2022/23 Budget Update

Author na1616mewedewd

Individuals
 
Increase to the low and middle income tax offset
 
The Government has announced a once-off $420 ‘cost of living tax offset’ for the 2022 income year, which will be provided in the form of an increase to the existing LMITO. This will increase the maximum LMITO benefit to $1,500 for individuals and $3,000 for couples.
 
Increase to the Medicare levy low-income thresholds
 
The threshold for singles will be increased from $23,226 to $23,365.
The threshold for families will be increased from $39,167 to $39,402.
The threshold for seniors and pensioners will be increased from $36,705 to $36,925.
The threshold for seniors and pensioners families will be increased from $51,094 to $51,401.
 
Tax Deductibility of COVID-19 tests
 
The costs of taking a COVID-19 tests to attend work are tax deductible for individuals from 1 July 2021. Also, FBT will not be incurred by businesses where COVID-19 tests are provided to employees to attend work premises.
 
Businesses
 
Skills and Training Boost
 
The skills and training boost will support small and medium-sized businesses to train and upskill their employees. The boost will apply to eligible expenditure incurred from 7:30pm on 29 March 2022 until 30 June 2024.
 
Small and medium businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online and delivered by entities registered in Australia.
 
For eligible expenditure incurred by 30 June 2022, the boost will be claimed in tax returns for the following income year. For eligible expenditure incurred between 1 July 2022 and 30 June 2024, the boost will be claimed in the income year in which the expenditure is incurred.
 
Technology Investment Boost
 
The technology investment boost will support digital adoption by small and medium-sized businesses. The boost will apply to eligible expenditure incurred from 7:30pm on 29 March 2022 until 30 June 2023.
 
Small and medium businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on business expenses and depreciating assets that support their digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services).
 
An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost. This equates to a maximum additional deduction of $20,000 per eligible year.
 
For eligible expenditure incurred by 30 June 2022, the boost will be claimed in tax returns for the following income year. For eligible expenditure incurred between 1 July 2022 and 30 June 2023, the boost will be claimed in the income year in which the expenditure is incurred.
 
Modernising the PAYG Instalment System
 
Companies will be able to calculate their PAYG instalments based on current financial performance, extracted from business accounting software, with some tax adjustments.
 
New system is anticipated to commence from 1 January 2024.
 
Taxable Payment Annual Reports (TPAR)
 
The Government will provide businesses with the option to report taxable payments on the same lodgment cycle as their activity statements.
New system is anticipated to commence from 1 January 2024.
 
COVID-19 Business Grants are non-assessable non-exempt
 
Payments from certain state and territory COVID-19 business support programs are non-assessable non-exempt income for income tax purposes until 30 June 2022. This measure was originally announced on 13 September 2020.
 
The following state and territory grants are eligible.
 

  • NSW Accommodation and Support Grant
  • NSW Commercial Landlord Hardship Grant
  • NSW Performing Arts Relaunch Package
  • NSW Festival Relaunch Package
  • NSW2022 Small Business Support Program
  • QLD 2021 COVID-19 Business Support Grant
  • SA COVID-19 Tourism and Hospitality Support Grant
  • SA COVID-19 Business Hardship Grant
     

Superannuation
 
Extending the reduction in minimum drawdowns
 
The 50% reduction of superannuation minimum drawdown requirements for account-based pensions and similar products will be extended to 30 June 2023.
 
Based on this change, the reduced minimum pension percentages for ABPs (including TRISs) are set out in the following table for the 2023 income year.
 
Note that, for ABPs and TRISs that commence or cease part-way through the 2023 income year, a pro-rated minimum pension payment applies (unless the pension commenced on or after 1 June 2023, in which case, no minimum pension payment is required).
 

Recipient Ages age        Minimum pension           Reduced Minimum Pension

Under 65                                       4%                                            2%

65 to 74                                         5%                                           2.5%

75 to 79                                         6%                                             3%

80 to 84                                         7%                                           3.5%

85 to 89                                         9%                                          4.5%

90 to 94                                         11%                                           5.5%

95 and above                              14%                                            7%


Other


GDP Uplift factor for PAYG and GST instalments
The GDP uplift factor for PAYG and GST instalments will be set at 2% for 2023.


Expanding access to employee share schemes
Where employers make larger offers in connection with employee share schemes in unlisted companies, participants can invest up to the following amounts:

  • $30,000 per participant per year, accruable for unexercised options for up to five years, plus 70% of dividend and cash bonuses; or
  • any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit.

The Government will also remove regulatory requirements for offers to independent contractors, where they do not have to pay for their interests.
 
Cost of living payment
 
The Government will provide a one-off $250 cost of living payment to help eligible recipients with higher cost of living pressures. The payment will be made in April 2022 to eligible recipients of the following payments and to concession cardholders:
 

  • Age Pension
  • Disability Support Pension
  • Parenting Payment
  • Carer Payment
  • Carer Allowance (if not in receipt of a primary income support payment)
  • Jobseeker Payment
  • Youth Allowance
  • Austudy and Abstudy Living Allowance
  • Double Orphan Pension
  • Special Benefit
  • Farm Household Allowance
  • Pensioner Concession Card holders
  • Commonwealth Seniors Health Card holders
  • Eligible Veterans’ Affairs payment recipients and Veteran Gold cardholders

 
The payments are exempt from tax and will not count as income support for the purposes of any income support payment. A person can only receive one economic support payment, even if they are eligible under two or more categories outlined above. The payment will only be available to Australian residents.
 

Temporary reduction in fuel excise
The Government will help reduce the burden of higher fuel prices by halving the excise and excise-equivalent customs duty rate that applies to petrol and diesel, and all other fuel and petroleum-based products except aviation fuels, for six months. This measure will commence from 12.01am on 30 March 2022 and will remain in place for six months.
 
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.

Crawford News

April 2026 - Update

April 21, 2026
Hobby or Business? You may not think you are running a business from your hobby or side hustle. However, if you start earning income from these activities regularly, you may be carrying on a business. Generally, carrying on a business involves ongoing and repeated activities with the intention of making a profit. These activities can include: regularly providing goods or services; obtaining and maintaining any necessary licences or permits; and/or keeping records of their work. However, you may not be operating a business where: Your transactions are one-off You do not intend making a profit You work as an employee rather than independently FBT Changes for Hybrid cars The ATO has updated its guidelines to include a new method to make it easier to calculate PHEV electricity costs when a vehicle is charged at an employee's home. To use the shortcut home-charging rate, employers and other individual taxpayers must meet the relevant eligibility requirements or they can still choose to calculate the actual electricity costs instead of using this optional method. Since 1 April 2025, PHEVs are not considered a zero or low emissions vehicle under FBT law and no longer qualify as exempt. Employers that provide PHEVs to their employees for private use, or that have PHEVs that are available for private use, may now have FBT obligations for the 2025/26 FBT year, subject to transitional arrangements. Do you need a new Logbook? You can keep the same logbook for your car for five years, but there are circumstances where you may need a new logbook. Relying on a logbook that no longer represents your work-related travel may result in them claiming more, or less, than you are entitled to. A new logbook may be required when a taxpayer: moves to a new house or workplace has changes to the pattern of use of the car for work purposes 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. If you 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 that you are replacing your original car with a new car; and that the date that nomination takes effect. If your employer provides you with a car or you salary sacrifice a car using a novated lease, you are not entitled to claim work-related car expenses using the logbook or cents per kilometre method. When claiming car expenses using the logbook method, you also need to keep various types of other records, including odometer records for the start and end of the period you own the car, proof of purchase price, decline in value calculations, and fuel and oil receipts. Reminder for March 2026 Superannuation Obligations Employers are reminded that employee super contributions for the quarter ending 31 March 2026 must be received by the relevant super funds by Tuesday, 28 April 2026. If the correct amount of SG is not paid by an employer on time, they will be liable to pay the SG charge, which includes a penalty and interest component. Reminder for Taxable payments annual report Businesses who pay contractors may need to lodge a 'Taxable payments annual report' by 28 August each year. This includes businesses paying contractors in the building and construction, cleaning and IT industries and certain other industries. The ATO will apply penalties to businesses that have not lodged their TPAR from 2025 or previous years, and/or that have been issued three reminder letters about their overdue TPAR. If you do not need to lodge a TPAR, you can submit a 'non-lodgment advice form'. Businesses that no longer pay contractors can also use this form to let the ATO know that they will not need to lodge a TPAR in the future. Expenses incurred to obtain employment were non-deductible The Administrative Review Tribunal recently held that medical expenses incurred by a taxpayer to obtain employment were not deductible as they were not incurred in gaining or producing his assessable income. The taxpayer was an airplane pilot. In July 2021, the Civil Aviation Safety Authority advised the taxpayer of the steps that he needed to take to regain the medical certificates that were a prerequisite to him holding a licence to work as a pilot. The taxpayer incurred expenses relating to this between July 2021 and May 2022, and he claimed a deduction for these expenses in his tax return for the 2022 income year. The ATO disallowed these deductions, and the ART affirmed the ATO's decision. The expenses were not deductible because they were incurred to put the taxpayer in a position to earn income i.e., to regain his certification, rather than in the course of earning that income, and they were therefore incurred too soon. 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.

March 2026 - Update

March 4, 2026
$20,000 instant asset write-off is extended Small business instant asset write off is extend to 30 June 2026. If a business has an aggregated annual turnover of less than $10 million, they may be able to use the instant asset write-off to immediately deduct the business portion of the cost of eligible assets that are $20,000. Eligible assets must be first used between 1 July 2025 and 30 June 2026. The $20,000 limit is per asset. Cash in hand sales The ATO is cracking down on businesses that use cash to avoid paying tax, employer and business obligations. Some examples of such situations are: Failure to report all sales Failure to pay GST, income tax, PAYG withholding, super guarantee, insurance and work cover Reporting income below $75,000 to avoid GST registration Failure to meet employment awards and work cover Workers who are paid cash-in-hand risk losing their entitlements and if they are injured at work, they may not be protected. Contractors income Data matching records indicate some contractors are incorrectly reporting or omitting income. Contractors need to report all their income in their tax return, including payments made by businesses for their contracting work. Note that, as part of the taxable payments reporting system, businesses in some industries must lodge a Taxable payments annual report to report contractor payments for providing the following services: Building and construction; Courier; Cleaning; Information technology; Road freight; and Security, investigation or surveillance. Contractors who provide the above services must note that the businesses they contract to report their payments to the ATO on their TPAR. Contractors must then report their income in their tax returns to avoid data matching discrepancies. If the ATO suspects a contractor may have omitted TPRS income on their tax return, it may contact them to request they amend their tax return. If the contractor does not take action, the ATO may conduct a review and audit of their business, and penalties and interest may apply. Government payments programs The ATO is reminding taxpayers that receive government payments for delivering services under a Commonwealth program, such as healthcare, disability support or child care, that they have an obligation to: Keep accurate records; and Report any such income they receive in their tax return. The ATO recently advised that it would be contacting taxpayers and tax agents in February by email to ensure that income received from government agencies such as the Aged Care Subsidy or under the National Disability Insurance Scheme is reported correctly in their tax returns. The ATO has updated its Government Payments Program data-matching program protocol to better detect non-compliance, and work more effectively with other government entities. Work-related expense claims rejected by ART  The Administrative Review Tribunal recently disallowed a taxpayer's claims for many different types of work-related expenses. The taxpayer was employed full-time as an engineer, working from home two days a week. For the 2023 income year, he claimed deductions totalling over $61,000, in relation to car expenses, travel expenses, clothing expenses, and home office expenses, all of which he claimed were work-related. The ATO largely disallowed these deductions, and the ART affirmed the ATO's decision, primarily due to problems with substantiating these claims. For example, in relation to the car expenses, the ART noted that none of the log books were contemporaneous, and the log book entries were inconsistent with independent records. In relation to travel expenses, the ART noted that the taxpayer did not provide evidence clearly identifying which travel expenses had been reimbursed by his employer, and the ride share documentation did not include the date, time or destination of travel. In relation to home office utility expenses, the ART noted that the taxpayer only provided calculations estimating the business use proportion of those expenses, without providing any documentary evidence to substantiate the 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.

February 2026 - Update

February 3, 2026
Cash acceptance is mandated for essential purchases From 1 January 2026, food and grocery retailers must accept cash for in-person transactions of $500 or less between 7am and 9pm. Small businesses with aggregate annual turnover under $10 million are generally exempted from the mandate. However, this mandate still applies to small businesses that share a trademark with a large retailer. The Government noted that, in addition to the cash mandate for fuel and groceries, consumers also already have the option to pay their bills, including utilities, phone bills and council rates, in cash at their local Australia Post outlet through Post Billpay. The Government will review this mandate after three years, to ensure it is functioning as intended. ATO child support data-matching program ATO will acquire child support data from Services Australia for the 2025 to 2027 income years, including the following: The ATO estimates that records relating to up to 300,000 individuals will be obtained each financial year, which will be matched against ATO records. The objectives of this program are to: allow Services Australia to more accurately assess child support obligations, and maximise opportunities to collect child support debts; and identify and educate individuals who may be failing to meet their lodgment obligations and help them to finalise their lodgment obligations, or notify the ATO that an income tax return is not required. Paying super guarantee Employers need to pay a minimum of 12% of each employee's ordinary time earnings into a complying super fund on a quarterly basis (the due date for the March 2026 quarter is 28 April 2026). In most cases, employees can choose the super fund. Employers who do not pay in full, on time or to the correct super fund will have to pay the SG charge, which is made up of the super they owe, nominal interest on those amounts (currently 10%), and an administration fee of $20 per employee, per quarter. These payments must be made through SuperStream. Small Business Superannuation Clearing House service will be permanently closed from 1 July 2026. Existing users should switch to an alternative method to pay their employees' super guarantee. When new employees start, employers must comply with the 'choice of fund rules' if the new employee does not choose a super fund. Employers may now need to request the new employee's 'stapled super fund' details from the ATO. Time limits on GST and fuel tax credit claims GST credits and fuel tax credits will expire if not claimed within the 4-year credit time limit (generally four years from the due date of the original BAS in which the taxpayer could have claimed them). Once credits expire, the ATO has no discretion or ability to amend the assessment to include those credits. There may be situations where the ATO is able to amend for overpaid or underpaid GST or overclaimed credits, but additional credits cannot be included in an amendment assessment. If credits are near expiry, taxpayers should consider: claiming the credits in their next BAS that is still within the 4-year credit time limit; requesting the amendment by lodging a revised BAS for the tax period to which the credits are attributable; or lodging a valid objection against their assessment for the period to which the GST credits are attributable before the end of the 4-year credit time limit. Departure Prohibition Orders for overdue tax debts The ATO is actively using departure prohibition orders as part of a broader shift towards debt collection. A DPO is an enforcement action available to the ATO to prevent certain persons with tax liabilities from leaving Australia without paying their outstanding tax. Since July 2025, the ATO has issued 21 DPOs, more than the total number issued in the entire financial year ended 30 June 2025. The ATO notes that a taxpayer was recently prevented from boarding a flight in the early hours of the morning due to a DPO imposed because of deliberate non-payment of a significant debt. The dog breeding activities treated as an enterprise The ART recently held that a taxpayer had carried on an enterprise of dog breeding for GST purposes. He had lodged activity statements for the quarters ended 30 September 2018 to 31 December 2021 inclusive, claiming input tax credits for the dog breeding activities he carried on from his home. The ATO disallowed the taxpayer's claims for the above periods, arguing that enterprises were not carried on, and that there was a lack of appropriate substantiation. The ART however held that the taxpayer's dog breeding operation was an enterprise for GST purposes, noting that his activities had "the necessary commercial character." Therefore, the taxpayer was entitled to ITCs for that enterprise. However, the ART affirmed the ATO's decision to reduce the taxpayer's other ITC claims, such as in relation to stamp duty on the acquisition of a property and for café and grocery expenses. The ART also admonished the taxpayer for apparently using artificial intelligence in the presentation of his case, as he appeared to rely on cases and principles that did not exist. 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.

December 2025 - Update

December 15, 2025
December 2025 Superannuation Guarantee is due on 28 January 2026 Employee super contributions for the quarter ending 31 December 2025 must be received by the relevant super funds by 28 January 2026. If the correct amount of SG is not paid by an employer on time, the employer must lodge a superannuation guarantee statement and pay the superannuation guarantee charge which includes admin fees and interest. ATO Small Business Superannuation Clearing House is closing ATO Small Business Superannuation Clearing House will close on 1 July 2026. Employers must make arrangements to move to an alternative clearing house now to avoid any unexpected delays with superannuation payments. Following are few key dates in relation to the clearing house. 10 December 2025 — Super payments, along with instructions, must be received by 5.30 pm AEDT on this date. Payments received after this time will be processed from 2 January 2026. 28 January 2026 — December SG due February to March 2026 — Employers should move to an alternative clearing house 28 April 2026 — March SG due 30 June 2026 — Final day of the service. Make final payments. Employers may already have other options readily available so they can exit from using the SBSCH ahead of time and your existing software and payroll packages may already include super functions they can use to pay SG. Popular software packagaes such as Xero contain their own clearing house.  ATO's approach to holiday home expenses ATO now takes the view that, if a taxpayer's rental property is also being used as a private holiday home, certain deductions relating to holding it will not be deductible in total as opposed to being apportioned. Expenses relating to ownership and use of the holiday home such as interest, rates and maintenance will not be deductible, unless the holiday home is 'mainly' used to produce assessable income. Whether a holiday home is used 'mainly' to produce assessable income will be determined based on a consideration of a number of factors. However, this will generally not apply to expenses incurred in relation to holiday homes that are rental properties before 1 July 2026, if those expenses are incurred under an arrangement entered into prior to 12 November 2025. ATO warns about barter credit tax scheme The ATO is warning the community to steer clear of an emerging tax scheme involving barter credits — a type of alternative currency used in some business networks. A tax scheme that involves artificially inflating deductions for donations of barter credits to deductible gift recipients is on the rise. While it may seem enticing, promoters and taxpayers could face potentially significant consequences if they are involved. The ATO is concerned that such schemes are being enabled by several barter exchanges that are allowing participants to access barter credits with a nominal face value that is much more than any payments actually made to the exchange. Participants then donate these barter credits to a DGR and claim a larger tax deduction than they are entitled to. Dental expenses are not deductible ATO has noted a number of claims for dental expenses this tax time. Dental expenses, including preventative and necessary dental treatment, medical expenses and other costs relating to personal appearance are not deductible. These expenses are generally private expenses, even if an employer expects an employee to maintain a certain appearance, or pays them an allowance to cover grooming expenses. A deduction can only be claimed for an expense that directly relates to earning their income. Private expenses cannot be claimed as a deduction. Taxpayers should have written evidence of all their expenses, and be able to show a direct connection with those expenses to their employment income. 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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