Apr 1, 2025 Joel Hernandez

Upcoming changes in the tax scene

The Australian tax system is constantly changing, and staying informed is essential.  Let’s take a look at some pending key changes.

Superannuation: Two Key Changes on the Horizon

There are two key changes to superannuation scheduled from 1 July 2025:

• The Super Guarantee rate will increase again. From this date, employers will need to contribute 12% (up from 11.5%) of their employees’ ordinary time earnings to superannuation. This is the last scheduled increase to the Super Guarantee rate.
• The government will start to pay super guarantee contributions on government-funded Parental Leave Pay for children born or adopted on or after 1 July 2025. This is aimed at closing the superannuation gap, particularly for women who often take time out of the workforce to care for children.

 Removal of Deductibility of Interest Charges (not yet law)

The government is to remove the tax deductibility of ATO interest charges from 1 July 2025. If legislation is passed, taxpayers will no longer be able to claim deductions for general interest charges (GIC) and shortfall interest charges (SIC) imposed by the Australian Taxation Office (ATO). This change will affect those with outstanding tax debts, so it is important to be aware of it and plan accordingly.  The current SIC is 7.42% and the GIC rate is a hefty 11.42%,  Denying a tax deduction for these charges will make them hurt even more.

 Small Business Support: $20,000 Instant Asset Write-Off Extension (not yet law)

In the 2024-25 Budget, the Government announced that it will support small businesses by extending the $20,000 instant asset write-off.  This measure aims to stimulate investment and growth by allowing small businesses to reinvest the resulting tax savings into their operations. This tax concession is proposed to continue until 30 June 2025.

The proposed extension only applies to businesses with an aggregated turnover of less than $10 million. Small businesses can immediately deduct the full cost of eligible assets costing less than $20,000. The assets must be used or installed and ready for use between 1 July 2023 and 30 June 2025. Remember that this applies per asset, so multiple purchases can qualify. For assets over $20,000, the standard depreciation rules apply.

If you have any queries or concerns, please contact RDL accountants for further guidance or consultation.