ATO will accept credit cards until 30 June 2027 Despite Reserve Banks credit card surcharge terms, ATO will continue to accept credit card payments for tax obligations until 30 June 2027. After 30 June 2027, taxpayers who wish to use credit cards to pay ATO will have to use third-party payment providers. Early Release of Super Schemes The ATO is concerned that some health practitioners and third-party facilitators are using predatory practices to get individuals to inappropriately access their super. Red flags include practitioners or third parties advertising early access to super for cosmetic or dental procedures on social media, or asking for myGov sign-in details so they can apply for you. Other common red flags include: practitioners conducting telehealth appointments, rather than in-person examinations for ‘compassionate release of super’; recommending more expensive treatments when cheaper options may be available; encouraging the use of super to pay for treatment, rather than other payment options, such as a payment plan; requiring the use of a specific provider to prepare the second ‘compassionate release of super’ medical report, or a specific third party to submit the application; requiring upfront payment for treatments and withholding information about the ongoing costs of the treatment; and charging fees to assist with preparing or submitting a ‘compassionate release of super’ application without being a tax agent. Work cars: Are employers overlooking private use? The ATO is calling on employers to check how their employees use work cars, as FBT may apply where a car is used or made available for private use by an employee or their family members or associates. Private use can include: school pick-ups or drop-offs personal trip garaging the car at or near the employee's home taking the car on weekend recreational trips. 2026 Budget Announcements Common rental property deduction errors The ATO has recently published the three most common rental property deduction errors it sees. Not apportioning interest expenses correctly Broadly, rental property owners can only claim deductions for interest they pay on a loan used to: buy the rental property; buy a depreciating asset for the property pay for deductible expenses that arise from renting out the property finance renovations and extensions to the rental property Interest on any part of the loan used for private purposes is not deductible. Where the loan is refinanced or redrawn to pay private expenses, such as school fees or a holiday, a deduction cannot be claimed for the interest on that portion. Incorrect claims of repairs vs capital works The ATO continues to see errors in claims for repairs, maintenance and capital works expenses. Generally speaking: repairs, such as fixing wear and tear, or damage to a property that occurred while renting it out, can be claimed as a deduction in the year they occur; improvements, such as renovating or replacing an entire structure, are capital expenses which can be claimed over time (generally 40 years); and adding or replacing something that’s not part of the structure is a depreciating asset and the cost is generally claimed over the asset's effective life. Separating private use of a property The ATO is also seeing rental expenses not being apportioned for any private use. Generally speaking, if a rental property owner: only uses part of the property to earn rent, they must apportion the expenses based on the area of the property rented; rents out the entire property, but for only part of the year, they must apportion the expenses based on the number of days it was rented or held to produce rental income; or charges below market rates of rent, and the expenses incurred are more than the amount of rent received, the ATO expects them to apportion the expenses by limiting them to the amount of rent derived from the property. Where the rental property owner uses the property as a holiday home, they cannot claim ownership and use expenses, such as interest, rates and repairs, unless they 'used or held it for use mainly for producing rental 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.

ATO focus on PAYG instalments variations The ATO is writing to taxpayers who have varied their PAYG instalments to nil over multiple years, reminding them that the general interest charge may apply where their instalments have been significantly understated. Where varied instalments are less than 85% of the total tax payable, the ATO may impose GIC on the difference and, depending on the circumstances, penalties may also be applied. Taxpayers are advised to maintain appropriate records to support their variation decisions, and review variations where circumstances change. FBT changes for salary sacrificed work-related benefits From 1 April 2027, employers will no longer be able to use the ‘otherwise deductible rule’ to reduce the taxable value of an expense payment fringe benefit provided to an employee where the expense is: work-related; covered by the new $1,000 standard deduction; and provided under a salary sacrifice arrangement. This includes where an employer pays for, or reimburses, work-related expenses, such as home office expenses, home phone or internet expenses, or self-education expenses. However, the otherwise deductible rule can continue to apply where the expense is: not covered by the standard deduction; or covered by the standard deduction but the benefit is not provided under a salary sacrifice arrangement. Further, from 1 April 2027, certain work-related items will no longer qualify for the FBT exemption where they are provided under a salary sacrifice arrangement. These include: portable electronic devices; computer software; protective clothing; and briefcases and tools of trade. Eligible work-related items may still qualify for the exemption where they are not provided under a salary sacrifice arrangement. Further, under the changes, employers may be able to provide an employee with more than one eligible work-related item in an FBT year, even where the items have the same or substantially identical function, and continue to receive the exemption where the items: are mainly used for work purposes; and are not provided under a salary sacrifice arrangement. This repeals the general 'one-item' restriction applying to this work-related item exemption from 1 April 2027. Cents per kilometre method Motor Vehicle claims There are several misconceptions that commonly lead to incorrect claims under the cents per kilometre method for claiming deductions for car expenses. Common errors include: Claiming travel between home and work, which is generally private and non-deductible; Automatically claiming 5,000 kilometres without the appropriate records (for example, being unable to show how the business kilometres were worked out); Claiming car expenses for a vehicle provided under a novated lease through a salary sacrifice arrangement; Separately claiming the decline in value of a car and other expenses when using the cents per kilometre method; and Using both the cents per kilometre and logbook methods for different periods during the same year. Loss carry back rules have returned The re-introduced loss carry back measure has also now become law, applying to income years starting on or after 1 July 2026. Where eligible, companies will broadly be able to carry back a tax loss (revenue in nature) 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. ATO extends data-matching programs The ATO is continuing its visa data-matching program, acquiring data from the Department of Home Affairs from the 2027 to the 2029 income years. Under this program, the data collected may include: address and contact history for visa applicants, sponsors and migration agents; histories of visas granted, including visa subclasses; an individual’s visa status at a point in time; details of migration agents, sponsors and education providers; and international travel movements undertaken by visa holders (arrivals and departures). The ATO is also continuing its passenger movements data-matching program for the same period. Under this program, the data collected by the ATO may include names, dates of birth, arrival and departure dates, passport information and status types (including visa status, residency and citizenship status). 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.

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.