Practice Update – June 2024

Lowe Lippmann Chartered Accountants

Year-end tax checklists for Individuals and Businesses


We have recently prepared two Year End Checklists which help explain some common strategies that may be considered for Individual and Businesses taxpayers.


ATO's three focus areas this tax time


The ATO will be taking a close look this 'tax time' at the following common errors made by taxpayers:

 

Work related expenses: Taxpayers using the 'revised fixed rate method' of calculating a working from home deduction must have comprehensive records to substantiate their claims, including records that show the actual number of hours they worked from home, and the additional running costs they incurred to claim a deduction.


Rental properties: Performing general repairs and maintenance on a rental property can be claimed as an immediate deduction. However, expenses which are capital in nature (such as initial repairs on a newly purchased property) are not deductible as repairs or maintenance.

 

Failing to include all income in tax return: The ATO warns taxpayers against rushing to lodge their tax return on 1 July. If they have received income from multiple sources, they need to wait until this is pre-filled in their tax return before lodging.

End of financial year obligations for employers


The ATO reminds employers they need to keep on top of their payroll governance. This includes:

  • using their tax and super software to record the amounts they pay;
  • withholding the right amount of tax; and
  • calculating superannuation guarantee (SG) correctly.


As 30 June gets closer, employers should check their reporting obligations, along with any upcoming key dates, including for:

  • PAYG withholding — From 1 July, the individual income tax rate thresholds and tax tables will change, which will impact their PAYG withholding for the 2025 tax year;
  • SG rate change — From 1 July, the SG rate will increase to 11.5%. Employers must pay their SG contributions by 28 July in full, on time and to the right fund; and
  • Single touch payroll (STP) reporting — Employers should remember to make STP finalisation declarations by 14 July for all employees the employer has paid during the financial year, and also check their employees' year-to-date amounts are correct.

Getting trust distributions right


As trustees prepare for year-end distributions, they should do the following:

  • review the relevant trust deed to ensure they are making decisions consistent with the terms of the deed;
  • consider who the intended beneficiaries are and their entitlement to income and capital under the trust deed;
  • notify beneficiaries of their entitlements, so that the beneficiaries can correctly report distributions in their tax returns;
  • consider whether the trust has any capital gains or franked distributions they would like to stream to beneficiaries; and
  • check any requirements under the trust deed governing the making of trustee resolutions (ie. that the resolution must be in writing). In any case, resolutions regarding distributions need to be made by the end of the income year.



If you need any assistance in relation to your trust distributions, please contact our office.

Support available for businesses experiencing difficulties


By paying their tax bill in full and on time, taxpayers can avoid paying the general interest charge (GIC), which is currently 11.34%, and which accrues daily for any overdue debts.


The ATO advises taxpayers that, if their business is dealing with financial difficulties, there are some options to help make their tax bill "less taxing".


Taxpayers who are struggling to pay in full or on time may be eligible to set up a payment plan. If they owe $200,000 or less, they may be able to do this themselves using online services. If they cannot do so, or they owe more than $200,000, they can contact the ATO to discuss their options.


Taxpayers can ask the ATO to remit their GIC. The ATO will then consider whether the tax bill was paid late because of circumstances that were:

  • beyond the taxpayer's control, and what steps the taxpayer took to relieve the effects of those circumstances; or
  • within the taxpayer's control, but led to results that the taxpayer could not foresee.

Minimum yearly repayments on Division 7A loans


To avoid an unfranked dividend under the Division 7A rules, loans from a private company to its shareholders or their associates must be either repaid in full or be covered by a 'Division 7A complying loan agreement' before the company's lodgment day.


Complying loan agreements require minimum yearly repayments (MYRs) comprising of interest and principal to be made each year, starting from the income year after the loan is made.


Taxpayers must ensure they can meet the required MYRs on complying loans. 


If they miss the MYR or do not pay enough in an income year, the shortfall may be treated as an unfranked dividend.


Note also that borrowing additional amounts from the same company, directly or indirectly, to make repayments on complying loans may result in the repayment not being taken into account in working out if the MYR has been made.


When making MYRs, borrowers need to:

  • start repayments in the income year after the complying loan was made;
  • use the correct benchmark interest rate (8.27% for the 2024 income year) to calculate the MYR for the current year; and
  • make the required payments on the loan by the due date — the end of the income year (ie. usually by 30 June).

ATO issues notice of crypto assets data-matching program


The ATO has advised that it will acquire account identification and transaction data from crypto designated service providers for the 2024 to 2026 income years.


This data will include the following:

  • client identification details (names, addresses, dates of birth, phone numbers, social media accounts and email addresses); and
  • transaction details (bank account details, wallet addresses, transaction dates, transaction times, transaction types, deposits, withdrawals, transaction quantities and coin types).



The ATO estimates that records relating to approximately 700,000 to 1,200,000 individuals and entities will be obtained each financial year.


The data will be acquired and matched to ATO systems to identify and treat clients who failed to report a disposal of crypto assets in their income tax return.


Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

Liability limited by a scheme approved under Professional Standards Legislation


Practice Update – May 2026

May 4, 2026
Special Topic: Payday Super changes apply from 1 July 2026, act now to be prepared! The ATO has issued further guidance on Payday Super changes that apply from 1 July 2026. In particular, the ATO released a ‘Payday Super checklist for Employers’ ( click here ), which is a good summary of the tasks that should be completed before 1 July 2026, and now is the time to act. Understanding ‘qualifying earnings’ From 1 July 2026, employers will calculate super using ‘qualifying earnings’ ( QE ) instead of the current ‘ordinary time earnings’ ( OTE ). For many employers, the new concept of QE is broader than OTE, but it should not change the amount they need to pay for their employees. However, it may require updates to payroll software configuration and reporting. Employers should review and prepare to correctly map pay codes now to meet reporting obligations and ensure readiness when their updated payroll software is available. QE include the following payments: OTE (ie. payments for ordinary hours of work), including certain types of paid leave, allowances, bonuses and lump sum payments. There are no changes to what payments are considered OTE under Payday Super. For a full list of payments which are included within OTE – click here . All commissions paid to an employee. Salary sacrifice amounts that would qualify as QE had they not been sacrificed to superannuation. Earnings paid to workers who fall under the expanded definition of employee, including payments to independent contractors paid mainly for their labour. Some payments may fall into more than one category of QE, such as commissions, and those payments are covered only once to the extent of the overlap in categories. The total QE for a pay period is determined by aggregating all qualifying payments made to or for an employee on the relevant day, forming the basis for calculating superannuation guarantee ( SG ) contributions. Each payday, employers will need to report both year-to-date QE and superannuation liability for each employee through Single Touch Payroll ( STP ). Employers should confirm their updated payroll software has this reporting functionality built in. Understanding new timing requirements for super contributions From 1 July, employers are responsible for ensuring that super contributions reach super funds within 7 business days of the relevant payday , calculated on the QE amount. Super funds will have 3 business days (down from 20 days) to allocate or return contributions that cannot be allocated. There is currently no obligation for the Super fund to confirm that an employee contribution has been allocated successfully, however if 3 days have elapsed we can accept that the employee contribution has been processed correctly. A super payment only counts once it is received by the employee’s superannuation fund, not when it is submitted. Submitting on day seven may not allow enough time, and we note there is no extension for rejected payments - so employers must ensure there is enough time to correct any errors and for SG contributions to reach funds within the 7 business days. Understanding importance of testing payroll software before 1 July 2026 Prepare now, review your payroll system readiness, engage with payroll software providers and ensure the functionality for these new changes will be supported. It has been widely suggested that new payroll software functionality is tested and everything is running smoothly before 1 July. Note that super payments for pay cycles in July 2026 may be due before your final quarterly super payment is due on 28 July 2026 (ie. for the June 2026 quarter, being April to June). Contributions received on or before 28 July 2026 will reduce any super owing for the June 2026 quarter first . If there is any remainder, contributions will then be used under Payday Super. If you pay on time for the June 2026 quarter and Payday Super you do not risk incurring penalties. The ATO has provided an example of this issue ( click here ), and explains that if the employer pays the correct amount for the June 2026 quarterly payments and the first Payday Super payment (ie. for the first pay cycle in July, which could be weekly or fortnightly) is paid in full both contributions will be made on time. Understanding cash flow pressure Employers may have multiple super payments due during July 2026, including: super payments for each Payday (after 1 July 2026); plus the final quarterly super payment due 28 July, for June 2026 quarter (ie. April to June). Employers should review their expected pay cycles for July 2026 to understand the impacts of paying super each payday after 1 July 2026. Employers may consider setting aside additional funds to make sure they can meet their obligations. If cashflow permits, employers can pay the June 2026 quarter super on or before the first payday in July (ie. the first pay cycle in July, which could be weekly or fortnightly). If an employer can do this, your business will have: a more seamless changeover to the Payday Super system; and time to correct any rejected payments before the 28 July deadline. We recommend that all employers take actions as soon as possible to be best prepared for the Payday Super changes coming in from 1 July 2026. If you require assistance, please contact your Lowe Lippmann representative.

Practice Update – April 2026

April 12, 2026
Know when a new logbook is required Keeping a car logbook may be required to accurately calculate the business-use percentage of vehicle expenses (ie. fuel, registration, insurance and depreciation) for tax deductions. Taxpayers can keep the same logbook for their car for five years, but there are circumstances where they may need a new one during that period. Relying on a logbook that no longer represents a client's work-related travel may result in them claiming more, or less, than they are entitled to. A new logbook may be required when a taxpayer: moves to a new house or workplace — updating their residential or work address may then be necessary; or has changes to their pattern of use of the car for work purposes — checking that they are still doing the same role and routine may then be necessary. Taxpayers using the logbook method for two or more cars need to keep a logbook for each car and make sure they cover the same period. Clients who purchase a new car during the income year and want to continue relying on their previous car's logbook must make a nomination in writing. The nomination must be made before they lodge their tax return and state: they are replacing their original car with a new car; and the date that nomination takes effect. Taxpayers should remember that, if their employer provides them with a car or they salary sacrifice a car using a novated lease, they are not entitled to claim work-related car expenses using the logbook or cents per kilometre method, as they do not own the car. When claiming car expenses using the logbook method, taxpayers also need to keep various types of other records, including (among other things) odometer records for the start and end of the period they own the car, proof of purchase price, decline in value calculations, and fuel and oil receipts (or records of a reasonable estimate of these expenses based on odometer readings).

Practice Update – March 2026

March 2, 2026
$20,000 instant asset write-off extended The Government recently passed legislation to extend the $20,000 instant asset write-off for small businesses by 12 months to 30 June 2026. Taxpayers should note that if their business has an aggregated annual turnover of less than $10 million, they may be able to use the instant asset write-off ( IAWO ) to immediately deduct the business portion of the cost of eligible assets which cost less than $20,000. Eligible assets must basically have been first used (or installed ready for use) between 1 July 2025 and 30 June 2026. The $20,000 limit applies on a per asset basis, so taxpayers can instantly write-off multiple assets. The IAWO can be used for both new and second-hand assets (but some exclusions and limits apply).
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