$20,000 instant asset write-off for small business extended to 30 June 2025 (May 2024 Federal Budget Update)

The Government will extend the instant asset write-off concession for small businesses for another 12 months. This will allow small businesses with turnovers capped at $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose between […]

HECS/HELP debt indexation changes (May 2024 Federal Budget Update)

There are no further details contained in the Budget papers on the announced changes to the way that the indexation factor applied to HELP debts will be calculated. Here is an outline of the recently proposed changes. A student who receives a HELP loan under any of the student loan schemes has an “accumulated HELP […]

Low income tax offset: Unchanged (May 2024 Federal Budget Update)

No changes were made to the low income tax offset (LITO) in the 2024–2025 Budget. For completeness, and as a reminder, while the low and middle income tax offset (LMITO) ceased from 1 July 2022, low and middle income taxpayers remain entitled to the LITO. The maximum amount of the LITO is $700. The LITO is […]

Medicare levy low-income thresholds for 2023–2024 (May 2024 Federal Budget Update)

The Medicare levy low-income thresholds for 2023–2024 would normally have been announced in this 2024–2025 Budget. However, the Government released the 2023–2024 Medicare levy thresholds on 25 January 2024 when it announced the changes to the Stage 3 tax cuts. The new thresholds to provide cost-of-living relief were enacted by the Treasury Laws Amendment (Cost […]

Payday super: no further details but funding to improve unpaid super in bankruptcy (May 2024 Federal Budget Update)

The Budget papers did not reveal any further details on the Government’s proposal to require all employers to pay their employees’ super guarantee (SG) at the same time as their salary and wages from 1 July 2026. However, the Government said it will provide $111.8 million over four years from 2024-25 (and $12.4 million per year […]

ATO BAS notification period extended (May 2024 Federal Budget Update)

The Government will extend the time the ATO has to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation. The ATO’s mandatory notification period for BAS refund retention will be increased from 14 days to 30 days to align with time limits for non-BAS refunds. The extended period […]

Increased ATO funding to counter fraud (May 2024 Federal Budget Update)

The Government will provide $187.0 million over four years from 1 July 2024 to the ATO to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems. Measures to be funded includes: upgrades to information and communications technologies to enable the ATO to identify and block suspicious activity in real […]

May 2024 Insights & Updates for Munro’s Clients

This month for you we have the following Insights & Updates: Business Improvement Insights Tips for Improving Cash Flow in Your Business Profit Improvement Diagnostic Tax Updates Increase in the instant asset write-off threshold to $30,000 Self-education expenses not tax deductible First ASIC prosecution for failing to have a director ID Small business skills and […]

ATO identifies common mistakes with Division 7A (May 2024 Tax Update)

Relevant For: Business owners dealing with private company loans, who need to ensure compliance with tax laws to avoid costly mistakes. Key Points: Division 7A treats loans from private companies to shareholders/associates as dividends unless conditions are met. Loans must be repaid by the lodgement day or meet specific conditions to avoid dividend classification. Complying […]

April 2024 Insights & Updates for Munro’s Clients

This month for you we have the following Insights & Updates: Business Improvement Insights Navigating the 5 Stages of Growth to Maximise Business Value Business Growth Diagnostic Tax Updates Revised stage 3 tax cuts now law Refresher on deductibility of self-education expenses ATO scrutinising novated leases Paying super on expanded government paid parental leave Small […]

ATO Crack Down on Family Trust Distributions

The ATO has been trying to crackdown on the use of trusts for many years and has recently released the following draft ruling, guideline and taxpayer alert relating to trust distributions that have associated reimbursement agreements: Draft Taxation Ruling (TR 2022/D1) – this deals with the ATO’s views on when section 100A will apply; Draft Practical Compliance Guideline […]

Protecting Your Family Home from Creditors

A recent Federal Court tax case is a sobering reminder you and your spouse cannot take asset protection for granted. In the Commissioner of Taxation v Bosanac [2021] FCAFC 158, the court made a judgment against the taxpayer for unpaid taxes. It established that a $4.5 million property acquired in the name of one spouse (despite being […]

Four Things Every Employer Should Know About STP Phase 2

The expansion of Single Touch Payroll (STP2 / STP Phase 2), significantly increases the amount of payroll information that needs to be reported to the ATO. It is hoped that this additional reporting will assist in ensuring employees are paid correctly as well as reducing the need for employers to report information about employees to […]

Scale Up Exits

A recent ‘Exit Story’ Panel Discussion was held at Perth-based co-working space Flux. The panel participants were Glen McIvor of Solv, Stephen Langsford of TyreConnect, Olivia Humphrey of Kanopy, and Doug Fitch of Agworld. The interviewer was Derek Gerrard of Purpose Ventures. Here are a few of the key points The time between startup and […]

Negative Gearing with a Rental Property

The concept of “negative gearing” essentially means that your property makes a tax loss from renting. As a result, the ATO may effectively pay for some of the rental costs due to an increase in your tax refund (or reduction in your tax liability). Why would anyone want to be negatively geared? There are two main reasons: […]

Tax Concessions Associated with Early Stage Innovation Companies Under Review

There are generous tax incentives currently available which are designed to attract and encourage investment into early-stage Australian companies (i.e. Startups & ScaleUps). The Government has announced it will review these tax incentives. These tax incentives include: The Early Stage Innovation Company (ESIC) Tax Offset, which is a non-refundable carry forward tax offset equal to […]

Division 7A Mess Up Series – Part Four: Underpayment or Nonpayment of Subtrust & Division 7A Interest – Wrong Dates, Interest Rates & Fake Payouts

One of the big ones when it comes to Division 7A Mess Ups is underpayment or nonpayment of interest. Failure to satisfy the conditions of a complying Division 7A loan or a subtrust investment arrangement is considered a breach. Underpayment or nonpayment of interest is such a breach. Underpayment can occur by using the wrong […]

Division 7A Mess Up Series – Part One: Don’t touch those pre-09 UPEs or pre-97 Loans & the Debt Forgiveness Error

As a brief preamble, a loan a company made to shareholders or associates before 4 December 1997 (“pre-97 Loan”) and an unpaid present entitlement from a trust to a company made before 16 December 2009 (“pre-09 UPE”) are typically ‘quarantined’ from the ATO’s Division 7A compliance action. In simple terms, if your company has either […]