Key Changes to Business Tax Returns for 2025

What business owners and managers need to know this tax time

As part of the NTAA’s 2025 Tax Schools – Day 2 seminar, major updates were outlined that impact how businesses prepare and lodge their 2025 income tax returns. Below is a summary of the key changes and ATO focus areas all business clients should be aware of.

🧾 1. Temporary Measures Removed from 2025 Tax Returns

With COVID-era stimulus measures now ended, the ATO has removed the following labels from business tax returns:

• Temporary Full Expensing (TFE)
• Backing Business Investment incentive
• Loss Carry Back Tax Offset

⛔ These deductions and concessions no longer apply to the 2025 income year. Businesses must revert to standard depreciation rules unless eligible for the new $20,000 instant asset write-off.

⚡ 2. Small Business Energy Incentive – Claim in 2025 Return

Eligible small businesses (<$50 million turnover) may claim a 20% bonus deduction on energy-efficient assets (up to $20,000 in eligible spend).

Applies to eligible upgrades installed between 1 July 2023 and 30 June 2024 — claimable in your 2025 tax return.

📉 3. $20,000 Instant Asset Write-Off (Capped & Pending Legislation)

Subject to legislation passing, from 1 July 2023:

• Instant write-off cap is $20,000 per asset
• Applies only to businesses with turnover under $10 million
• Assets over $20,000 must be added to the small business pool and depreciated

💡 Businesses need to ensure installation or first use occurs before 30 June 2024.

🔍 4. Stronger ATO Focus: Trusts, Loans & Private Use

The ATO will increase reviews around:

• Trust distributions and Section 100A risks
• Division 7A loans and unpaid entitlements to corporate beneficiaries (especially following the Bendel v FCT case)
• Personal use of business assets (e.g. vehicles, homes, travel)

✅ Business owners need proper documentation and commercial arrangements in place.

🧾 5. No More Loss Carry-Back Claims

The loss carry-back tax offset ended 30 June 2023.
Losses incurred in 2025 can only be carried forward — not back — for use in future years.

📚 NTAA Recommendations for 2025

• Prepare early for the depreciation rule changes
• Keep clear records of energy-efficient purchases and asset use
• If using a trust or private company, review your loan accounts and distribution strategies before 30 June
• Avoid overclaiming vehicle, travel or home office deductions — these remain key ATO audit triggers

We attended the NTAA 2025 Tax Schools and are across the latest changes. If you’d like to:

• Review your eligibility for the energy bonus deduction
• Clarify how to treat new assets or prior-year losses
• Get ahead of ATO audit risks

…we’re ready to assist.

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Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? Then why not contact me at our Falconbridge office or Luera office in Blue Mountains office to arrange a one-on-one consultation. Just Book Free Consulation up on the right to find the appointment options.

 Yan Qi CA

Mobile: 0403 050 779

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