October 2021 - Update
Author na1616mewedewd
Extra super step when hiring new employees
Employers may soon need to do something extra when a new employee starts to work for them. Currently, if a new employee does not choose their own fund, their employer can pay contributions for them to a default fund.
From 1 November 2021, if a new employee does not choose a specific fund, their employer may need to request the employee’s ‘stapled super fund’ details from the ATO. A stapled super fund is an existing account which is linked (or 'stapled') to an individual employee, so it follows them as they change jobs.
Businesses will be able to request stapled super fund details for new employees using ‘Online services for business’, or by asking their registered tax or BAS agent to do this for them.
ATO support for employers with expansion of STP
As part of the expansion of Single Touch Payroll (known as STP Phase 2), from 1 January 2022, employers will need to report additional payroll information in their STP reports including:
• disaggregation of gross amounts (including separate reporting of paid leave, allowances, overtime, directors’ fees and salary sacrifice amounts);
• employment and taxation conditions (including information from the TFN declaration); and
• income types (for example, salary and wages, working holiday maker income, foreign employment income).
To support employers with the move to STP Phase 2 reporting, the ATO will take the following approach.
• Employers that can start Phase 2 reporting by their digital service provider’s deferral date (if applicable), do not need to apply to the ATO for more time.
• If an employer’s software will be ready for 1 January 2022 and they are able to start reporting before 1 March 2022, they do not need to apply to the ATO for more time (that is, an automatic extension applies).
The ATO has also advised that penalties will not be applied for genuine mistakes in the first year of Phase 2 reporting until 31 December 2022.
Additional ATO support during COVID-19
The ATO is providing additional support to taxpayers having difficulty meeting their tax and superannuation guarantee charge obligations for employees because of COVID-19.
Available support includes the following:
• Lodgement or payment support options – for example, payment plans or remitting interest and penalties.
• Varying PAYG instalments – The ATO will not apply penalties or charge interest on varied instalments that relate to the 2022 income year where taxpayers have taken reasonable care to estimate their end of year tax liability.
• Moving from quarterly to monthly GST reporting for quicker access to refunds.
• Applying for administrative relief for Division 7A minimum yearly repayments.
If you need assistance with your tax or super obligations, we can assist with identifying your options and apply to the ATO on your behalf
Paid Parental Leave changes support parents in lockdown
The Paid Parental Leave (‘PPL’) scheme has been amended to enable expectant parents whose work has been affected by COVID-19 lockdowns to access Parental Leave Pay or Dad and Partner Pay under the scheme.
Many people who would otherwise have qualified for PPL, may no longer meet the ‘work test’ condition to be eligible for payment because of continued lockdowns across much of Australia. For example, this could apply to a person who has been stood down, had their hours of work reduced or ceased work entirely as a result of a lockdown.
The changes to the PPL ensure that the period a person receives an Australian Government COVID-19 payment or the COVID-19 Disaster Payment (that is, because their work has been impacted by lockdowns) counts towards the work test, so that they may still receive Parental Leave Pay or Dad and Partner Pay.
Reminder of SG obligations for September 2021 quarter
From 1 July 2021, the minimum contribution required is 10% (up from 9.5%) of an employee’s Ordinary Time Earnings base, up to a maximum quarterly contribution base of $58,920 for 2021/22.
The due date for making SG contributions for the September 2021 quarter is 28 October 2021.
Victorian Commercial Tenancy Relief Scheme
If you’re a commercial tenant struggling with rent payments, support is available through the Commercial Tenancy Relief Scheme.
Small and medium businesses that have experienced a loss in turnover of more than 30% during the pandemic will receive financial relief in the form of proportionate rent reduction. The Scheme will apply retrospectively from 28 July 2021 and will run until 15 January 2022.
Tenants and landlords can contact the Victorian Small Business Commission for further information on 13 87 22 or visit vsbc.vic.gov.au.
Victorian Commercial Landlord Hardship Fund 3
Small landlords can apply for a grant of up to $6,000 per eligible tenancy in proportion to their ownership share. In cases where landlords are experiencing acute hardship because of the rent waiver agreed with their tenant(s), the grant may be increased to a maximum of $10,000 per eligible tenancy.
Applications to the Commercial Landlord Hardship Fund 3 will close at 11:59pm on 15 January 2022, or until funds are exhausted.
To be eligible for the fund, the landlords must:
• Have received a written request for rent relief made by a commercial tenant
• Respond to the tenant in writing within 14 days, or the agreed timeframe
• Agree to reduce rent in proportion to their tenant’s downturn in turnover
• At least 50 per cent of the agreed rent relief must be a rent waiver
• Provide the tenant with a landlord acceptance letter detailing the agreement.
• Is a small landlord with total taxable landholdings of less than $3 million, including part holdings but excluding principal place of residence, or where a property is held on trust, the total taxable landholdings of the trust must be less than $3 million
• Is an owner and landlord of the property for which an application is made
• Is a landlord that has made a rent relief agreement with their tenant under the Commercial Tenancy Relief Scheme in operation between 28 July 2021 and 15 January 2022
• Is an Australian citizen, resident or Australian incorporated entity.
To be eligible for acute hardship consideration, in addition to the above, small landlords will be required to attest that the information provided in the application is true and correct and they hold the written consent of the tenant to provide business and contact details and commercial rent represents more than 50 per cent of their total gross annual income for the 2019-20 financial year.
The information provided in this update is general in nature and if you have any queries of require further information or assistance with the above, please contact our office.
Crawford News
ATO Focus on Small Business The ATO is actively identifying and addressing errors among businesses with turnovers between $1 million and $10 million. Key industries under scrutiny include property and construction, as well as professional, scientific, and technical services such as engineering, IT, design, and consulting. Common issues observed include: Omitted income or sales in Business Activity Statements and tax returns, including income from related entities. Overstated expenses or GST credits. Private expenses incorrectly reported as business-related or not properly apportioned. Failure to register for GST when required. Incorrect R&D tax incentive claims for ineligible activities. Lack of independent advice from registered tax agents, particularly in contractor arrangements. By highlighting these issues, the ATO aims to help small business operators improve compliance and avoid common mistakes. Dual Cab Utes and FBT Dual cab utes are not automatically exempt from fringe benefits tax. If an employer provides a dual cab ute for work purposes and it is available for personal use, it may be subject to FBT. To qualify for an exemption, the vehicle must: Be an eligible vehicle , meaning it is designed to carry at least one tonne, more than eight passengers, or it is not primarily designed for passenger use. Be used only for limited private purposes , such as minor, infrequent, or irregular trips. If these conditions are not met, the employer may be liable for FBT. Employers should monitor employee vehicle use and maintain proper documentation to determine eligibility. Claiming Business Expenses Taxpayers can claim deductions for most business expenses if they comply with the ATO’s three key rules which are: The expense must relate directly to business use. If the expense has both business and private use, only the business portion can be claimed. Taxpayers must keep records to substantiate their claims. New ATO Data-Matching Programs The ATO continues to enhance its data-matching programs to improve compliance, detect errors, and prevent fraud. Data is used to pre-fill returns, verify accuracy, and identify taxpayers who may need assistance. When discrepancies arise, the ATO may contact tax agents or their clients to clarify the differences. Rental Properties ATO will issue letters to taxpayers where its data suggests that rent income was omitted or incorrect in previously lodged returns. If you receive such a letter, please contact our office for assistance. Offshore Merchant Data-Matching The ATO will collect merchant transaction data from Australia’s major banks for the 2025–2027 financial years. Around 9,000 offshore merchant records will be acquired annually. SMSF Compliance and Release Authorities The ATO has noted an increase in self-managed super funds failing to comply with release authorities such as excess contributions or Division 293 tax. Common issues include: Failure to respond within the required 10 business days. Incorrect responses, such as not releasing the full amount or not submitting a release authority statement. Non-compliance can attract significant penalties. Trustees should ensure robust systems are in place to respond promptly and correctly to ATO release authorities. The information in this publication is general in nature and should not be relied upon as professional advice. Individuals should seek specific guidance to ensure applicability to their personal circumstances.
Reminder of September Quarter Superannuation Guarantee Employee super contributions for the quarter ending 30 September 2025 must be received by the relevant super funds by Tuesday, 28 October 2025. 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. Dealing with rental property repairs Taxpayers who have had work done on their rental property should ensure the expense is categorised correctly to avoid errors when completing their tax return. A deduction for repairs and maintenance expenses can be claimed for work done to remedy, or prevent defects, damage or deterioration from using the property to earn income. These expenses can be claimed in the year they were incurred. However, some capital expenditure may not be immediately deductible, such as for initial repairs, capital works, improvements and depreciating assets. Initial repairs include fixing any pre-existing damage or deterioration that existed at the time of purchasing the property, even if the damage or deterioration was unknown to the taxpayer at the time of purchase. Initial repairs are treated as part of the acquisition cost and included in the cost base of the property for CGT purposes, unless they are capital works or depreciating assets. Capital works are structural improvements, alterations and extensions to the property, and can generally be claimed at 2.5% over 40 years. Capital works deductions can only be claimed after the work has been completed, regardless of when the taxpayer pays the deposit and instalments. Improvements or renovations that are structural are also capital works. Work that goes beyond remedying defects, damage or deterioration that improves the function of the property is regarded as an improvement. Repairs to an entirety are capital and cannot be claimed as repairs. Repairs to an entirety generally involve the replacement or reconstruction of something separately identifiable as a capital item. ATO warns private use of work vehicles and FBT Employers who provide vehicles to their employees need to check how the vehicles are used and whether any exemptions apply to determine if they attract fringe benefits tax. FBT generally applies when a work vehicle is made available for private use, even if it is not actually used. Private use includes any travel not directly related to the employee's job. Exemptions may apply depending on the vehicle's specifications and the nature of the private use. The most common issues the ATO sees include: incorrectly treating private use as business use; assuming dual cab utes are exempt from FBT — exemptions only apply if the vehicle is eligible for the specific FBT exemption and private use is limited; incorrectly classifying vehicles; poor record keeping that does not support the claims or the FBT calculations made Tips to help sole trader clients The ATO is seeing sole traders make mistakes in the following areas: not reporting all income — this includes income earned outside their business (like a 'side hustle'), cash jobs, or payments in-kind/barter deals; overclaiming expenses — this includes claiming the portion of an expense related to personal use, or overstating the cost of goods sold and other business expenses; calculating business losses; incorrectly claiming and offsetting losses from non-commercial business activities against other income sources; misreporting personal services income ('PSI') to gain tax benefits; not registering for GST if they are in the taxi or ride-sourcing industry, or when they reach the GST threshold; and not keeping accurate and complete records. 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.
Are you covered in the event of an audit or a review? With government revenue authorities increasingly using data matching, artificial intelligence, and even social media, they can compare disclosures made in your lodged tax returns to those of other taxpayers or benchmarks. If a data matching check escalates to an official audit, inquiry, investigation, or review, costs in defending your position can accumulate quickly, regardless of whether any adjustments are made to your returns The Audit Shield service is designed to cover such unexpected costs in the event of an audit or a review, and the policy is underwritten by AAI Limited. Benefits of our Audit Shield service: Audits and reviews of Employer Obligations (PAYG/FBT/SG), Income Tax, and GST covered. Previously lodged returns are covered automatically. Fees of any other external specialist (e.g. taxation lawyers) or relevant consultant engaged or instructed by us to assist us in a response to audit activity are also covered. Payment is tax deductible. Please contact our office for more information. Reducing student debt is now law 2026 Federal budget announcement of reducing student debt is now law. A 20% reduction will apply to Higher Education Loan Program debts and other student loans that were incurred before 1 June 2025. The minimum repayment threshold is also increased from $54,435 to $67,000 in 2026 financial year and a new marginal repayment system will apply to taxpayers with income above $ 67,000 for repayment calculations. Previously the repayments were based on a percentage of the repayment income. Small Business Superannuation Clearing House is closing The Small Business Superannuation Clearing House will close on 1 July 2026. SBSCH is a free online service provided by the Australian Government through the ATO to enable superannuation payments. New user registrations will close on 1 October 2025. Existing users must now transition to alternative solutions such as Xero. ATO will include on hold debts in account balances From August 2025 ATO will be including debts on hold in taxpayer ATO account balances. A debt on hold is an outstanding tax debt which ATO has previously put debt collection actions on hold. ATO is currently offsetting such debts on hold against any refunds or credits the taxpayer may get, and ATO has not historically recorded these debts on taxpayer statements of account. If you have debts on hold, more than $100, you will receive a letter before it is added to your ATO account balance. If you have a debt on hold of less than $100, the debt will be included in their ATO account balance but will not receive a letter. PAYGW reminders for activity statements ATO will be sending employers a reminder to lodge their activity statements which include the amounts the ATO has on record for them such as PAYGW reported via STP, GST instalments and PAYG instalments. The ATO's reminders are intended to provide a timeframe for employers to review the prefilled information before lodging activity statements. If the employers do not lodge by the specified date, the ATO will lodge the activity statements based on the information they have, and the debt will be payable. If employers do not make any changes to correct the data or lodge by the due date and the activity statement has been finalised by ATO, they will need to adjust these amounts by lodging a revised activity statement. 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.
Taxpayers who need to lodge a TPAR Taxpayers may need to lodge a Taxable payments annual report online by 28 August if they have paid contractors to provide any of the following services on their behalf: building and construction; cleaning; courier and road freight; information technology; or security, investigation or surveillance. If the ATO is expecting a TPAR from a taxpayer who does not need to lodge one, they can complete a 'TPAR non-lodgment advice form' by 28 August. Taxpayers who no longer pay contractors can also use this form to tell the ATO they will not need to lodge a TPAR in the future Please contact our office if you need assistance with completing and/or lodging a TPAR. Note that paper lodgments of TPARs will no longer be accepted after 28 August 2025. Changes to tax return amendment period for business Businesses with an annual aggregated turnover of less than $50 million now have up to four years from the date of their tax return assessment to request amendments increased from two years. This applies to assessments for the 2024/25 and later income years. If businesses make a mistake on a tax return and need to request an amendment, they should lodge their requests well before the end of the amendment period to make sure the ATO can process it within the time limit. They should keep accurate and complete records to support their amendment request. Paid parental leave changes have now commenced As from 1 July 2025, the amount of Paid Parental Leave available to families increased to 24 weeks, and the amount of Paid Parental Leave that parents can take off at the same time has also increased from two weeks to four weeks. Superannuation will now also be paid on Government Paid Parental Leave from 1 July 2025, at the new super guarantee rate of 12%, paid as a contribution to their nominated superannuation fund. Parents will also benefit from an increase in the weekly payment rate of Paid Parental Leave, increasing from $915.80 to $948.10 (in line with the increase to the National Minimum wage). This means a total increase of $775.20 over the 24-week entitlement. ASIC warning about pushy sales tactics urging quick super switches ASIC is warning Australians to be on alert for high-pressure sales tactics, click bait advertising and promises of unrealistic returns which encourage people to switch superannuation into risky investments. The warning comes amid increasing concerns from ASIC that people are being enticed to invest their retirement savings in complex and risky schemes. These calls may not have the hallmarks of a typical scam. The caller will seemingly have your best interests at heart, and they say they want to help you find a better super product or locate lost super for free. Consumers should always ask questions about salespeople's connections to funds, particularly in circumstances where a particular fund appears in the pitch, as there may be a commission arrangement. Taxpayer's claim for travel expenses denied In a recent decision, the Administrative Review Tribunal denied an offshore worker's claim for work-related travel expenses, although it did allow his claim for home office expenses. During the relevant period, the taxpayer resided in Queensland with his family, while his employment as an engineer was primarily based at an offshore facility located off the coast of Western Australia. In his tax return for the 2022 income year, the taxpayer claimed work-related expenses of over $30,000, relating to accommodation, meal and incidental expenses for stays in Perth, Darwin and Broome between rotations on the offshore facility. The ART noted that the taxpayer's permanent work location was the offshore facility. It accordingly largely disallowed the work-related expenses on the basis that they were "either preliminary to the commencement of those duties, or occurred after employment duties had ceased, and the taxpayer was on leave." The ART also did not accept the taxpayer's claim for travel-related expenses with reference to the substantiation exception, as the allowances he received were not 'travel allowances'. However, the ART did accept the taxpayer's claim for home office expenses of $579, noting that "As an engineer, he is required to engage in continuing professional development and the Masters and other studies completed in the home office were for this purpose." 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.
