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From managing tax debt to certainty about the instant asset write-off scheme, there’s plenty for dental practices to know at the end of this financial year. By Angela Tufvesson
The Australian tax system is complex—and constantly evolving. As a new financial year approaches, it’s time to get to grips with the changes set to impact dental practices come July. Across the board, advisers say common themes include tighter compliance, greater cashflow pressure and the need for earlier tax planning ahead of key deadlines.
For practice owners juggling clinical work with the realities of running a business, understanding these adjustments is critical to avoiding surprises and making smarter tax decisions in the new financial year.
Payday super
As far as changes to payroll go, this one’s a biggie. From 1 July, practices must pay employees’ super—12 per cent of earnings—to their super fund on payday, at the same time as their salary. The funds must be received by the super fund within seven business days.
Previously, super could be paid as infrequently as quarterly, with payments received by the super fund within 28 days. The changes are designed to help workers grow their super and reduce the amount of unpaid super.
Jonathan Neck, director of dental and medical accountancy specialist Amalgam Advisors, recommends practices set up systems to make these payments automatic so they’re not missed. “You should be able to hit a button, and it will automatically deduct the money out of your bank account,” he says, noting that the Small Business Superannuation Clearing House will be closed from 1 July and practices will need to switch to an alternative super clearing house or payroll solution.
The shift has important knock-on effects for cashflow. “Cashflow is super important now, and practices need to put away sufficient funds for each pay cycle, whether it’s weekly, fortnightly or monthly,” Keegan Du Preez, senior accountant at ECOVIS Clark Jacobs, says. The company specialises in the healthcare sector.
New AML/CTF laws
Changes to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws—which aim to prevent the misuse of legitimate businesses for activities like money laundering and organised crime—might seem worlds away from a suburban or small-town dental practice. But the second phase of these changes, to be introduced on 1 July, means accountants will have additional obligations when providing certain services to dental practices.
“We’re going to be asking a lot more personal and intimate questions of anybody who needs to do anything relating to setting up a business,” Neck explains. He believes practice owners with family members living overseas who are beneficiaries of trusts may run into trouble. “There’s another level of questions that’s going to be asked because we need to be able to convince ourselves that the money is going to a legitimate person,” Neck says.
We’ve seen quite a lot of clients refinancing or seeking alternative ways to pay off their debt while still keeping the interest deductible, which can improve their overall tax position.
Keegan Du Preez, senior accountant, ECOVIS Clark Jacobs
“How we do that… we’re not entirely sure what the government is expecting of us. That is going to be the big find-out come July 1.”
Tax debt interest
Since 1 July 2025, interest charged to businesses on overdue tax debts by the ATO is no longer deductible. This means the interest cost can no longer be claimed as a tax deduction, making ATO debt more expensive to carry.
With the first full year under the new rules now complete, it’s a key planning point ahead of the new financial year. Du Preez says dental practices may instead consider taking out separate debt like a line of credit or refinancing an investment property to pay off ATO debt, where the interest may still be tax deductible depending on how the borrowing is structured.
“We’ve seen many clients refinancing or seeking alternative ways to pay off their debt while still keeping the interest deductible, which can improve their overall tax position,” he notes.
Contractor versus employee
The ATO is continuing to target worker agreements to make sure people hired as independent contractors aren’t being treated as employees. “This one is the gift that keeps on giving,” Neck says. He recommends practices review all contractor arrangements carefully and seek advice if there is any uncertainty around classification.
“This issue has been going on for ages. It’s slowly coming to a crunch now and we’ll hopefully be able to figure out what’s going on.”
He also advises practices approaching their state or territory’s payroll tax threshold—the wage total that triggers mandatory registration—to speak with an accountant. “If you’re starting to approach the payroll tax threshold, talk to your accountant because there are potentially ways we can mitigate some of that,” Neck says.
Instant asset write-off
Prior to the Budget in May there had been no official word from the ATO. On Budget Night it was announced the $20,000 instant asset write-off scheme—which allows small businesses to immediately deduct the full cost of eligible assets costing less than $20,000 and was extended for another year to 30 June—is going to continue permanently.
Nonetheless, dental practices may consider bringing forward any planned equipment purchases before 30 June to take advantage of the write-off rules. However, given the uncertainties in the current economic environment, De Preez advises against upgrading equipment unnecessarily. “Buy assets only if you really need them for your practice. Especially now, it’s important to be smart with what you’re buying,” he says.
