April 2025 E News

In this edition, we revisit the rapid rollout of President Trump’s tariff agenda and its growing impact on global trade and local industries. We also cover major updates from the ATO, including the removal of tax deductibility for General Interest Charges from 1 July 2025 and upcoming changes to PAYG withholding cycles. There’s also a free financial reporting webinar for small businesses on 14 May, along with a reminder to check in on upcoming lodgement dates and local community events across the Northern Rivers region.

Just over 100 days into President Donald Trump’s new term, his administration has acted swiftly to implement the aggressive tariff agenda promised on the campaign trail. These changes have already begun to reshape both domestic economic conditions and the global trade environment. While we touched on this in our previous newsletter, the pace and scope of recent developments make it timely to revisit the topic. Across key sectors—including manufacturing, retail, and agriculture—the effects are becoming increasingly visible. We’re seeing early signs of cost pressures, shifting consumer sentiment, and notable moves in the financial markets. International responses are also escalating, with major trading partners enacting retaliatory tariffs and multinational companies rapidly reconfiguring supply chains. In this edition, we break down the evolving impact of these policies, assess the latest data, and outline what to watch as we head deeper into Q2.

The federal government has passed legislation to remove the tax deductibility of General Interest Charges (GIC) and Shortfall Interest Charges (SIC), effective from 1 July 2025. This means interest on overdue tax will no longer reduce taxable income, increasing the cost of late payments. The change has raised concerns among small businesses already managing cash flow challenges. The ATO is expected to issue guidance on how the new rules will apply, including for existing payment plans. Businesses should review their tax position now and seek advice to minimise the impact before the changes take effect.

The ATO is reviewing PAYG withholding cycles and will notify affected businesses during April. Changes will apply from 1 July 2025 if your total annual withholding has increased. Businesses moving to medium withholder status will report and pay monthly. Large withholders (over $1 million annually) must pay within 6–8 days of withholding, using a new PRN. If your status changes, update your payroll software before 1 July. You can request to stay on your current cycle by submitting a form within 21 days of receiving the ATO’s letter.

Join a FREE webinar on Wednesday, 14 May 2025, from 10:00 am to 11:30 am,  on understanding your financial reports.  Presented by Louise Ingoe, a Chartered Accountant with over 15 years’ experience supporting SMEs, this webinar will explore what needs to be included in monthly and quarterly financial reporting, why it matters, and how to navigate key areas like superannuation.  Designed for businesses across the New England, North West and North Coast regions of NSW, the session will be hosted via Microsoft Teams. Places are limited to 50 participants so book your spot today.

The Northern Rivers holds regular Community Events.  See what's on and keep up to date on all the fantastic opportunities available and help to support local.  There is plenty to do. 

A reminder, there are some important lodgement dates to note this month.

The WD Nicholls Team

Trump's expanded tariffs reshape global trade landscape

In the first 100 days since his January inauguration, President Donald Trump has moved swiftly to implement the aggressive tariff policies promised during his campaign. We touched on this in our last newsletter but given the importance I thought it was prudent to see where we are now!

Domestic economic impact

Manufacturing Sector Response

American manufacturers have shown mixed reactions to the expanded tariff regime. Some domestic steel and aluminum producers have reported increased production and hiring as they fill gaps left by more expensive imports. US Steel and Nucor announced plans to reopen previously shuttered facilities in Pennsylvania and Ohio, potentially adding 800-1,000 jobs.

However, downstream manufacturers that rely on these materials as inputs are experiencing significant cost pressures. Auto manufacturers estimate production costs have increased 3-5% due to higher steel and aluminum prices, with Ford and GM both citing tariffs as factors in their Q1 earnings reports.  As of last night, General Motors declined/pulled its forecast of annual earnings due to the tariff uncertainty

Consumer Price Effects

The consumer price index (CPI) has shown modest but measurable increases in categories most affected by tariffs. Household appliances, electronics, and certain food products have seen price increases of 2-4% above normal inflation rates. Retailers like Walmart and Target have begun passing some of these costs to consumers after initially absorbing them.

Consumer Sentiment

The consumer sentiment release last night our time did show the US population is quite concerned, with the data indicating it hasn’t been this low since May 2020.  Sentiment in Australia has also fallen but not to the extent the US has.

Employment and Wage Data

The most recent labor statistics show complex effects:

• Job growth in protected industries: +18,000 (metals, textiles)

• Job losses in import-dependent sectors: -32,000 (retail, consumer goods)

• Net effect on overall unemployment rate: minimal (+0.1%)

• Again, last night we did see UPS cut 20,000 with the view of lower demand/spending

Financial Markets

U.S. stock markets have demonstrated heightened volatility since the implementation of additional tariffs in February:

• S&P 500: Down 3.2% since February tariff announcements

• Sectors showing strength: Domestic manufacturing, defence

• Sectors under pressure: Retail, technology, automotive

• However, since the presidents about face on the more severe tarfiffs the market has rebounded significantly from its low.

International impacts

Retaliatory Measures

Major trading partners have implemented targeted counteractions:

• European Union: 25% tariffs on American agricultural products, motorcycles, and bourbon

• China: Increased tariffs on soybeans, aircraft, and technological equipment

• Canada and Mexico: Selective tariffs despite revised USMCA provisions

Global Supply Chain Disruption

The reconfiguration of global supply chains is accelerating as multinational corporations seek to minimise tariff exposure:

• Vietnam and Malaysia have seen a 22% increase in manufacturing investment

• Mexico has experienced a 15% rise in manufacturing activity along the border region

• Shipping and logistics companies report significant route and volume changes

Looking ahead

 Key Indicators to Watch

• Q2 GDP growth projections: Currently estimated at 1.8%, down from previous 2.3% forecast

• Producer Price Index: Expected to show continued upward pressure

• Consumer confidence measures: Early signs of erosion in spending intentions

Policy Developments on the Horizon

The administration has signalled potential tariff adjustments based on ongoing negotiations with key trading partners. Treasury Secretary has indicated that tariff revenues are being considered for targeted tax relief programs.

Here are the performance numbers for April:

In a move that has sparked widespread debate within the accounting and business communities, the federal government has passed legislation to remove the tax deductibility of General Interest Charges (GIC). The changes will take effect from 1 July 2025, marking a significant policy shift that could have broad implications for individuals and businesses alike.

The GIC is applied by the ATO to unpaid tax debts, accruing daily until the outstanding amount is settled. Until now, these interest charges were fully tax-deductible, offering some relief to businesses and individuals managing tax liabilities. The removal of this deduction means that any interest paid on overdue tax will no longer reduce taxable income, potentially increasing the real cost of late payments.

The government argues that the reform is about restoring balance and fairness in the tax system. According to Treasury, allowing a deduction for penalties tied to non-compliance undermines the integrity of the tax framework. Removing the GIC deduction, they say, will ensure that interest on overdue taxes is treated consistently with other penalties — which are already non-deductible.

However, the accounting profession and small business groups have strongly criticised the move. Many argue that it unfairly targets those already under financial pressure, particularly small and medium enterprises (SMEs), who often struggle with cash flow and may fall behind on tax obligations. Without the benefit of deductibility, the cost of GIC will effectively increase, placing additional strain on businesses trying to recover or stay afloat.

Some practitioners have also warned that the change could reduce cooperation with the ATO, as the financial incentive to enter into payment arrangements is diminished.

While the legislation has now passed, there is likely to be ongoing advocacy and discussion around how these changes are implemented and whether transitional relief measures may be warranted.

What’s Next? Preparing for the GIC Deduction Changes

Now that the removal of tax deductions for General Interest Charges (GIC) and Shortfall Interest Charges (SIC) has passed through Parliament, businesses and individuals should begin preparing for the changes taking effect from 1 July 2025.

Here’s what you need to know:

1. Start Date: 1 July 2025

GIC and SIC incurred before this date remain deductible. Any charges from 1 July 2025 onward will no longer be eligible for a tax deduction. This provides a window for taxpayers to act now to reduce their exposure.

2. ATO Guidance Forthcoming

The ATO is expected to release guidance clarifying:

• How the new rules will apply in practice

• The treatment of existing payment plans

• Whether discretionary remissions will be available in hardship cases

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3. Review Your Payment Arrangements

If you’re on a payment plan with the ATO that extends past 1 July 2025, now is the time to:

• Reassess the plan’s structure

• Aim to clear or reduce debts before the deadline

• Understand the future cost implications without the deduction benefit

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4. Plan Ahead for Tax Liabilities

• Forecast future tax payments and avoid late lodgements

• Adjust your budget or cash flow strategy to stay current with tax obligations

• Engage early with your accountant to minimise potential interest charges

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5. Seek Professional Support

Accountants and tax agents can help:

• Review your current tax position

• Structure repayments for maximum efficiency

• Explore possible GIC/SIC remissions in special circumstances

Key takeaway

Proactive planning before July 2025 can help reduce the financial burden of these changes and ensure a smooth transition when the new rules take effect.

Source and credit: AccountantsDaily.com.au

Each year, the ATO review pay as you go (PAYG) withholding cycles to check if they need to be changed based on your business’s annual withholding amount.

During April, the ATO will be writing to you if your PAYG withholding cycle is going to change. If affected, your reporting and payment obligations will change from 1 July, 2025.

The ATO will change your withholding, reporting and payment cycle if your annual withholding payments in all branches have increased.

Where your annual withholding amount is:

• between $25,000 and $1 million (medium withholder status), you're required to report on your activity statement and pay monthly.

• more than $1 million (large withholder status) you're required to pay electronically within 6–8 days from the day you withheld the amount, such as when you pay staff. You'll get a new Payment Reference Number (PRN) ending in 70 to quote when you pay on the set payment days. You need to check that the withholding amounts you’re paying using your new PRN match the amounts you’ve reported via Single Touch Payroll. You don't need to report PAYG withholding on your activity statements if you report through Single Touch Payroll.

Changing your withholding, reporting and payment cycle

If your withholding status is changing, it’s important that you make the changes to your payroll software before 1 July, 2025 to align your withholding reporting and payments with the new due dates.

You can ask to stay on your existing cycle if you estimate your 2025–26 PAYG withholding amount will be less than the relevant threshold.

To do this, send the ATO a Request to remain on a lower withholding cycle form within 21 days from the issue date of their letter. Provide the reason for your request, outlining your change in circumstances and the estimated amount of withholding in 2025–26.

For more information, visit ATO annual review of PAYG withholding cycles.

Source and credit: ATO.gov.au

FREE WEBINAR Wednesday 14 May 2025, 10:00 AM - 11:30 AM (AEST)

Where

Online.

When

Wednesday 14 May 2025, 10:00 am - 11:30 am (AEST).

The Presenter

Louise Ingoe - Louise is a Chartered Accountant with over 15 years of experience working with a variety of SME clientele on various accounting platforms including; Xero, MYOB and Quickbooks. Her aim is to assist clients reach their full potential by doing what she does best, so they can do what they do best.

About

It is important for business owners to be aware of what needs to be covered in their monthly or quarterly financial reporting.

In this webinar we will cover off the main things and some of the smaller, not so regular things. We’ll discuss why they’re important and what options are available to help navigate them.

Three key learning outcomes

1. What needs to be reported

2. Why it needs to be reported

3. Discussion about Superannuation and other considerations

About this event

This webinar is aimed at small businesses throughout the New England, North West and North Coast regions of NSW who have just started or have an established business. We have the capacity to host up to 50 attendees.

The webinar will take place on MS Teams. You will receive the MS Teams link in an email prior to the workshop (check your spam folder as they often go there). This will be a live online event which will be recorded. The recording and resources will be sent to attendees following the event.

To register your interest click the link below.

Source and credit: Mybusiness.service.nsw.gov.au

We always like to support our locals!  Here are some community events happening this month (in date order)

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Westpac Byron Coastal Charity Walk date on Saturday, 3 May | 6:00 AM to 5:00 PM

The Byron Coastal Charity Walk returns to the stunning coastline from the heart of Byron Bay to the shores of Ballina. This non-competitive social walk offers a choice of 12km, 24km, or 36km picturesque walking routes. Please follow the link for the course map.

This fully supported event raises vital funds for The Westpac Rescue Helicopter Service.

Road closures and traffic impacts

Traffic control will be set up at 3 locations on:

• Lighthouse Road

• Broken Head Reserve Road

This will assist pedestrians to cross the road safely. This may cause minor disruptions to traffic flow.

The walk starts in Dening Park, Byron Bay and walkers can choose from three distances:

• 12km – Byron Bay to Broken Head

• 24km – Byron Bay to Lennox Head

• 36km – Byron Bay to Ballina

For more information and to register please visit the Coastal Charity Walk Website

Location: Dening Park, Lawson Street, Byron Bay

Bangalow Farmers Market dates on Saturday's, 3, 10, 17, 24 and 31 May | 7:00 AM to 11:00 AM

Discover the Heart of Local Food at Bangalow Farmers Market Every Saturday morning from 7:00 am - 11:00 am, the Bangalow Hotel carpark transforms into a vibrant hub of local food. Our farmers offer a bountiful harvest of fresh produce, artisan goods, and more. Meet the farmers, learn about sustainable practices, and support your local community. Visit Bangalow Farmers Market and experience the true essence of local food.

Location: Behind Bangalow Hotel, 1 Byron Street, Bangalow

Byron Bay Community Market next date is Sunday, 4 May | 8:00 AM to 3:00 PM

The Byron Bay Community market is held from 8:00 am to 3:00 pm on the 1st Sunday of every month.

The market hosts an eclectic collection of stalls that showcase what Byron has to offer.

Road closures and traffic changes on market day

• Jonson Street is closed to traffic at the corner of Byron and Marvel Streets from 5am to 5pm.

• Traffic is diverted via Fletcher Street.

• The Lawson Street South carpark is closed from 5am to 5pm.

• There may be traffic delays are on Lawson Street between the Shirley Street and Jonson Street roundabouts between 6am to 8am and 3pm to 5.30pm.

• The railway carpark is open under traffic control via the laneway on Jonson Street.

• Traffic controllers will be in place on market day. 

Location: Byron Bay CBD, Railway Park, Jonson Street, Byron Bay

Council Planning Meeting next date is Thursday, 8 May | 3:00 PM to 9:00 PM

Council Planning meetings are held in the Chambers.  Click here view Council Meetings and Agendas.

If you'd like to speak at a Council Meeting, register for Public Access by visiting Address a Council meeting.

A livestream is available to watch online. 

Questions about the meeting?

• Phone: 02 6626 7000

• Email: council@byron.nsw.gov.au 

Location: Council Chambers, 70 Station Street, Mullumbimby

Mullumbimby Community Market next date is Saturday, 17 May | 8:00 AM to 2:00 PM

The Mullumbimby Community Market is held on the third Saturday of each month from 8:00 am to 2:00 pm.

The market is a vibrant family-friendly festival held in Summers Park. Discover unique treasures among the diverse stalls offering artisan clothing, jewellery, homewares, plants, and more, all while enjoying live music and delicious food. With its warm, welcoming atmosphere and support for the local historical society museum, the Mullumbimby Community Market is a must-visit destination for both locals and visitors.

Location: Corner of Stuarts and Myocum Streets, Mullumbimby

Bangalow Billy Cart Derby date on Sunday, 18 May | 6:00 AM to 5:00 PM

The annual Bangalow Billy Cart Derby is on Sunday 18 May 2025.

Byron Street, Bangalow between Ashton Street and Granuaille Road, will be closed between 6am and 5pm for this event.

Traffic will be diverted along Deacon Street.

Location: Byron Street, Byron Bay

Council Ordinary Meeting next date is Thursday, 22 May | 3:00 PM to 9:00 PM

Council Ordinary meetings are held in the Chambers.  Click here view Council Meetings and Agendas.

If you'd like to speak at a Council Meeting, register for Public Access by visiting Address a Council meeting.

A livestream is available to watch online. 

Questions about the meeting?

• Phone: 02 6626 7051

• Email: councillorsupport@byron.nsw.gov.au 

Location: Council Chambers, 70 Station Street, Mullumbimby

Source and credit: Byron.nsw.gov.au/Recreation-Culture/Events-Venues/Whats-On

Key lodgment and payment dates for business

12 May

Activity statements

• Quarter 3 (January–March) activity statements lodged electronically – final date for lodgment and payment    

  • refer to the two week lodgment concession for information on your eligibility for this later due date.

21 May

Fringe benefits tax (FBT)

• Lodgment due date for your FBT return. For 2025, if you prepare your own return you can lodge by 25 June without incurring late lodgment penalties.

• Final date to pay when you prepare your own FBT return.

• If your tax agent is preparing your FBT return, different dates may apply.

Activity statements

• April monthly activity statements – final date for lodgment and payment.

28 May

Superannuation

• Lodge and pay quarter 3 (1 January–31 March) Superannuation guarantee charge statement – quarterly if you did not pay your contributions on time.

• You can choose to offset contributions you've paid late to a fund for each employee against the super guarantee charge for the quarter for those employees.

• You cannot claim an income tax deduction for the super guarantee charge.

• Key lodgment and payment dates for business – May.

Source and credit: ATO.gov.au