An interior shot of a home office. In the background is a couch, floor lamp and a large potted plant. The foreground focus is a chair and a desk on which sits a tablet, mobile phone, laptop, cup of tea, notebook and a small potted plant

Recent ATO Updates

  1. New Tax Rates

2. Don’t Lodge Early
The Australian Taxation Office is warning taxpayers against rushing to lodge their tax returns on 1 July. The ATO said those who lodge in early July are twice as likely to make a mistake in their tax return than those who wait for pre-fill information to populate, an issue that is particularly relevant if you receive income from multiple sources. The ATO emphasised that “… tax time is not a race,” saying there is a much higher chance that your return will be missing important information if you lodge too soon.

3. Tax Debt Collection Action to Increase
On Tuesday, incoming Tax Commissioner Rob Heferen appeared before the Senate Economics Legislation Committee. He stated that the ATO “… can’t shy away from the significant amount of tax debt owed, with collectable debt now over $50 billion.” Heferen said the tax debt is not disputed as most of it has been self-reported and comprises amounts withheld from employees’ wages and collected from consumers as GST but not yet paid to the ATO.

4. Capital Losses
The ATO has advised it will focus on capital losses this financial year, wishing to remind taxpayers of some of the key rules:

  • previous and current year capital losses can be used to offset current year capital gains (older capital losses must be used first);
  • where a carried-forward loss is more than or equal to the current year’s capital gains, you won’t have a current year gain;
  • any capital losses remaining after offsetting the current year’s gains can be carried forward indefinitely;
  • you can choose which capital gains to subtract the losses from, with the exception of collectables which can only offset gains from other collectables.

5. Tax Return Item D4 to include ALL education
A slight administrative change, from the 30 June 2024 tax year, item ‘D4 – Work related self-education expense’ will now also include education obtained from professional organisations, e.g. seminars from CPA Australia, and not just places of education like universities. Previously, these expenses were claimed at item ‘D5 – Other work-related expenses’.

6. Cents per Kilometre Increase
For those of you who claim work-related car expenses using the Cents per Kilometre method, you’ll be pleased to learn the ATO has increased the rate for the 2023/24 to $0.85 a kilometre, up from $0.78 in the 2022/23 financial year.  

7. Substantiation Requirements
As mentioned above, the Tax Office is increasingly focused on recouping as much tax as possible, including that from the “gap” between what it believes taxpayers owe and what taxpayers calculate in their returns. For example, while there is a rule that you can claim up to $300 in work-related deductions without needing to keep receipts, the Tax Office knows some people claim this amount (or close to it) without spending a cent. As such, work-related deductions will be scrutinised again this year.

Motor vehicle logbooks are another potential pain point, with colleagues in the sector telling us that audit and review activity has seen ATO staff ask for additional substantiation to prove the logbook provided as evidence for motor vehicle claims is, in fact, a true and correct record.

Lastly, and you will already know this if you’re following us on Instagram, Intuit QuickBooks has found that small and medium business owners risk losing approximately $948 million in unclaimed expenses this year due to lost or damaged receipts. Don’t let that be you! If you need help with recordkeeping, please let us know.

Unclaimed Money Registers

A quick reminder that various Australian Government departments are holding over $2 billion in unclaimed payments and abandoned funds, some of which may well be yours. 

Unclaimed money arises in situations where people move homes and forget to update their address details with companies and other service / benefit providers, meaning that any money due to them cannot be subsequently paid. In such situations, the monies are eventually forwarded to the relevant jurisdictions’ unclaimed money caretaker and listed on publicly available websites for people to search and find. 

Some of the most common unclaimed money databases include:

Let us know if you find anything. Good luck!

2024/25 State and Federal Budgets

On 9 May 2024, Western Australia Treasurer Rita Saffioti handed down her first budget, announcing a sixth consecutive operating surplus of $3.2 billion in 2023/24, an amount in line with previous estimates. A further operating surplus of $2.6 billion is projected for 2024/25.

WA will provide $400 electricity credits for all households and small businesses beginning 1 July 2024. Additional energy bill relief will be provided to those most in need, including $734 of support for pensioners and at least $1,086 for eligible families.

The Vacant Property Rental Incentive Scheme, comprised of $5 million for $5,000 payments, will incentivise owners of vacant homes to make them available on the rental market.

An additional $195 million will be invested in training, including $85 million to expand the capacity of our construction workforce and a further $8 million to continue Free TAFE courses.

For more information, please see the Our State Budget website

On 14 May 2024, Federal Treasurer Jim Chalmers announced Australia’s 2023/24 surplus had increased to $9.3 billion but was expected to decline to a deficit of $28.3 billion in 2024/25, driven primarily by the upcoming Stage 3 tax cuts. 

For businesses generally, the Government’s Future Made in Australia Framework (PDF, 596KB) will encourage private investment in net zero transformation and strengthen Australia’s domestic economic resilience. 

For small and medium businesses, an extension of the $20,000 instant asset write-off until 30 June 2025 has finally been legislated in the recent Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. The Small Business Energy Incentive has also now been legislated, offering an extra 20% tax deduction on energy-efficient business upgrades valued at up to $100,000. Additionally, a $325 electricity rebate for eligible businesses will be forthcoming in quarterly instalments from 1 July 2024.

From 1 July 2024, the Government will decrease the overall levy rate on sweet potatoes from 1.5% to 0.5%.

For foreign residents, the capital gains tax (CGT) regime will be amended to broaden the type of assets subject to CGT. Amodified 365-day principal asset testing period will also be introduced.  

For students, a backdated measure, from 1 June 2023, indexation applied to HECS-HELP debts will be the lower of the Consumer Price Index (CPI) or the Wage Price Index. Once legislation passes, students will receive an automatic indexation credit for indexation applied in 2023 and 2024. To work out what this might mean for you, the ATO has helpfully put together an Indexation Credit Estimator.

For parents, the Superannuation Guarantee will be paid on Paid Parental Leave payments from 1 July 2025 at the 1 July 2025 rate of 12%.

Lastly, for anyone with a substantial nest egg, a 30% tax on super earnings on balances above $3 million will apply from 1 July 2025.

More information is available on the Budget 2024-25 website.

For more information or assistance with anything you’ve read here today, please email or phone us on (08) 9221 4100. We’re here to help.