Federal Budget introduces key tax changes for SMEs

The federal Budget included several business tax changes that could improve cash flow flexibility for SMEs over the next few years.

One of the biggest announcements was the decision to make the $20,000 instant asset write-off – which had been a temporary measure that was rolled over several times – permanent from 1 July 2026.

That means eligible small businesses will continue to be able to immediately deduct qualifying assets under $20,000 instead of depreciating them over time.

For businesses planning upgrades or expansion, that creates more certainty around investment decisions.

New support for losses and cash flow

The government also announced:

• The return of loss carry back from 2026–27.

• New loss refundability rules for start-ups from 2028–29.

• More flexibility around PAYG instalments.

Under the loss carry back rules, eligible companies will be able to offset current-year losses against tax paid in the previous two years.

The government said this is designed to support risk taking and resilience during more difficult trading periods.

Where the changes could have the biggest impact

For SMEs, timing matters.

Changes that improve cash flow or reduce tax pressure can influence decisions around:

• Equipment purchases.

• Staffing.

• Expansion plans.

• Borrowing needs.

As businesses reassess plans after the Budget, funding structures may also come back into focus.

Planning purchases or reviewing cash flow after the Budget? Get in touch and we can explore funding options together.