Key Tax Updates for October 2025: What You Need to Know

In our October 2025 tax update, we explore a range of topics, including tax debt no longer deductible, back pay reporting changes, Small Business Clearing House to close, new support for small businesses and much more.

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 that the general interest charge (GIC) applied on an unpaid amount of tax or other liabilities after the due date is no longer tax deductible.

The current rate applied to GIC debts is 11.17%, with the interest charge compounding daily.

Prior to 1 July 2025, GIC could be claimed as a deduction on 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.

In previous tax years, back payments accrued more than 12 months prior and exceeding $1,200 were reported as 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 on 1 July 2026.

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.

Compliance with GST registration and payment obligations remains 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 via 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% 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 us for help to understand your obligations, adjust your reporting processes and plan ahead.

Important information – Oracle Advisory Group makes no representation or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. The information in this document is general information only and is not based on the objectives, financial situation or needs of any particular investor. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek their own professional advice. Past performance is not a reliable indicator of future performance. The information provided in the document is current as the time of publication.