Starting a business in Australia is one of the most exciting decisions an Australian can make. Whether you’re launching a consulting practice, opening a café, starting an eCommerce store, creating a technology startup, investing in property development, or building the next Australian success story, 2026 presents both new opportunities and new tax considerations.
The Australian Federal Budget 2026–27 introduced several significant tax and business measures that could affect how new businesses are structured, funded, and taxed in the future. While some measures are already legislated and others remain proposed, understanding these changes early can help business owners make better decisions from day one.
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In this article, we will explain:
- Key Federal Budget 2026 changes affecting businesses
- The different business structures available in Australia
- How to establish the right structure
- The steps to start a business in Australia
- Common mistakes to avoid
- How SEED PLUS can help you establish your business correctly
Key Federal Budget 2026 Changes for Business Owners
The 2026–27 Federal Budget introduced several measures designed to improve business cash flow, encourage investment, and reform Australia’s tax system.
1. Permanent $20,000 Instant Asset Write-Off
One of the most welcomed announcements for small businesses is the permanent extension of the $20,000 Instant Asset Write-Off.
Eligible businesses with annual turnover below $10 million can immediately deduct eligible assets costing less than $20,000 rather than depreciating them over multiple years.
Examples include:
- Computers and laptops
- Office furniture
- Equipment and tools
- Business vehicles (subject to thresholds and eligibility)
- Technology upgrades
This provides improved cash flow and greater certainty for starting a small business in Australia and investment planning.
2. Tax Loss Carry-Back Returns
The Government has reintroduced loss carry-back provisions for eligible companies.
If a company incurs a tax loss, it may be able to offset that loss against tax paid in previous years and potentially receive a tax refund. This can be particularly valuable for startups and growing businesses investing heavily in expansion.
3. Startup Loss Refundability
A significant proposal for startup founders is the introduction of loss refundability for new startup businesses.
From 2028–29, eligible startups in their first two years may be able to receive refunds for certain tax losses up to the amount of PAYG withholding and fringe benefits tax paid on employee wages.
For founders hiring staff early, this could improve cash flow during critical growth stages.
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4. Proposed 30% Minimum Tax on Discretionary Trusts
One of the most discussed Budget announcements is the proposed minimum 30% tax rate on discretionary trusts from 1 July 2028, subject to legislation and certain exemptions.
Historically, family trusts have been widely used for:
- Asset protection
- Income distribution
- Family investment structures
- Business ownership
The proposed changes could significantly alter how some business owners structure their affairs in the future. The Government has also proposed rollover relief to assist businesses wishing to restructure.
This means new business owners should obtain professional advice before establishing a trust structure.
5. Proposed Capital Gains Tax (CGT) Changes
The Budget also announced proposed reforms to Capital Gains Tax.
The current 50% CGT discount for eligible assets may be replaced by an inflation-based model from July 2027, alongside a minimum tax framework on capital gains. Small business CGT concessions are expected to remain available.
For business owners planning an eventual sale of their business, these changes may influence future tax outcomes and exit strategies.
What Business Structures Can You Choose?
Starting a Business in Australia requires choosing the right structure is one of the most important decisions you’ll make.
The structure you select impacts:
- Tax obligations
- Asset protection
- Compliance requirements
- Ability to raise capital
- Succession planning
- Future growth opportunities
Let’s examine the most common structures.
Sole Trader
A Sole Trader is the simplest and cheapest business structure.
The business and the owner are legally the same entity.
Suitable For
- Freelancers
- Consultants
- Tradespeople
- Small service providers
- Side businesses
Advantages
- Low setup cost
- Simple administration
- Easier tax reporting
- Complete control
Disadvantages
- Unlimited personal liability
- Less tax planning flexibility
- Harder to attract investors
If you’re testing a business idea or operating on a small scale, a Sole Trader structure may be suitable initially.
Company
A company is a separate legal entity registered with ASIC.
Many growing businesses choose a company structure because of its flexibility and protection.
Suitable For
- Growing businesses
- Professional practices
- Technology startups
- eCommerce businesses
- Businesses employing staff
Advantages
- Limited liability protection
- Separate legal entity
- Easier to attract investors
- More professional image
- Potential tax planning opportunities
Disadvantages
- Higher compliance obligations
- ASIC annual fees
- Additional record-keeping requirements
For many startups and growth-focused businesses, a company is often the preferred structure.
Family Trust
A discretionary trust is commonly used for family-owned businesses and investments.
Suitable For
- Family businesses
- Investment structures
- Asset protection strategies
- Wealth accumulation
Advantages
- Asset protection
- Flexible income distribution
- Succession planning benefits
Disadvantages
- Higher setup costs
- More complex administration
- Potential impact from proposed trust tax changes
Given the proposed Budget measures, anyone considering a trust should seek professional advice before proceeding.
Company with Family Trust Ownership
Many successful Australian businesses use a combination structure where:
- A Family Trust owns the shares
- A Company operates the business
This can provide:
- Asset protection
- Flexibility
- Succession planning opportunities
- Future growth options
However, every situation is different and should be assessed individually.
How to Start a Business in Australia
Step 1: Validate Your Business Idea
Before spending money:
- Research your market
- Identify competitors
- Understand customer demand
- Prepare financial forecasts
Step 2: Choose the Right Structure
This decision should consider:
- Expected income
- Family circumstances
- Asset protection needs
- Growth plans
- Future investors
Many costly mistakes occur because business owners choose the wrong structure at the beginning.
Step 3: Register an ABN
Most businesses require an Australian Business Number (ABN).
The ABN identifies your business when dealing with:
- Customers
- Suppliers
- Government agencies
- The ATO
Step 4: Register a Company (If Applicable)
If operating through a company:
- Register with ASIC
- Appoint directors
- Issue shares
- Prepare company registers
- Establish governance procedures
Step 5: Register for GST
GST registration is generally required once turnover exceeds $75,000.
Many businesses voluntarily register earlier.
Step 6: Set Up Accounting Systems
Good bookkeeping should begin immediately.
Recommended systems include:
- Xero
- MYOB
- QuickBooks
Accurate records improve compliance and provide valuable business insights.
Step 7: Open a Business Bank Account
Never mix personal and business finances.
Separate bank accounts simplify:
- Tax reporting
- Bookkeeping
- Cash flow management
- Asset protection
Step 8: Obtain Licences and Insurance
Depending on your industry, you may need:
- Industry licences
- Professional registrations
- Public liability insurance
- Professional indemnity insurance
- Workers compensation insurance
Common Mistakes New Business Owners Make
Many new businesses encounter avoidable issues because they fail to plan properly.
Common mistakes include:
Choosing the Wrong Structure
Changing structures later can be expensive and complicated.
Poor Record Keeping
Inadequate bookkeeping often leads to GST errors, BAS issues, and tax problems.
Ignoring Cash Flow
Profit does not equal cash flow. Many profitable businesses fail because they run out of cash.
Mixing Personal and Business Expenses
This creates compliance risks and bookkeeping complications.
Waiting Too Long for Professional Advice
Early advice is usually far cheaper than fixing problems later.
Why Professional Advice Matters in 2026 when Starting a Business in Australia.
The 2026 Budget demonstrates that tax rules continue to evolve. Proposed trust taxation changes, CGT reforms, startup incentives, and business tax measures may significantly affect the optimal structure for new businesses.
A structure that worked well five years ago may no longer be the most effective option going forward.
Obtaining professional advice before establishing your business can help ensure you start with the right foundation.
Partner with SEED PLUS: Your Growth Catalyst
The prosperity of Melbourne depends directly on the strength of its small businesses. At SEED PLUS, our mission is to eliminate the friction of compliance and financial administration, allowing business owners to focus entirely on what they do best: building exceptional companies.
Whether you are an independent small business looking for robust bookkeeping and tax solutions, or a growing accounting practice seeking to scale your capacity through an outsourced partnership, we have the local expertise and infrastructure to guide you.
Take the Next Step in Your Business Journey
Don’t let tedious bookkeeping and complex tax compliance hold your business back from its true potential. Contact our expert team today to align your financial strategies with sustainable growth.
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How SEED PLUS Can Help
At SEED PLUS, we help entrepreneurs, investors, startups, and small business owners establish their businesses correctly from day one.
Our services include:
Business Structure Advice
We help determine whether a:
- Sole Trader
- Company
- Family Trust
- Company and Trust structure
best suits your circumstances.
Company and Trust Setup
We handle:
- ASIC registrations
- Company incorporations
- Trust establishment
- ABN registrations
- TFN registrations
- GST registrations
Bookkeeping and Accounting
We provide ongoing support with:
- Xero setup
- Bookkeeping
- BAS preparation
- Financial reporting
Tax Planning
We help business owners navigate:
- Tax minimisation strategies
- Business growth planning
- Asset protection considerations
- Future exit planning
Startup Advisory
For founders and growing businesses, we assist with:
- Share structures
- Capital raising preparation
- ESOP planning
- Investor readiness
- Financial forecasting
Starting a business in Australia in 2026 presents exciting opportunities, but the tax and regulatory landscape is changing.
With proposed trust taxation reforms, CGT changes, startup incentives, permanent instant asset write-offs, and new cash-flow support measures, choosing the right structure has never been more important.
Before registering your business, take the time to understand your options and seek professional guidance.
The right structure today can save significant tax, reduce risk, and create a stronger foundation for long-term success.
If you’re ready to start your business, the team at SEED PLUS Accounting & Advisory can help you choose the right structure, complete the registrations, and build a scalable foundation for future growth.
Disclaimer
This blog provides general information only and should not be relied upon as specific advice for your circumstances. Tax and accounting regulations are complex and subject to change. Every business situation is unique, and the right approach depends on your specific circumstances.
Before making any decisions about your PAYG instalments or other tax matters, you should consult with qualified accounting and tax professionals who can assess your individual situation and provide advice tailored to your needs.
The information in this blog is current as of the publication date and is based on Australian Taxation Office guidelines and Australian accounting standards. However, tax laws and regulations change regularly, and you should verify that the information remains current before acting on it.
Get Professional Support
Contact SEED PLUS today! Let’s make your business shine, not just in profits, but in positive impact on the society, environment and economy too.
Contact our office: (03) 6153 0180 to discuss your scenario.
