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.

50% CGT Discount is replaced with Indexation From 1 July 2027, the 50% CGT discount will be replaced by cost base indexation for assets held for more than 12 months, with a 30% minimum tax on net capital gains. These changes will apply to all assets, including pre-CGT (1985) assets, held by individuals, trusts and partnerships. The changes will only apply to gains accruing on or after 1 July 2027. The 50% CGT discount will continue to apply to gains that accrued before 1 July 2027 and capital gains on pre-CGT assets that accrued before 1 July 2027 will remain exempt from CGT. Investors in new residential properties will still be able to choose between the 50% discount; or the indexation method and the 30% minimum tax. Income support payment recipients will be exempt from the minimum 30% tax and assets that are sold prior to 1 July 2027 will continue to receive th 50% discount. Reforms to Negative Gearing From 1 July 2027, rental losses from established residential properties will only be deductible against rental income or the capital gains from residential properties. Excess losses will be carried forward and are able to be offset against residential property income in future years. These changes will apply to established residential properties acquired from 7:30 PM (AEST) on 12 May 2026. Properties acquired prior to this time will be exempt from the changes. Exemptions apply to eligible new builds, properties in superannuation funds and widely held trusts. Targeted exemptions apply to build-to-rent developments and private investors supporting government housing programs. Reforms to taxation of discretionary trusts From 1 July 2028, discretionary trusts will be charged a minimum 30% tax on taxable income. Beneficiaries, excluding corporate beneficiaries, will receive non-refundable credits for the tax paid by the trust. Corporate beneficiaries will not be entitled to a credit for the tax paid by the trustee causing a punitive tax burden for corporate beneficiaries. The minimum tax will not apply to other types of trusts such as fixed trusts, fixed testamentary trusts, complying superannuation funds, special disability trusts and deceased estates. Some types of income such as primary production income, certain income relating to vulnerable minors, amounts to which non-resident withholding tax applies, and income from assets of discretionary testamentary trusts existing at announcement will also be excluded. Expanded rollover relief will be available for three years from 1 July 2027 for small businesses and others that wish to restructure out of discretionary trusts into another type of entity, such as a company or fixed trust. Measures for Individuals $ 250 tax offset will be available for working Australians such as employees and soletraders from 1 July 2027. A standard deduction of $ 1,000 will be available for work-related expenses from 2027 financial year. Individuals who incur work-related expenses greater than the $1,000 maximum standard deduction can continue to claim their deduction in the usual way. The current 16% tax rate for taxable income upto $ 45,000, will be reduced to 15% effective 1 July 2026 and to 14% effective 1 July 2027. From 1 July 2025, the current Medicare levy threshold is increased from $ 27,222 to $ 28,011 for individuals and $ 45,907 to $ 47,238 for families.For each dependent child the threshold is increased from $ 4,216 to $ 4,338. Single Seniors and Pensioner threshold will increase from $ 43,020 to $ 44,268 and Senior and Pensioner families threshold will increase from $ 59,886 to $ 61,623. The age based private health insurance rebate will be removed effceteive 1 April 2027. Measures for Businesses The $ 20,000 instant asset write-off for small businesses with a turnover below $ 10 million will continue. Tax loss carry back rules are reintroduced effective 1 July 2026. Tax losses can be carried back for two years for companies with an annual global turnover below $ 1 billion. Startup companies with a an annual aggregate turnover below $ 10 million that generate tax losses in their first two years will receive a refundable tax offset. Offset will be limited to the FBT and PAYG withholding tax paid. Reducing the Electric Car Discounts From 1 April 2029, FBT discount will drop to 25% for all electric cars valued up to and including the fuel-efficient luxury car tax threshold, implemented through a 15% rate in the statutory formula. Transitional arrangements: • All eligible electric cars will retain the FBT discount rate that was in place when the arrangement commenced. • All electric cars valued up to and including $75,000 that are provided before 1 April 2029 will continue to be eligible for a 100% discount on FBT • Electric cars valued above $75,000 and up to and including the fuel-efficient luxury car tax threshold that are provided between 1 April 2027 and 1 April 2029 will be eligible for a 25% discount on FBT. Research and Development Incentive From 1 July 2028, the Government will: • Increase the offset for core R&D expenditure by around 25% to 50%, through a 4.5 percentage point increase in core R&D offset rates. • Reduce the intensity threshold from 2% to 1.5%. • Remove eligibility of supporting R&D expenditure for the R&D tax incentive. • Increase the turnover threshold for the highest offset rate from $20 million to $50 million. • Entities below the $50 million turnover threshold, maintain previous eligibility for the higher offset rate while limiting refundability to entities under 10 years of age. • Lift the maximum R&D tax incentive expenditure threshold from $150 million to $200 million. • Lift the minimum expenditure threshold from $20,000 to $50,000, with research activities valued below this amount required to be undertaken with a registered Research Service Provider or Cooperative Research Centre. ATO’s response to High Fuel Costs The ATO will provide targeted support to eligible businesses that are unable to meet their payment obligations for three months, from 1 April 2026 to 30 June 2026. In particular: the ATO will provide streamlined access to more flexible payment plan arrangements, including longer payment terms, no upfront payment, and access to GIC remission where payment and lodgment conditions are met high fuel costs will be a relevant factor in consideration of additional requests for remission of GIC and other penalties the ATO will provide support to vary PAYG instalments where there has been a reduction in taxable income. ATO launches new app feature to stop scam calls Taxpayers can now instantly confirm whether a call claiming to be from the ATO is genuine, with the launch of a new in-app security feature designed to shut down scammers. The new verify call feature allows users to confirm, in real time, that they are speaking with the real ATO. Taxpayers are encouraged to download the ATO app and register their device. Then, when they receive a call from someone claiming to be from the ATO, they can simply open the ATO app, login and select the verify call option. Within 30 seconds, a notification should confirm it is an ATO call. If it does not appear, users should treat it as a scam call and hang up. Tribunal decision regarding home office and car expenses overturned The Federal Court recently allowed the ATO's appeal against an Administrative Review Tribunal decision that a taxpayer was entitled to claim deductions for home office and car expenses. The taxpayer worked full-time for as a sports presenter. During the 2021, because of COVID-19 pandemic restrictions, the taxpayer undertook one of his work roles from a second bedroom in his home apartment which he was renting with his wife. He undertook most of another work role from the employer’s studio. The Tribunal had allowed the taxpayer's deductions for occupation expenses being a proportion of the rent for his apartment and for car expenses incurred in driving between his home and the ABC studio to perform his two roles in full. However, the Federal Court subsequently overturned this decision, noting in relation to the claim for the occupation expenses that the essential character of the rent paid was to secure domestic accommodation, and the prevailing conditions requiring the taxpayer to work from home did not alter this. Also, in relation to the car expense claims, the Court considered the taxpayer's travel between his home and the ABC studio was to work rather than on work, and was therefore not deductible. Tribunal rejects claims for self-education expenditure The Administrative Review Tribunal recently rejected an employee's claims for self-education expenses, as they did not have a sufficient nexus with his current job and income-earning activities. The taxpayer worked as an employee for a large company. He claimed that his role evolved to include marketing and sales responsibilities during the 2022 income year, and that he was required to take courses in sales and marketing to help him perform his role. The taxpayer sought to amend his tax return for the 2022 income year by claiming additional deductions for expenditure on online educational and training courses, related computer software and hardware, and membership fees. The ATO disallowed these deductions, and the Tribunal affirmed the ATO's decision. The Tribunal noted that there was nothing in writing from the taxpayer's employer requiring him to undertake sales and marketing activities, let alone take self-education courses in those areas. The expenditure incurred by the taxpayer related to online content creation, affiliate marketing, and entrepreneurship, whereas the taxpayer’s work related to providing technical IT and computer services. Therefore, the expenditure did not bear a sufficient nexus with the taxpayer's income-earning activities for it to be deductible. 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.

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.