Q1 FY26 wrap: What’s changed (and what to fix) in your tax & compliance plan

by | Oct 24, 2025 | Accounting News, Blog, Small Business News, Tax Advice and Updates

Q1 FY26 is over: what’s changed and what to fix now

With the first quarter done, it’s the perfect moment to tighten cash flow, update assumptions and correct any gaps before they snowball. Here’s your Q1→Q2 checklist.

1) Payroll & super: operational updates you can’t ignore

  • Payday Super still starts 1 July 2026. Build run-rate cash buffers and test payroll workflows now.

  • SBSCH gates narrowed from 1 Oct 2025. The ATO’s Small Business Superannuation Clearing House no longer accepts new registrations (existing users only) and will close from 1 July 2026. If you planned to join in Q2, you’ll need an alternative super clearing solution. 
  • SG rate is now 12% for payments from 1 July 2025—ensure systems, awards and accruals reflect the higher minimum. 

Action:
 Update payroll calendars to pay super earlier each cycle (allow 5–10 days for clearing houses). Re-test cash flow with SG @ 12% and super paid earlier.

2) Deductions & interest: status check after Q1

  • $20,000 instant asset write-off to 30 June 2026 is still a Bill (not law yet). The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 remains “Before Reps” as of early October. Treat the write-off extension as proposed only and avoid assuming eligibility for assets first used/installed in FY26 until passed. 

  • GIC/SIC now non-deductible from 1 July 2025. The change has passed; only pre-1 July 2025 interest remains deductible. Forecast and prevent interest rather than trying to deduct it. 

Action:
 Stress-test capex timing without relying on the write-off. Stand up payment plans early to avoid non-deductible GIC/SIC.

3) Trusts: Section 100A and Bendel (UPEs)

  • Bendel: The Full Federal Court held UPEs to corporates aren’t Div 7A loans; the High Court granted special leave and the ATO is maintaining TD 2022/11 pending appeal. Keep treating UPEs conservatively.
  • Section 100A: ATO compliance approach in PCG 2022/2 remains in force—documentation and genuine beneficiary benefit are key.

Action:
 Reconcile Q1 distributions, ensure paper trails match economic benefit, and set a Q2 remediation plan for any risky UPEs.

4) Property deals: FRCGW settings now in force

  • FRCGW is 15% with no threshold for contracts from 1 Jan 2025. Residents still need clearance certificates; non-residents should consider a variation where losses apply.

Action:
 Bake FRCGW steps into your sale checklists before exchange to avoid settlement issues.

5) Super & retirement settings (for owners/directors)

  • Transfer Balance Cap is $2.0m from 1 July 2025. Revisit pension start timing and contribution strategy for FY26. 

6) Other ATO hotspots to clean up in Q2

  • Car depreciation cap (FY26): $69,674. Don’t over-claim; logbook method rules still apply.

WFH, rentals, crypto, GST invoices: Substantiation drives outcomes—tighten Q1 records now to avoid year-end fixes.

Q1→Q2 action list 

  • Bring super cut-off forward each pay cycle (allow 5–10 days transit).
  • Confirm SG 12% is live in payroll and contracts.

  • Model capex without assuming the $20k write-off passes; be ready to pivot if/when enacted. 

  • Eliminate GIC/SIC exposure via forecasts and early plans. 

  • Review trust minutes/UPEs for Section 100A and Bendel risk. 

  • Bake FRCGW 15% steps into property deal checklists. 

  • Reconfirm TBC $2m and contribution caps for FY26 planning. 

  • Validate car claims under the $69,674 cap.

NEED HELP?

This article provides general information and should not be considered legal or tax advice. For personalised guidance, please contact our expert team of tax accountants at The Quinn Group by calling 1300 QUINNS (1300 784 667) or +61 2 9223 9166, or submit an online enquiry form to arrange an appointment.