May 2026

May is less about reminders and more about actual changes and enforcement trends coming through before year-end. A few key developments are worth noting this month.

Tax debt getting more expensive

The ATO has tightened its position on tax debt, and the cost of carrying it has increased significantly.

• Interest charged by the ATO is no longer tax deductible from 1 July 2025

• This applies to both general interest and shortfall interest charges

• Holding ATO debt is now materially more expensive than before

At the same time, the ATO is continuing to actively pursue older and on-hold debts, including amounts that may not have been visible previously

Payday super getting closer

The ATO has released more guidance and tools to prepare businesses for payday super.

• A formal checklist has been released to help businesses transition

• The change is expected to apply from 1 July 2026

• Super will need to be paid at the same time as wages, not quarterly

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Real-time data matching expanding

The ATO is continuing to expand its use of real-time and third-party data.

• Increased reliance on STP payroll reporting

• More automated cross-checking of income and transactions

• Greater use of digital systems for lodgement and reporting

  
  

GST reporting tightening for some businesses

The ATO is moving some businesses with compliance issues from quarterly to monthly GST reporting.

• More frequent BAS lodgements

• Closer monitoring of activity

• Less flexibility for businesses that fall behind

Instant asset write-off still available

The $20,000 instant asset write-off continues to apply for the 2025–26 financial year.

• Applies to eligible small businesses

• Can be used to immediately deduct asset purchases under the threshold

• Timing of purchase before 30 June is critical

  
  

Individual tax changes on the horizon

There are also upcoming changes affecting individuals from 1 July 2026.

• Proposed $1,000 standard deduction for work-related expenses

• Changes to lower income tax rates under Stage 3 adjustments

  
  

What to focus on now

• Review any ATO debt - it’s now more expensive to carry

• Ensure super is up to date before payday super changes

• Use the instant asset write-off strategically before 30 June

• Make sure reporting is accurate given increased data matching

• Address any compliance issues before they trigger stricter ATO action

  
  

If you want help navigating these changes or understanding how they apply to your situation, Apex Tax Advisory can assist.