FY’25 Tax & Compliance Changes – What Individuals and Businesses Need to Know

Welcome to FY’25: A New Financial Landscape

As the new financial year unfolds, individuals and businesses across Australia are navigating a wave of tax and compliance changes. From revised tax brackets to superannuation increases and tighter ATO scrutiny, FY’25 brings both opportunities and responsibilities. At 7 Bells, we’re here to help you stay ahead of the curve with expert guidance tailored to your financial goals.

Key Changes for Individuals

Income Tax Brackets – Stage 3 Tax Cuts

The long-awaited Stage 3 tax cuts have reshaped the personal income tax landscape:

Income Range vs Tax Rate (FY’25)

• $0 – $18,200: Nil

• $18,201 – $45,000: 16%

• $45,001 – $135,000: 30%

• $135,001 – $190,000: 37%

• $190,001 and over: 45%

These changes simplify the tax structure and offer relief to middle-income earners. However, they also impact tax planning strategies, especially for those with investment income or multiple income sources.

Work-from-Home & Car Expense Deductions

• Work-from-home deduction: Increased to 70¢/hour

• Car expenses: Raised to 88¢/km

Make sure to maintain accurate logs and receipts to support your claims.

Updates for Businesses

Fringe Benefits Tax (FBT) Audits

The ATO has flagged FBT audits as a focus area in FY’25. Businesses offering perks like company cars, entertainment, or housing allowances should:

• Review FBT declarations

• Ensure proper documentation

• Consider consulting a tax advisor for risk assessment

Instant Asset Write-Off

The $20,000 instant asset write-off has been extended until 30 June 2025. This allows eligible small businesses to immediately deduct the cost of assets under $20,000, helping with cash flow and investment planning.

Superannuation Changes

Employer Contributions

• SG rate increased to 11.5% from 1 July 2024

• Set to rise to 12% from 1 July 2025

Employers should update payroll systems and budgets to reflect these changes. Employees may also want to review their super strategies to optimise contributions and retirement planning.

SMSFs & Trusts: What’s New

IAS Lodgment Now Mandatory

The ATO now requires Instalment Activity Statements (IAS) to be lodged manually by SMSFs if a notice is received. This change removes automatic lodgment and places responsibility on trustees and administrators.

Trust Reporting

Trusts must ensure accurate beneficiary reporting and compliance with distribution rules. The ATO is increasing scrutiny on trust structures used for tax minimisation.

Planning Tips for FY’25

• Review cash flow and budgets early in Q1

• Book your tax return appointment ahead of deadlines

• Update payroll and accounting systems for new rates

• Keep detailed records for deductions and compliance

How 7 Bells Can Help

Whether you’re an individual, business owner, or SMSF trustee, 7 Bells offers:

• Personalised tax planning

• Compliance reviews

• Bookkeeping and advisory services

• Support with ATO correspondence and audits

Our certified team in Xero and QuickBooks ensures your financials are accurate, timely, and compliant.

Let’s Make FY’25 Your Strongest Year Yet

Tax time doesn’t have to be stressful. With the right guidance and proactive planning, you can turn compliance into opportunity.

Ready to plan your FY’25 strategy? Book a consultation with us at info@7bells.com.au.

References

1. ATO – Individual Income Tax Rates and Threshold Changes
   https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/individual-income-tax-rates-and-threshold-changes

2. ATO – Work-from-Home Expenses
   https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/working-from-home-expenses

3. ATO – Work-Related Car Expenses
   https://www.ato.gov.au/forms-and-instructions/individual-tax-return-2025-instructions/deduction-questions-d1-d10-individual-tax-return-2025/d1-work-related-car-expenses-2025

4. ATO – Super Guarantee Rate Increase
   https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/super-guarantee

5. ATO – FBT Audit Focus Areas
   https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/privately-owned-and-wealthy-groups/what-attracts-our-attention/areas-of-focus-2024-25

6. ATO – SMSF Annual Return Lodgment
   https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/smsf-administration-and-reporting/lodge-smsf-annual-returns