2021/22 Budget Update

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Individuals

Low and Middle Income Tax Offset extended to 2022

LMITO will be retained for one more income year, so that it will still be available for 2022. Under current legislation, the LMITO was due to be removed from 1 July 2021.

The LMITO will apply as follows for the 2022.

  • $37,000 or less Up to $255
  • $37,001 to $48,000 $255 + 7.5% of excess over $37,000
  • $48,001 to $90,000 $1,080
  • $90,001 to $126,000 $1,080 – 3% of excess over $90,000
  • $126,001 + Nil


Consistent with current arrangements, the LMITO will be applied to reduce the tax payable by
individuals when they lodge their tax returns for the 2022 income year.


Increased Medicare levy low-income thresholds

The Medicare levy low-income thresholds will be increased for singles, families and seniors and pensioners for the 2021 income year, as follows:

  • Singles will be increased from $22,801 to $23,226.
  • Families will be increased from $38,474 to $39,167.
  • Single seniors and pensioners will be increased from $36,056 to $36,705.
  • Seniors and pensioners will be increased from $50,191 to $51,094.


For each dependent child or student, the family income thresholds increase by a further $3,597, up from the previous amount of $3,533.


Update to individual tax residency rules

The individual tax residency rules will be replaced with a new, modernised framework.
The primary test will be a simple ‘bright line’ test – a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.

Individuals who do not meet the primary test will be subject to secondary tests that depend on a
combination of physical presence and measurable, objective criteria. The new framework will be easier to understand and apply in practice, deliver greater certainty, and lower compliance costs for globally mobile individuals and their employers. This measure will have effect from the first income year after the date of Royal Assent of the enabling legislation.


Update to self-education expense deductions

The exclusion of the first $250 of deductions for prescribed courses of education will be removed.
This measure will have effect from the first income year after the date of Royal Assent of the
enabling legislation.


Employee Share Schemes – ‘cessation of employment’ to be removed as a taxing point

The ‘cessation of employment’ will be removed as a taxing point for tax-deferred Employee
Share Schemes (‘ESS’) that are available for all companies. This change will apply to ESS interests issued from the first income year after the date of Royal Assent of the enabling legislation.

Currently, under a tax-deferred ESS, where certain criteria are met, employees may defer tax until
a later tax year (‘the deferred taxing point’). The deferred taxing point is the earliest of:

  • cessation of employment
  • in the case of shares, when there is no risk of forfeiture and no restrictions on disposal
  • in the case of options, when the employee exercises the option and there is no risk of forfeiting the resulting share and no restriction on disposal
  • the maximum period of deferral of 15 years.


This change will remove the ‘cessation of employment’ taxing point and result in tax being deferred until the earliest of the remaining taxing points.


Businesses

Temporary full expensing extension

In the 2020/21 Budget, the Government announced amendments to allow businesses with an aggregated turnover of less than $5 billion to access a new temporary full expensing of eligible depreciating assets until 30 June 2022. In the 2021/22 Federal Budget, the Government has announced that temporary full expensing will be extended by 12 months to allow eligible businesses with aggregated annual turnover of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023. All other elements of temporary full expensing will remain unchanged, including the alternative eligibility test based on total income, which will continue to be available to businesses.


Temporary loss carry-back extension

In the 2020/21 Budget, the Government announced amendments to introduce a temporary loss carry-back measure. Broadly, this initial measure allowed ‘corporate tax entities’ with an aggregated turnover of less than $5 billion to carry back tax losses made in the 2020, 2021 and 2022 income years to claim a refund of tax paid (by way of a tax offset) in relation to the 2019, 2020 and 2021 income years. In the 2021/22 Budget, the Government has announced that the loss carry-back measure will be extended to allow eligible companies with aggregated turnover of less than $5 billion to carry back tax losses from 2023 to offset previously taxed profits as far back as 2019 when they lodge their tax return for the 2023 income year.

The tax refund available under this measure is limited by requiring that the amount carried back is not more than the earlier taxed profits and does not generate a franking account deficit. Companies that do not elect to carry back losses under this measure can still carry losses forward as normal.


Digital economy

The Digital Economy Strategy includes the following:

  • Taxpayers to self-assess the tax effective lives of eligible intangible depreciating assets, such as patents, registered designs, copyrights and in-house software. This measure will apply to assets acquired from 1 July 2023, after the temporary full expensing regime has concluded. The tax effective lives of such assets are currently set by statute.
  • Digital Games Tax Offset to provide a 30% refundable tax offset for qualifying Australian digital games expenditure ongoing from 1 July 2022, with the criteria and definition of qualifying expenditure to be determined through industry consultation.
  • Develop and transition government services to a new, enhanced myGov platform, providing a central place for Australians to find information and services online


Debt recovery for small business

Small business entities with an aggregated turnover of less than $10 million per year to apply to
the Small Business Taxation Division of the Administrative Appeals Tribunal (the ‘Tribunal’) to
pause or modify ATO debt recovery actions, such as garnishee notices and the recovery of general interest charge or related penalties, where the debt is being disputed in the Tribunal.


Tax treatment of qualifying storm and flood grants

Category D grants provided under the Disaster Recovery Funding Arrangements 2018, where those grants relate to the storms and floods in Australia that occurred due to rainfall events between 19 February 2021 and 31 March 2021 to be income tax exempt. These include small business recovery grants of up to $50,000 and primary producer recovery grants of up to $75,000. The grants will be made non-assessable non-exempt income for tax purposes. This is subject to eligibility criteria.


Superannuation


Removing the work test for voluntary contributions

Individuals aged 67 to 74 years (inclusive) to make or receive non-concessional contributions (including under the bring-forward rule) and salary sacrifice contributions without meeting the work test, subject to existing contribution caps. Individuals aged 67 to 74 years (inclusive) will still have to meet the work test to make personal deductible contributions.

The measure will have effect from the start of the first income year after Royal Assent of the
enabling legislation, which the Government expects to have occurred prior to 1 July 2022.
Currently, individuals aged 67 to 74 years (inclusive) can only make voluntary contributions (both
concessional and non-concessional) to their superannuation fund, or receive contributions from
their spouse, if they satisfy the work test (subject to a limited work test exemption). Generally, to
satisfy the work test, an individual must be working for at least 40 hours over a period 30 consecutive days in the income year the relevant contribution is made.


Reducing the age limit for downsizer contributions

The downsizer contributions age will be reduced from 65 to 60.The measure will have effect from the start of the first income year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.The downsizer contribution allows eligible individuals to make a one-off, after-tax contribution to their superannuation fund, of up to $300,000 per person, following the disposal of an eligible dwelling, where certain conditions are satisfied. Under the current requirements, an individual must be at least 65 years of age at the time of making the relevant contribution, for the contribution to qualify as a downsizer contribution.


Removing the $450 per month threshold for Superannuation Guarantee

The current $450 per month minimum income threshold, will be removed. i.e superannuation guarantee applies from the first $1 of wages paid to employees. The measure will have effect from the start of the first income year after Royal Assent of the enabling legislation, which the Government expects to have occurred prior to 1 July 2022.


Relaxing the residency requirements SMSFs

The Government will relax residency requirements for SMSFs and small APRA-regulated funds by:

  • extending the central control and management test safe harbour from two years to five years for SMSFs
  • removing the active member test for both types of funds.

The measure will have effect from the start of the first income year after Royal Assent of the
enabling legislation, which the Government expects to have occurred prior to 1 July 2022.


Exiting legacy retirement products

The Government has announced that it will allow individuals the temporary option to exit and
convert from a specified range of legacy retirement products (together with any associated
reserves) into more flexible and contemporary retirement products, for a two-year period.
The products covered by this measure include market-linked, life-expectancy and lifetime products that were first commenced before 20 September 2007 from any provider (including an SMSF), but not flexi-pension products or a lifetime product in a large APRA-regulated or public sector defined benefit scheme. The measure will have effect from the first income year after the date of Royal Assent of the enabling legislation.

Currently, these products can only be converted into another like product and limits apply to the
allocation of any associated reserves without counting towards an individual’s contribution caps.
This measure will permit full access to all of the product’s underlying capital, including any reserves, as part of transitioning into a more flexible and contemporary retirement product.

Social security and taxation treatment will not be grandfathered for any new products commenced with commuted funds, and the commuted reserves will be taxed as an assessable contribution.


Changes to the First Home Super Saver scheme

The Government has announced that it will make the following changes to the FHSS scheme.

  • The maximum releasable amount of voluntary concessional and non concessional
    contributions under the FHSS scheme to be increased from $30,000 to $50,000. This change will apply from the start of the first income year after Royal Assent of the enabling legislation, which the Government expects will have occurred by 1 July 2022.
  • Four technical changes to the legislation underpinning the FHSS. These four changes will apply retrospectively from 1 July 2018.
  • Increasing the discretion of the Commissioner of Taxation to amend and revoke FHSS scheme applications.
  • Allowing individuals to withdraw or amend their applications before receiving a FHSS scheme amount and allow those who withdraw to re-apply for FHSS scheme releases in the future.
  • Allowing the Commissioner of Taxation to return any released FHSS scheme money to superannuation funds, provided that the money has not yet been released to the individual.
  • Clarifying that the money returned by the Commissioner of Taxation to superannuation funds is treated as a fund’s non-assessable non-exempt income and does not count towards the individual’s contribution caps.

The information provided in this update is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

Crawford News

September 2026 - Update

September 9, 2026
Payday Super and contractors Businesses generally need to pay super where they engage an independent contractor mainly for their labour, personal effort, skills or time. This can apply even if the contractor: has an ABN; invoices the business for their work; or is described as a contractor in a written agreement. It is not mandatory to report payments made to independent contractors through Single Touch Payroll. However, if a business reports them voluntarily, it must meet the STP reporting requirements, including reporting qualifying earnings and super liability information. Where an independent contractor is entitled to super, the contribution must be paid for each payday and reach their super fund within seven business days after payday. Payday Super timeframe Under Payday Super, contributions must be received by an employee’s super fund within seven business days after payday. To keep on track, the ATO recommends that employers: use the new member verification request to verify that an employee’s super fund details are valid and that the fund can accept a contribution before it is made; check with the relevant payroll provider or clearing house that the fund is responding to MVRs; monitor payments, as funds have three business days to allocate or reject a payment; and if a payment is rejected or returned, act quickly to correct any errors and resubmit to the correct fund. For new employees, or where an employee changes their fund, employers generally have 20 business days to make the initial contribution. $21 billion in lost super The ATO is urging individuals to check whether they have lost or unclaimed super, with more than $21 billion waiting to be reunited with its owners. Super can become lost when an account is inactive and the fund cannot contact the member, often following a change of job, address or phone number. In some cases, the balance may be transferred to the ATO to hold until it can be reunited with the individual. The ATO reports that last year, more than $1.1 billion was returned through consolidations and direct payments to eligible individuals. ATO motor vehicle registries data-matching program The ATO acquires motor vehicle registries data from state and territory authorities from the 2026 to the 2030 income years. The information will be matched against ATO records to identify taxpayers who are not meeting their registration, lodgment, reporting, or payment obligations. The data will also be used to support ATO compliance activities through modelling, risk profiling and case selection. The data collected may include identification details for purchasers, sellers and other relevant parties, together with transaction dates and types, sale prices, market values, vehicle garage addresses, intended use, vehicle specifications and registration details. $1,000 deduction for work expenses From 1 July 2026, employees may choose either the standard deduction for work-related expenses of up to $1,000, or a deduction for the actual work-related expenses they incur. You should continue keeping records for deductible work expenses incurred from 1 July 2026. If, at the end of the 2027 income year, you choose to claim actual expenses, you must have the required written evidence for those expenses. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

August 2026 - Update

August 4, 2026
Government extends the $20,000 instant asset write-off The Government has recently introduced legislation to extend the $20,000 instant asset write-off for small businesses. If enacted, the changes would set the instant asset write-off threshold at $20,000 for eligible depreciating assets first used, or installed ready for use, for a taxable purposes from 1 July 2026. The changes would also further suspend the 'lock-out rule' until 30 June 2027. Loss carry back rules to be reintroduced The Government has introduced legislation to re-introduce the loss carry back measure for companies from 1 July 2026. If enacted, this will allow most companies to carry back a tax loss and apply it against tax paid in either, or both, of the previous two income years, basically giving rise to a tax refund for the loss year. New restrictions on LRBAs New legislation imposes restrictions on the use of limited recourse borrowing arrangements by SMSFs. LRBAs entered into on or after 10 August 2026 to purchase real property can now only be used to acquire business real property. These changes do not apply if an SMSF: has already entered into an LRBA to finance a real property acquisition before 10 August 2026; or maintains or refinances that LRBA on or after 10 August 2026. 'Business real property' generally means land and buildings used wholly and exclusively in one or more businesses. Division 7A benchmark interest rate The ATO has published a Division 7A benchmark interest rate of 8.77% for the income year ending 30 June 2027, up from 8.37% for the previous income year. The benchmark interest rate is applied when calculating minimum yearly repayments for complying Division 7A loans. ATO scam warning The ATO has received reports of a new email impersonation scam claiming to be from the ATO. The email states that a phone appointment with the ATO has been scheduled and includes appointment details such as the date and time. The email claims that recipients must open an attachment included in the email to securely access relevant services or reschedule the appointment. The attachment contains a link to a legitimate looking myGov sign-in page designed to steal usernames, passwords and other personal information. The ATO has advised recipients not to respond to the email or interact with it in any way. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

July 2026 - Welcome to the New Financial Year

By Inzi Pethiyagoda • July 5, 2026
Welcome to the start of the new financial year, we sincerely thank you for your support and for partnering with us over the past 12 months. Our team is up to date with the changes to tax rules this year, so it’s time to start thinking about completing your 2026 tax returns. If you have not yet organised your tax appointment, please book an appointment using the link below or get in touch with us asap. https://www.crawfordaccountants.com.au/schedule-an-appointment We conduct appointments at the office, via Zoom or Phone. 03 9853 1000 admin@crawfordaccountants.com.au www.crawfordaccountants.com.au Book Now Are you Audit Safe? The possibility of being selected for an audit or investigation is increasing each year as the Australian Taxation Office (ATO) and other government agencies widen the scope of their investigation activities utilising data collection/detection capacity, data matching and benchmarking/risk profiling. Even if you can substantiate your claim for an allowable deduction, if queried you must still go through the audit process. To alleviate the cost and stress, we have offered you to take out our audit protection and you should have received an offer letter from us few weeks ago. It is a cheap and efficient way of dealing with an ATO audit. For more information, please contact our office. Tax Deductions Tax deductions will help you minimise your tax, but there are three golden rules for tax deductions: Expenses must be related to business/ work and not private. If a portion of the expense if private, the deduction must be apportioned. You must have records to prove the deduction such as receipts The expense must not be reimbursed Pay day super is now active From 1 July 2026, Payday super applies. Employers will need to pay super to an employee’s nominated super fund each payday, and it must reach the fund within 7 business days after the payday. The STP lodgement obligations remain. If you require assistance with the process, please contact our office. Changes to car thresholds from 1 July The car limit for the 2027 income year is $69,883. This is the highest value that a taxpayer can use to calculate depreciation on a car where they use the car for work or business purposes and they first use or lease the car in the 2027 income year. If a taxpayer is buying a car and the price is more than the car limit, the highest input tax (GST) credit they can claim except in certain circumstances is one-eleventh of the car limit. For the 2027 income year, the highest input tax credit they can claim is $6,353. The luxury car tax threshold for the 2027 income year is $91,661 for fuel-efficient vehicles, and $80,809 for all other luxury vehicles. Input tax credits need to be claimed within the four year time limit. A taxpayer cannot claim an input tax credit for luxury car tax when they buy a luxury car, even if they use it for business purposes. Recap – Tax Reforms The Government has recently legislated several of the tax reform measures announced in the 2026 Federal Budget. Replacing the CGT discount with cost base indexation and a 30% minimum tax on gains accruing from 1 July 2027. This applies to pre-CGT assets as well. Increasing the small business turnover threshold for the 50% active asset reduction from $2 million to $10 million. Limiting negative gearing for residential property to new residential dwellings from 1 July 2027. Existing properties are grandfathered. Introducing the Working Australians Tax Offset from 1 July 2027, and the $1,000 instant tax deduction for work-related expenses from 1 July 2026. The Government has also announced further proposed measures, including: A new targeted CGT discount for investors in innovative start-ups. Barring SMSFs from utilising future limited recourse borrowing arrangements to acquire residential property. Exempting income of discretionary testamentary trusts from the minimum tax proposed for trusts. Fuel excise relief extended for July The Government has announced a further temporary extension of fuel excise relief for July, together with a reduction in the Heavy Vehicle Road User Charge and based on the government announcements, these measures will make petrol and diesel 16 cents per litre cheaper than they otherwise would have been during July. Dental clinic liable for super guarantee charge The Administrative Review Tribunal recently considered whether an oral health therapist engaged by a dental clinic was an employee for super guarantee purposes. The clinic argued that the therapist was not an employee but was instead an independent contractor and, as such, the clinic was not liable for the super guarantee charge. The ART held that the therapist was an employee under the extended definition. In particular, the ART found that: the contract contained features consistent with an 'employment' arrangement; the therapist was part of a regulated profession and could not practise independently; the purpose of the contract was to engage the therapist personally to work as a member of an integrated team. the clinic did not establish that she had a genuine right to delegate/subcontract her work. the therapist was not directly rewarded for her services, as her remuneration was subject to adjustments applied by the clinic on patient invoices. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

June 2026 - Update

June 10, 2026
ATO warns of Tax Time misinformation and focus areas ATO is warning the community to be wary of incorrect or misleading information this Tax Time, particularly claims promising greater refunds, shortcuts or hacks. The ATO has reported a rise in tax-related content and tips being shared online and is urging taxpayers to treat unverified advice with caution and seek professional advice. Taxpayers should think twice before acting on information from third-party sources such as artificial intelligence platforms, influencers, or advice from family or friends. Although AI can be a useful tool, it can lead to inaccurate advice: and your tax return isn’t the place for guesswork that could lead to hefty penalties. The ATO also revealed that, this Tax Time, it will be focusing on areas where taxpayers are likely to make errors, including work-related deductions and expenses and properly apportioning such expenses, and omitted income from 'side-hustles', cash jobs, and rental income. Time for Tax Planning The month of June is ideal for businesses and taxpayers to take some time to look at tax minimisation strategies, consider legislative changes including significant changes announced in the recent budget, ensure compliance and review your financial position. Take some time to review that your compliance and tax payment obligations are fulfilled. This will steer you clear from expensive penalties and interest charges and put you in an optimum financial position. Individuals must consider if any voluntary superannuation contributions could assist you minimise tax before 30 June. Employers may pay superannuation guarantee obligations early to take advantage of the deduction during the current financial year. Instant asset write-ff may assist with business assets. Key considerations for small and medium businesses and investors are: Trust distributions and resolutions Dividends from private companies Super contributions Div 7a compliance Tax governance STP requirements TPAR requirements Pensions and TBAR events Preparation for payday super A meeting with your accountant in June for a tax planning session may add value to your overall financial position. Please contact us if you wish to discuss further. 2026 Budget Announcements Summary of the main announcements: Limiting residential property negative gearing to new builds from 2027/28. Existing investments made before 7:30pm AEST on 12 May 2026 are announced to be grandfatherd. Replacing the 50% CGT discount with inflation‑adjusted indexation from 1 July 2027 with a minimum tax rate of 30% on realised capital gains. This will apply to all assets including pre-CGT assets except new builds of residential properties where taxpayers may choose either the old or new rules. Gains accrued on existing investments prior to 1 July 2027 to retain the 50% discount where eligible. Applying a minimum 30% tax on discretionary trusts from 1 July 2028. Individual beneficiaries to be eligible for a non-refundable offset while corporate beneficiaries will not be eligible for any offset. All workers to receive a $ 250 tax offset. $ 1,000 instant tax deduction for work-related expenses. Caution: taxpayers may be eligible for larger deductions using alternative methods. Instant asset write-off for assets below $ 20,000 to continue for small businesses. Two year tax loss carry back to return for companies with turnover below $ 1 billion. Payday Super During July 2026, employers need to pay the June 2026 quarter superannuation guarantee by 28 July and also pay July 2026 superannuation guarantee on paydays. If employers do not finalise their June quarter payments by 28 July 2026, they must lodge a super guarantee charge ('SGC') statement by 28 August and pay the SGC to the ATO for the June quarter. The late payment offset is not available and any super payments received on or after 29 July will be applied under the new Payday Super rules, even if the employer intended these payments to be made for any super owed for the June quarter. From 1 July 2026, employers must calculate, pay and report super guarantee for their employees and eligible contractors on the same day wages are paid. This includes ensuring the money is in their employees super accounts generally within 7 business days after payday. Note that superannuation for pay runs in July may be due before their final quarterly super payment is due on 28 July, but contributions received on or before 28 July will reduce any super owing for the June quarter first. If there is any remainder, contributions will then be used under Payday Super. However, ATO assures employers that pay on time for quarterly and Payday Super that they will not risk incurring penalties. It is prudent to pay June 2026 quarter superannuation as soon as the quarter ends. The ATO Small Business Superannuation Clearing House officially closed The Small Business Superannuation Clearing House will permanently close on 1 July 2026. Therefore, employers still using it have less than a month to transition to an alternative service. If you still use SBSCH, please contact us urgently to organise an alternative service. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

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