihood of ATO reviewing those arrangements.
For more information see
Prefill for Sole traders
Data that we receive from payers will be prefilled into some fields of your tax return from this year. You may see information about payments (including Government grants) that were reported to us on a Taxable Payment Annual Report or in relation to your Australian Business Number (ABN). Also the value of your Opening stock (if any) will be prefilled to your tax return this year from prior year information you provided.
You must check any prefilled data.
myTax can populate a maximum of 20 fields. If we have data about more than 20 payments to you in a year, the last field will be an aggregated amount of the remainder of the payments.
Prompting in myTax will help you navigate the prefilled information.
Continue to: Instructions to complete the BPI schedule2026
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