January E News 2026

Welcome to 2026, a year of recalibration as markets stabilise despite "sticky" inflation and a potential February rate hike. This edition covers the impact of a stronger Aussie Dollar on returns, the ATO’s new "leisure facility" rules for holiday homes, and the 2 February fuel tax credit increase. We also highlight SafeWork NSW’s upcoming WHS webinar—offering a $1,000 small business rebate—and the latest community events in the Northern Rivers. As you navigate these shifts and prepare for February's lodgment deadlines, our team is here to ensure you stay compliant and well-positioned for the year ahead.

After years of inflation shocks and rapid rate hikes, the markets are seeing stability gradually return, though investors remain cautious as markets move sideways and "sticky" inflation keeps a potential February RBA hike on the radar. From the surging price of gold and silver to the Aussie Dollar’s impact on international returns, the focus for the months ahead will be on navigating high valuations in Big Tech and the local banking sector while positioning for a period where interest rates may finally peak and ease. A year of transition and recalibration. See more below for the latest market updates.

The ATO is tightening holiday home deductions via draft ruling TR 2025/D1. From 1 July 2026, homes used "mainly" for personal use may be classed as "leisure facilities," making interest, rates, and maintenance non-deductible. To protect your claims, properties must be genuinely available for rent at market rates, especially during peak seasons. Avoid "red flags" like inflated pricing or blocking out holidays for private use. We recommend reviewing your records now to stay compliant; please reach out to our team to discuss how these changes affect your specific tax position.

Fuel tax credit rates will increase on 2 February 2026 due to CPI indexation. To ensure you receive your full entitlement, the ATO recommends using their fuel tax credit calculator, which automatically applies the correct rates and handles complex apportioning. For businesses claiming less than $10,000 annually, simplified methods are available—including using the rate applicable at the end of the BAS period and streamlined record-keeping (like bank statements). Whether you are powering auxiliary equipment or operating heavy vehicles mainly off-road, staying updated on these changes is vital for accurate BAS reporting.

Join SafeWork NSW for a FREE WHS webinar on Thursday, 19 February (11:00 AM – 12:00 PM AEDT) covering essential safety laws, risk management, and psychological health. By attending, small business owners may be eligible for a $1,000 Small Business Rebate. Spaces are limited to one seminar per applicant and filling fast—register now to secure your spot and ensure your business remains compliant.

The Northern Rivers holds regular Community Events.  See what's on and keep up to date on all the fantastic opportunities 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

Welcome to 2026 – A Year of Opportunity and Adjustment

Welcome to 2026. As we move into a new year, it’s clear that the next 12 months will be shaped by a mix of opportunity, transition, and recalibration across economies and investment markets.

After several years defined by inflation shocks, rapid interest rate rises, and geopolitical uncertainty, 2026 is shaping up as a year where stability gradually returns — but not without pockets of volatility. For households and businesses alike, the focus will be on managing cash flow, refinancing decisions, and positioning for longer-term growth as interest rates peak and eventually begin to ease.

Throughout the year ahead, we’ll continue to keep you informed on key tax, economic, and market developments, and what they may mean for your personal or business finances.

Market Review – What Happened Over the Past Month

The past month has seen markets pause after a strong finish to 2025. Global equities have largely moved sideways as investors reassess valuations, interest rate expectations, and earnings growth for the year ahead.

The dominant theme has been caution rather than panic. Investors are increasingly selective, rewarding companies with strong balance sheets, pricing power, and clear earnings visibility, while more speculative assets have seen renewed volatility.

Gold and Silver – Strong Prices, Complex Drivers

Gold and silver continued to attract attention over the past month, with prices remaining elevated by historical standards.

The key drivers behind precious metals strength include:

• Ongoing geopolitical tensions and demand for defensive assets

• Central bank buying, particularly from emerging markets seeking to diversify reserves

• Expectations that global interest rates are close to their peak, which reduces the opportunity cost of holding non-income producing assets

• We also suspect there is some FOMO involved as well?

Big Tech – The Dominant Force of 2025

Large global technology companies were the standout performers of 2025, driven by continued enthusiasm around artificial intelligence, cloud computing, and productivity-enhancing technologies.

Companies such as Apple, Microsoft, Nvidia, Alphabet, and Amazon benefited from:

• Strong balance sheets and cash flows

• Market leadership in AI infrastructure and applications

• Cost discipline following earlier efficiency drives

Entering 2026, the key question is valuation. While earnings growth remains solid, expectations are now high. Markets are increasingly sensitive to any disappointment in earnings, regulation, or capital spending returns. Big tech remains influential, but returns may be more uneven compared to the broad rally seen last year.

We are also witnessing the US dollar weakening against the Australian Dollar which is impacting the international returns by 4% for the last month!

Australian Share Market – Banks and BHP Under the Microscope

Over the past few months, Australian equities have been heavily influenced by movements in the major banks and BHP, given their significant weight in the local market.

The major banks have generally traded within a relatively tight range over the last 6 months. Share prices for Commonwealth Bank, Westpac, NAB and ANZ are expensive relative to their long-term averages. Price-to-earnings multiples have expanded, particularly for Commonwealth Bank, reflecting its market leadership and perceived earnings stability. However, this also leaves less margin for error. Looking into 2026, upside for bank shares is likely to be more limited unless earnings growth reaccelerates. Key risks include rising competition for deposits, pressure on net interest margins as interest rates eventually fall, and any deterioration in credit quality if household stress increases. On the positive side, a soft economic landing and stable unemployment would support loan books and dividends.  Again, a 2025 theme and we are all watching to see where the market moves from here.

BHP has become the ASX darling for the last 2 months with the share price up 23%!! Not much has changed for BHP over this period with respect to reporting/news.  Is this 2025’s version of CBA?  Will be interesting to see if it continues.

Australian Economic Backdrop

The Australian economy continues to slow but has so far avoided a sharp downturn. Inflation has moderated from its peak but remains above the Reserve Bank’s long-term target range. Services inflation and housing-related costs remain sticky.

The labour market is gradually cooling. While unemployment remains relatively low, job vacancies have declined and wage growth is stabilising. This easing in employment conditions is a key factor the RBA is monitoring closely.

Interest rates are expected to remain on hold in the early part of 2026, with some parts of the market thinking a rate rise as early as Feb. 

Here are the returns for January:

ATO Alert: New Rules for Holiday Home Tax Deductions

The ATO is moving to tighten the belt on holiday home tax claims. On 12 November 2025, a new draft ruling (TR 2025/D1) was proposed to replace the long-standing IT 2167. This change could significantly impact your ability to claim deductions on your getaway property.

The "Leisure Facility" Trap

From 1 July 2026, the ATO proposes to classify holiday homes that are “mainly” used for personal purposes as “leisure facilities.” If your property falls into this category, holding costs—including mortgage interest, insurance, council rates, and maintenance—will become non-deductible. To keep your deductions, you must now prove the property is "mainly" used for income generation.

What Will Trigger an Audit?

CA ANZ has warned that the ATO will be looking closely at properties in seasonal hotspots (like ski lodges or beach houses). You may be at risk of losing your deductions if:

• The property is unavailable for rent during peak seasons (Christmas, Easter, school holidays).

• The rental price is set well above market rates to discourage bookings.

• You restrict access to certain parts of the house for guests.

• You rent to family or friends at a “mates rates” discount.

• You impose restrictive rules like "no children" or "references required" for short stays.

Protecting your deductions

CA ANZ tax leader Susan Franks emphasises that it is essential for owners to ensure their homes are genuinely available for rent. To stay on the right side of the law, you should:

1. Review your peak-season availability.

2. Set fair, market-based rental rates.

3. Keep meticulous records of all rental activity and attempts to find guests.

Expert Advice: These changes are complex. We recommend speaking with one of our team as soon as possible to understand how TR 2025/D1 affects your specific tax affairs.

Source and credit: AccountantsDaily.com.au

Fuel tax credit rates increases on 2 February 2026. Applying the correct rate is essential to ensure you receive your full entitlement and avoid errors.

The easiest way to get it right is to use the ATO's fuel tax credit calculator. It applies the correct rates automatically, calculates your credits, and supports simplified methods for claims under $10,000.

When completing your BAS, remember to:

• check you’re apportioning correctly, separate fuel used on and off public roads or to power auxiliary equipment, so you can claim correctly

• keep clear records of your fuel purchases and how fuel is used in your business.

Simplified methods for claims less than $10,000 each year

If you claim less than $10,000 in fuel tax credits each year, you can use one or more of the following simplified methods:

• Basic method for heavy vehicles

• Use the rate that applies at the end of the BAS period

• Work out your litres

• Simplified record keeping

You can choose to use or stop using these methods at any time.

Basic method for heavy vehicles

You can use the basic method for heavy vehicles to calculate fuel tax credits for diesel used in heavy vehicles.

This method makes it easier to work out your on and off public road use. All you need is the distance you’ve travelled on public roads and the amount of eligible diesel you've acquired for use in the heavy vehicle for the tax period to use the method.

You can use this method for all diesel acquired on or after 1 October 2020.

Use the rate that applies at the end of the BAS period

When there is a change of rate during the business activity statement (BAS) period (for example, in February and August), you can calculate your fuel tax credit claim by using the rate that applies at the end of the period.

You don't need to split your fuel purchases during the period and use two different rates. Simply total your litres for the period and use the rate that is current on the last day of the BAS period to work out your claim.

You can use this method for all BAS periods ending on or after 31 March 2016.

See also:

• Fuel tax credit calculator

• Rates – business

Work out your litres

To work out the quantity of fuel you purchased in a tax period, you can simply use the total cost of fuel you purchased in the BAS period, divided by the average price per litre for the BAS period.

Calculate your litres by:

• Litres = total cost of fuel purchased ÷ average price of fuel

You can use this method for all BAS periods ending on or after 31 March 2016.

Simplified record keeping

You can use the following records to substantiate claims of less than $10,000 per year:

• Contractor statements – where an amount for fuel used in the performance of services is deducted from the amount payable for the services.

• Financial institution statements (such as business or personal credit or debit accounts) – where only the dollar amount is displayed on the statement.

• Point-of-sale dockets – where the docket either does not itemise the quantity of fuel dispensed or the quantity is illegible.

• Fuel supplier statements or invoices – where only the dollar amount is displayed on the statement.

You can use these records if you can:

• show the quantity of fuel was used in your business during the period, for example by reference to the type of vehicles and equipment used in the business

• reasonably demonstrate (if the relevant record is lost) by reference to records from prior or later periods, the quantity of fuel was used in your business.

You can use this method for all your past and future BAS periods.

If you are a farmer impacted by a natural disaster, and you do not have records to substantiate your claims, visit reconstructing your tax records for further information.

Simplified methods for all claims

No matter how much you claim in fuel tax credits each year, you can use the following methods to simplify the apportionment of fuel:

• heavy vehicles used mainly off public roads

• fuel used to power auxiliary equipment.

Heavy vehicles used mainly off public roads

If your vehicle is on the list of heavy vehicles the ATO consider are used mainly off public roads (for example, a harvester or backhoe) you no longer need to apportion on and off-road travel when calculating your fuel tax credit claim.

You can claim all fuel used in these vehicles at the 'all other business uses' rate, even if you sometimes drive the vehicle on a public road.

Fuel used to power auxiliary equipment

If you use fuel to power the auxiliary equipment of a heavy vehicle (for example, a concrete mixing barrel or elevated work platform) you can use a percentage that the ATO have set to work out how much fuel is used for powering this equipment.

If you use these percentages you won't need to do a separate calculation for fuel used while the vehicle is off public roads (such as for idling or propelling the vehicle and use of auxiliary equipment). The percentage you use to work out your fuel tax credits will cover this use. You also won't need to do complex calculations or sample testing when you use this method.

Source and credit: ATO.gov.au

FREE WEBINAR Thursday 19 February 2026, 11:00 AM - 12:00 PM (AEDT)

Where

Online.

When

Thursday, 19 February 2026, 11.00 am - 12:00 pm (AEDT).

The Presenter

SafeWork NSW

About this event

During the seminar, SafeWork NSW Inspectors will provide an introductory overview to workplace health and safety, your rights and responsibilities, risk management and WHS topics including:

• small business rebate program

• work health and safety laws

• risk management

• training

• general electrical safety

• traffic management

• first aid and emergency planning

• hazardous noise

• remote or isolated work

• plant

• hazardous manual tasks

• hot working environments

• working at heights

• psychological health.

Spaces are limited so register now.

By attending this event you may be eligible for the $1,000 Small Business Rebate.

Due to high demand, applicants for the Small Business Rebate can sign up for only one seminar. This keeps access fair for everyone.

To register your interest click the link below.

Source and credit: Business.gov.au

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

Byron Bay Community Market next date is Sunday, 1 February | 8:00 AM to 2:00 PM

The Byron Bay Community market is held from 8:00 am to 2:00 pm on the 1st Sunday of every month.

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

From Sunday 6 July the market will be temporarily relocated to the Main Beach Foreshore, while drainage work is carried out.

Location: Main Beach Foreshore, Bay Street, Byron Bay

New Brighton Farmers Market dates on Tuesday's, 3, 10, 17 & 24 February | 8:00 AM to 11:00 AM

New Brighton Farmers Market was established by the North Byron Farmers Market Association in 2007.

The aim was to create a local food economy; to give the local community access to farm fresh produce and to support local farmers and producers. The Association also wanted to create a meeting place in which to grow and strengthen community.

New Brighton Farmers Market has received overwhelming support from day one, with loyal customers returning consistently week after week. The market now hosts approximately 30 farmer and producer stalls each Tuesday.

The market is held from 8:00 am to 11:00 am every Tuesday.

Location: Tom Kendall Oval, Park Street, New Brighton

Byron Bay Farmers Market dates on Thursday's, 5, 12, 19 & 26  February | 7:00 AM to 11:00 AM

The Byron Bay Farmers Market was started in 2002 by a handful of local farmers who wanted to be able to sell their produce directly to the public, in the process reducing food miles and ensuring their small farms remained viable

Over the past 20 years, Byron Farmers Market has grown from half a dozen stalls to over 70 stalls – all offering the freshest locally grown produce every Thursday morning at Butler Street Reserve in Byron Bay.

Farmers supply everything from seasonal fruit and vegetables, pasture-raised meat and eggs, artisan cheese and bread, seafood, pasta, rice, nuts, honey, flowers and more!

The market is held from 7:00 am to 11:00 am every Thursday.

Location:  Butler Street Reserve, Butler Street, Byron Bay

Mullumbimby Farmers Market dates on Friday's 6, 13, 20 & 27 February | 7:00 AM to 11:00 AM

The Mullumbimby Farmers Market is held every Friday morning from 7:00 am to 11:00 am.

Established in 1989, the Mullumbimby market is more than just a place to shop. It's a vibrant community gathering with live music, delicious food, and a diverse range of local stalls. From artisan goods to eco-products, there's something for everyone. Enjoy the friendly atmosphere and unique finds at this market.

At times the day may be moved to another date due to public holidays or other events at the showground. Check the Mullumbimby Farmers Market website for updates.

Location: The Mullum Showgrounds, Main Arm Road, Mullumbimby

Upcycled Sewing and Craft Sessions 2026 dates on Friday's, 6, 13, 20 & 27 February I 11:00 AM to 2:00 PM

Come along to an upcycled sewing and craft session.

Sessions will be running every Friday at The Re-Market (Tip Shop) from now until the end of the year (excluding Good Friday - Friday 3 April).

These friendly, no-pressure drop-in sessions are a great chance to:

• Fix and mend your favourite pieces

• Upcycle clothing or fabric finds

• Learn simple sewing skills.

No experience needed. Just come along, learn skills, share skills and enjoy some hands-on creativity using upcycled materials.

All ages and abilities welcome.

Maximum of seven people per session.

Location: The Re-Market, Byron Resource Recovery Centre, 115 The Manse Road, Myocum

Brunswick Heads Community Market next date is Saturday, 7 February | 8:00 AM to 2:00 PM

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

Located on the riverbank, this market features a variety of stalls with local and imported goods, including handmade products, fresh produce, plants, food, and clothing.

Visitors can find artisanal goods, grab a coffee or hot food, and enjoy the riverside location. 

Location: Memorial Park, 11 Fawcett Street, Brunswick Heads

Welcome Neighbour - Byron event for new Landholders date is Thursday, 12 February | 5:30 PM to 7:00 PM

Join us for a free BBQ at Coorabell Hall this February. Featuring local produce and stories from Zentveld's Coffee.

It's a great chance to meet your neighbours, connect with local rural services and learn more about caring for your land with good biosecurity and land management practices! 

Register

Please register your attendance at Welcome Neighbour - Byron Event

Location: Coorabell Hall, 565 Coolamon Scenic Drive, Coorabell

Federal Community Market next date is Sunday, 15 February | 8:00 AM to 2:00 PM

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

The market has been able to restart following the completion of Federal Drive, that has been closed for over two years following the devastating 2022 floods. It has over 30 stalls, local vendors and a coffee cart.

This is a beloved community where the Federal Market has long been a cherished event with a vibrant atmosphere, offering the community a chance to come together, enjoying the music from our locally-based musicians.

Location: Federal Halls, 466 Federal Drive, Federal

Council Ordinary Meeting next date is Thursday, 19 February | 11:00 AM to 6:00 PM

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: Byron Shire Council Chambers, 70 Station Street, Mullumbimby

Mullumbimby Community Market next date is Saturday, 21 February | 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: 150 Stuart Street, Mullumbimby

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

Key lodgment and payment dates for business

21 February

Activity statements

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

28 February

Activity statements

• Quarter 2 (October–December) activity statements – final date for lodgment and payment, including electronic lodgment.

GST

• Annual GST return or Annual GST information report – final date for lodgment and payment (if required) if you do not have an income tax return lodgment obligation.

PAYG instalments

• Quarter 2 (October–December) instalment notices (forms R and T) – final date for payment, and lodgment if varying the instalment amount.

GST instalments

• Quarter 2 (October–December) instalment notices (forms S and T) – final date for payment, and lodgment if varying the instalment amount.

Income tax

• Lodgment and payment due date for self-preparing entities that were not due at an earlier date

  • if you don't lodge your previous financial year return on time, your income tax return for the current financial is due by 31 October.

• Lodgment and payment due date for medium to large companies (taxable and non-taxable) that are new registrations

  • if you don't lodge your previous financial year return on time, your income tax return for the current financial year is due by 31 October.

• Lodgment due date for medium to large trusts that were non-taxable in the latest year lodged unless required earlier

  • lodgment due date for income tax returns for new registrant trusts unless required earlier

  • if you don't lodge your previous financial year return on time, your income tax return for the current financial year is due by 31 October.

Superannuation

• Lodge and pay quarter 2 (1 October–31 December) 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 – February.

Source and credit: ATO.gov.au