March Update

$20,000 instant asset write-off extended

The Government recently passed legislation to extend the $20,000 instant asset write-off for small businesses by 12 months to 30 June 2026.

Taxpayers should note that if their business has an aggregated annual turnover of less than $10 million, they may be able to use the instant asset write-off ('IAWO') to immediately deduct the business portion of the cost of eligible assets which cost less than $20,000.

Eligible assets must basically have been first used (or installed ready for use) between 1 July 2025 and 30 June 2026.  The $20,000 limit applies on a per asset basis, so taxpayers can instantly write-off multiple assets.

The IAWO can be used for both new and second-hand assets (but some exclusions and limits apply).

Please contact our office if you require assistance regarding the above, including in relation to also claiming deductions for improvement costs for certain assets.

Businesses using cash to dodge obligations

The ATO is 'cracking down' on businesses that use cash to avoid meeting their tax, employer and business obligations.  Businesses that do this may:

-   fail to report all sales transactions and fail to issue receipts;

-   avoid paying GST, income tax, PAYG withholding, super guarantee, insurance and work cover protection;

-   report their income below the $75,000 threshold to avoid registering for GST;

-   exploit workers by not meeting award conditions and work cover protections; or

-   undercut honest businesses by offering cheaper prices for cash.

The ATO warns that workers who are paid cash-in-hand or working 'off the books' are often disadvantaged.  Apart from not receiving the entitlements they should be, if they are injured at work, they may not be protected.

Contractors omitting income

Through data matching, the ATO is seeing some contractors incorrectly reporting or omitting contractor income.  Contractors need to report all their income in their tax return, including payments made by businesses for their contracting work.

Note that, as part of the taxable payments reporting system ('TPRS'), certain businesses must lodge a 'Taxable payments annual report' ('TPAR') to report payments made to contractors for providing the following services:

-    building and construction;

-    courier;

-    cleaning;

-    information technology;

-    road freight; and

-    security, investigation or surveillance.

For taxpayers who work as a contractor and provide any of these services, the business they contract to should be reporting those payments to the ATO on their TPAR.  Contractors obviously then need to include this income on their tax return.

If the ATO suspects a contractor may have omitted TPRS income on their tax return, it may contact them to request they amend their tax return.  If the contractor does not take action, the ATO may conduct a review and audit of their business, and penalties and interest may apply.

Government payments programs

The ATO is reminding taxpayers that receive government payments for delivering services under a Commonwealth program, such as healthcare, disability support or child care, that they have an obligation to:

-   keep accurate records; and

-   report any such income they receive in their tax return.

The ATO recently advised that it would be contacting taxpayers and tax agents in February by email to ensure that income received from government agencies (such as the Aged Care Subsidy or under the National Disability Insurance Scheme) is reported correctly in their tax returns.

The ATO has updated its Government Payments Program data-matching program protocol to better detect non-compliance, and work more effectively with other government entities.

Check GST credit claims before lodging BASs

Taxpayers who are registered for GST can claim GST credits (or 'input tax credits') for the GST included in the price of goods and services they buy for their business.

However, if they buy something for both business and private use, they need to apportion their GST credit to only claim the business use.

For example, if they buy a car for ride-sourcing (e.g., to use as an Uber driver), they should work out the percentage they use it for business purposes and only claim a GST credit on that amount.

Please contact our office if you require assistance with any of this, including potentially using 'annual private apportionment' to account for the private portion of your business purchases.

When completing their next BAS, the ATO is asking taxpayers to remember that they cannot claim GST credits for purchases:

-   where they do not have a tax invoice;

-   that were cancelled or reversed; or

-   that do not have GST in the price (such as bank fees).

Taxpayers that have nothing to report still need to lodge a 'nil' BAS by the due date.

Work-related expense claims rejected by ART

The Administrative Review Tribunal ('ART') recently disallowed a taxpayer's claims for many different types of work-related expenses.

The taxpayer was employed full-time as an engineer, working from home two days a week.  For the 2023 income year, he claimed deductions totalling over $61,000, in relation to (among other things) car expenses, travel expenses, clothing expenses, and home office expenses, all of which he claimed were work-related. 

The ATO largely disallowed these deductions, and the ART affirmed the ATO's decision, primarily due to problems with substantiating these claims.

For example, in relation to the car expenses, the ART noted that none of the log books were contemporaneous, and the log book entries were inconsistent with independent records (e.g., car service records).

In relation to travel expenses (taxi and Uber fares), the ART noted that the taxpayer did not provide evidence clearly identifying which travel expenses had been reimbursed by his employer, and the ride share documentation did not include the date, time or destination of travel.

In relation to home office utility expenses, the ART noted that the taxpayer only provided calculations estimating the business use proportion of those expenses, without providing any documentary evidence to substantiate the expenses themselves.In any case, the ART was not satisfied that the taxpayer's apportionment of those expenses was fair and reasonable.

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

Practice Update - Mandating Cash Acceptance, Paying Super Guarantee & More

Mandating cash acceptance

The Government recently announced that it was delivering on its commitment "to mandate cash acceptance for essential purchases by finalising regulations that require fuel and grocery retailers to accept cash from 1 January 2026."

The changes mean that, from 1 January 2026, most food and grocery retailers must accept cash for in-person transactions of $500 or less between 7am and 9pm.

Small businesses with aggregate annual turnover under $10 million are generally exempted from this mandate.  However, this mandate still applies to small businesses that choose to share a trademark with a large retailer.

The Government noted that, in addition to the cash mandate for fuel and groceries, consumers also already have the option to pay their bills, including utilities, phone bills and council rates, in cash at their local Australia Post outlet through Post Billpay.

The Government will review this mandate after three years, to ensure it is functioning as intended.

ATO child support data-matching program

The ATO has advised that it will acquire child support data from Services Australia for the 2025 to 2027 income years, including the following:

-      client identification details (names, addresses, phone numbers, and dates of birth); and

-      child support details (child support identification reference number, child support role type, and child support category).

The ATO estimates that records relating to up to 300,000 individuals will be obtained each financial year, which will be matched against ATO records.

The objectives of this program are to (among other things):

-       allow Services Australia to more accurately assess child support obligations, and maximise opportunities to collect child support debts; and

-       identify and educate individuals who may be failing to meet their lodgment obligations and help them to finalise their lodgment obligations, or notify the ATO that an income tax return is not required.

Time limits on GST and fuel tax credit claims

Taxpayers should note that GST credits and fuel tax credits will expire if not claimed within the 4-year credit time limit (i.e., generally four years from the due date of the original BAS in which the taxpayer could have claimed them).

Once credits expire, the ATO has no discretion or ability to amend the assessment to include those credits.

The 4-year credit time limit is different to the period of review and applies more strictly.

There may be situations where the ATO is able to amend for overpaid or underpaid GST or overclaimed credits, but additional credits cannot be included in an amendment assessment.

If credits are near expiry, instead of writing to request an amendment, taxpayers should consider:

-      claiming the credits in their next BAS that is still within the 4-year credit time limit;

-      requesting the amendment by lodging a revised BAS for the tax period to which the credits are attributable (these are generally processed faster than amendment requests in other forms); or

-      lodging a valid objection against their assessment for the period to which the GST credits are attributable before the end of the 4-year credit time limit.

If you identify any unclaimed input tax credits, we can assist with actioning the above options to try and ensure the credits are not lost.

Taxpayer's dog breeding activities held to be an enterprise

The Administrative Review Tribunal ('ART') recently held that a taxpayer had carried on an enterprise of dog breeding for GST purposes.

He had lodged activity statements for the quarters ended 30 September 2018 to 31 December 2021 inclusive, claiming input tax credits ('ITCs') for the dog breeding activities he carried on from his home (among other activities).

The ATO disallowed the taxpayer's claims for the above periods, arguing that enterprises were not carried on, and that there was a lack of appropriate substantiation (among other reasons).

The ART however held that the taxpayer's dog breeding operation was an enterprise for GST purposes, noting that his activities had "the necessary commercial character."  Therefore, the taxpayer was entitled to ITCs for that enterprise.

However, the ART affirmed the ATO's decision to reduce the taxpayer's other ITC claims, such as in relation to stamp duty on the acquisition of a property and for café and grocery expenses.

The ART also admonished the taxpayer for apparently using artificial intelligence in the presentation of his case, as he appeared to rely on cases and principles that did not exist.

Paying super guarantee

The ATO is reminding employers that they must pay super guarantee ('SG') contributions for eligible employees.

Employers need to pay a minimum of 12% (the current SG rate as from 1 July 2025) of each employee's ordinary time earnings into a complying super fund on a quarterly basis (the due date for the March 2026 quarter is 28 April 2026).

In most cases, employees can choose the super fund.

Employers who do not pay in full, on time or to the correct super fund will have to pay the SG charge, which is made up of the super they owe, nominal interest on those amounts (currently 10%), and an administration fee of $20 per employee, per quarter.

These payments must be made through SuperStream (where super payments and information move through the system electronically).

Employers who use the Small Business Superannuation Clearing House to make super contributions should note that this service will be permanently closed from 1 July 2026.  Existing users should switch to an alternative method to pay their employees' super guarantee.

Also, when new employees start, employers may have an extra step to take to comply with the 'choice of fund rules' if the new employee does not choose a super fund.  Employers may now need to request the new employee's 'stapled super fund' details from the ATO.

Tax dodgers banned from leaving the country

The ATO is actively using departure prohibition orders ('DPOs') as part of a broader shift towards strengthening payment performance and debt collection.  A DPO is an enforcement action available to the ATO to prevent certain persons with tax liabilities from leaving Australia without paying their outstanding tax.

Since July 2025, the ATO has issued 21 DPOs, more than the total number issued in the entire financial year ended 30 June 2025.

The ATO notes that a taxpayer was recently prevented from boarding a flight in the early hours of the morning due to a DPO imposed because of deliberate non-payment of a significant debt.

November Update

Dual cab utes and FBT

The ATO wishes to dispel the 'common myth' that dual cab utes are automatically exempt from fringe benefits tax ('FBT').  If an employer provides dual cab utes to staff to complete their duties and the vehicle is available for personal use, then the benefit may be subject to FBT.

By understanding how their employees use their dual cab utes, employers can work out if FBT applies and meet their FBT obligations.

To qualify for an exemption, the dual cab ute must be an 'eligible vehicle'.  That is, it must be designed to carry a load of one tonne or more, or more than eight passengers (including the driver), or a load under one tonne and not primarily designed for carrying passengers.

The dual cab ute must also only be used for limited private use (i.e., minor, infrequent and irregular), such as the occasional trip to the tip or helping a mate move house.

If an employee's personal use of the dual cab ute does not meet both of the above exemption conditions, then the employer will be liable for FBT.

ATO reminder: Business expenses that can (and cannot) be claimed

Taxpayers can claim a tax deduction for most business expenses, provided they meet the ATO's three 'golden rules':

• The expense must be for business use, not for private use.

• If the expense is for a mix of business and private use, they can only claim the portion that is used for business.

• They must have records to prove their claim.

The ATO also wants business taxpayers to remember that there are some expenses that they cannot claim, including entertainment expenses, traffic fines, and expenses that relate to earning non-assessable income.

ATO's focus on small business

The ATO is 'detecting and addressing' recurring errors in specific industries when businesses have a turnover between $1 million and $10 million. 

These industries include property and construction (including builders, contractors and tradies), and professional, scientific and technical services (including engineering, design, IT and consulting professionals).

In these industries, the ATO continues to see recurring issues, including:

• omitted sales and income in BAS and tax returns, including income from related entities;

• overclaimed expenses and GST credits;

• private expenses incorrectly reported as business-related, or not properly apportioned between business and personal use;

• failure to register for GST when required;

• incorrect claims for the research and development (R&D) tax incentive offset, especially for activities that do not meet the eligibility criteria; and

• not seeking independent advice from a registered tax agent, particularly in head contractor/subcontractor arrangements.

By sharing the issues that it is seeing, the ATO hopes to help taxpayers running a small business in one of these (or other) industries to avoid common errors and get it right from the start.

New ATO Data-Matching Programs

The ATO acquires and uses data for pre-filling, detecting dishonest or fraudulent behaviour, and identifying areas where it can educate taxpayers to help them understand their tax obligations.

When data does not match, the ATO may contact tax agents and their clients to find out why.

Rental Income Data-Matching

Over the coming months, the ATO will be sending letters where its data indicates:

• tax returns including rental income may need to be lodged for specific years; or

• rental income should be included in previously lodged tax returns.

Editor: Please contact us if you receive such a letter.

Offshore Merchant Data-Matching Program

The ATO will acquire merchant data from the big four Australian banks (ANZ, Commonwealth Bank, National Australia Bank and Westpac) for the 2025 to 2027 income years.

The ATO estimates that records relating to approximately 9,000 offshore merchants will be obtained each financial year.

SMSF non-compliance with release authorities

Release authorities are documents issued by the ATO to super funds, authorising the release of money from a member's super account to pay specific liabilities, including in relation to excess concessional contributions, excess non-concessional contributions, and Division 293 tax assessments.

The ATO is seeing a rise in SMSFs that receive a release authority and are either:

• not responding within 10 business days as required; or

• responding incorrectly (i.e., either not releasing the requested amount, or failing to submit a release authority statement back to the ATO, or both).

Failure to meet these obligations may result in significant penalties for the fund.  SMSF trustees should make sure they have effective processes in place to respond to release authorities promptly and accurately.

GST held to apply to sales of subdivided lots

The Administrative Review Tribunal ('ART') recently held that some sales of subdivided farmland were subject to GST as they were made by the taxpayer in the course of carrying on an enterprise.

The taxpayer owned farmland near Adelaide.  He entered into an agreement with a developer, under which the developer sought rezoning and development approvals, carried out development works, and marketed the subdivided lots.

The taxpayer progressively gave the developer access to the property as required and signed documents where necessary, including contracts for the sale of the subdivided lots.  The taxpayer received 20% of the proceeds of sale progressively as sales of the subdivided lots were completed, with the developer receiving the remaining 80%.

The taxpayer argued that his role was passive, and that such rights as he had, and actions he took under the agreement with the developer, were of an administrative nature not amounting to a series of activities in the form of a business.

The ART disagreed, finding that the sales of the subdivided land were subject to GST as they were made in the course of carrying on an enterprise.

The ART noted that the taxpayer's activities "exhibited some of the well-known indicia of a business."

Amongst other factors, the taxpayer's activities in facilitating the implementation of the development agreement "had a degree of regularity and repetition", including allowing access to the land progressively as required, an ongoing obligation not to encumber or sell the land during the project, and the continuous signing of sales contracts and monitoring of sales returns.

ASIC warning about pushy sales tactics

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 'red 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.

ASIC Deputy Chair Sarah Court said the start of a new financial year was often the trigger for people to check their super fund's performance, and urged consumers to be extra cautious.

"When it comes to sales calls about super switching, there are some big red flags people should be alert to — being asked to make a quick decision is one of the most obvious.  Remember, a good deal won't vanish overnight."

She said that these calls "don't 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.

"If you are unsure or are feeling pressured, just hang up."

ATO warns of common Division 7A errors

The ATO reminds shareholders of private companies that understanding how Division 7A of the tax legislation applies is crucial to avoiding costly tax consequences when accessing the company's money or other benefits.

When Division 7A applies, the recipient of a payment, loan or other benefit can be deemed to have been paid an unfranked dividend that will be included in their assessable income.

While Division 7A can be complex, most errors the ATO sees that result in its application are simple in nature, including:

-     shareholders not recognising that a company's money is not their money, and they cannot access it for personal use without tax consequences;

-      loans being made without complying loan agreements; and

-      applying the wrong benchmark interest rate when calculating Division 7A loan repayments.

These errors are often the result of common myths about Division 7A and how it works.

To support taxpayers' understanding of their tax obligations when managing private company money, the ATO has launched new content: 'Division 7A Myths debunked' on its website.

This page debunks common myths about Division 7A, breaking them into topics such as 'business structure', 'record keeping', and 'payments to other entities'.

Taxpayers who need to lodge a TPAR

Taxpayers may need to lodge a Taxable payments annual report ('TPAR') 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 (although if their circumstances change they may need to lodge a TPAR).

Editor: 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.

Taxpayer's claim for travel expenses denied

In a recent decision, the Administrative Review Tribunal ('ART') 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 (employment) 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."

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

July Update

Changes to car thresholds from 1 July

The car limit for the 2026 income year is $69,674. This is the highest value that a taxpayer can use to calculate depreciation on a car where they use the car for work or business purposes and they first use or lease the car in the 2026 income year.

If a taxpayer is buying a car and the price is more than the car limit, the highest input tax (GST) credit they can claim (except in certain circumstances) is one-eleventh of the car limit.  For the 2026 income year, the highest input tax credit they can claim is $6,334 (i.e., one-eleventh of $69,674).

The luxury car tax ('LCT') threshold for the 2026 income year is $91,387 for fuel-efficient vehicles, and $80,567 for all other luxury vehicles.

Input tax credits need to be claimed within the four year time limit.  A taxpayer cannot claim an input tax credit for luxury car tax when they buy a luxury car, even if they use it for business purposes

Reminder of June 2025 Quarter Superannuation Guarantee ('SG')

Employers are reminded that employee super contributions for the quarter ending 30 June 2025 must be received by the relevant super funds by Monday, 28 July 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.

The SG rate has increased to 12% from 1 July 2025.

Taking charge of upcoming employer obligations

As the end of the financial year has just past, the ATO is reminding employers that they should check what they need to do and take note of the following upcoming key dates.

Pay as you go ('PAYG') withholding — From 1 July 2025, some withholding schedules and tax tables will be updated (but not all).

Employers should use the correct tax tables or the 'tax withheld calculator' on the ATO's website to work out how much to withhold from their employees' payments.  They should update their payroll software to withhold, report and pay the correct amount of tax.

Single touch payroll ('STP') reporting — Employers should complete an STP finalisation declaration by 14 July 2025, and also lodge a finalisation declaration for all employees they have paid and reported through STP, so they have the right information to lodge their income tax returns.

Employers should also 'finalise' all employees they have paid in the financial year, even those they have not paid for a while, such as terminated employees.

Finally, employers who change payroll software providers should finalise their records before they change, to ensure they and their employees have accurate information during tax time.

Editor: As noted above, employers also need to pay all SG contributions for the June 2025 quarter by 28 July 2025.

Notice of data exchange for skilled visa program compliance

The Department of Home Affairs will obtain data from the ATO to identify whether business sponsors are complying with their sponsorship obligations (e.g., paying visa holders correctly) and whether temporary skilled visa holders are complying with their visa conditions (e.g., to work only for an approved employer).

The Department will provide to the ATO biographical details (including name, address and date of birth) of clients who are, or were in the three most recent financial years, holders of Skills in Demand or Temporary Skills Shortage (subclasses 457 and 482) primary visas.

These details will be electronically matched against ATO data holdings.  Where there is an identity match, the ATO will return Single Touch Payroll employment data for the relevant individual(s) to the Department.

It is estimated that records will be shared relating to around 58,000 individuals.

TBAR for June quarter due 28 July

All SMSFs must report relevant transfer balance account ('TBA') events using transfer balance account reporting ('TBAR').  All events must be reported regardless of the member's total superannuation balance.

Editor: TBA events include starting or commuting a retirement phase pension.

TBARs for the June quarter are due by 28 July 2025.  If no TBA event occurred during the quarter, no lodgment is required.

If an SMSF does not lodge a TBAR by the due date, it may result in compliance action and penalties and could also negatively impact a member's TBA.

Beware of tax advice from 'finfluencers'

The Tax Practitioners Board ('TPB') warns that the number of 'finfluencers' is on the rise.  These are influencers who offer financial advice, including tax advice, on various social media platforms such as Instagram and TikTok.

Unfortunately, they do not always have the necessary qualifications to give out this advice or provide all the information taxpayers need to make a fully informed decision.  This can result in taxpayers suffering serious financial harm.

The main way 'finfluencers' make their money is by getting paid by companies that want to promote their financial products through the 'finfluencers' social media platform.

Therefore, taxpayers who are going to use someone to help them manage their tax affairs  should make sure they are registered with the TPB by checking the TPB Register.

Taxpayer's claim for home office and car expenses successful

The Administrative Review Tribunal ('ART') recently held that a taxpayer was entitled to claim deductions for home office and car expenses incurred during the COVID-19 pandemic.

The taxpayer was employed full time by the ABC producing the ABC Sport Digital Radio station ('Digital Role') and producing ABC live sports broadcasts, mainly NRL football ('Live Role').

During the 2021 income year, because of restrictions imposed in response to the COVID-19 pandemic, the taxpayer undertook all of his Digital Role from a second bedroom in his apartment (his home office) which he was renting with his wife, and he undertook most of his Live Role from the ABC's Southbank Studios in Melbourne.

The taxpayer claimed deductions for occupation expenses (being the proportion of rent for his apartment referable to the use of his home office in performing his Digital Role), and for car expenses incurred in driving between his home and the ABC studios at Southbank on days when he performed both roles.

The ART allowed the taxpayer's claims for occupation expenses in full, as the COVID-19 restrictions required him to earn most of his income at his home, and so a proportion of rent was incurred in gaining his assessable income.

The ART also allowed the car expenses in full on the basis that on the days when the taxpayer "closed his laptop at home, picked up his car keys and drove to the Southbank Studios . . . he was at work the entire time and his travel was therefore 'on work' . . ."

'Wild' tax deduction attempts

'Wild' tax deduction attempts

The ATO recently revealed some of the 'wild' work related expense tax claims people have tried to "put past" the ATO, including the following:

-   A mechanic tried to claim an air fryer, microwave, two vacuum cleaners, a TV, gaming console and gaming accessories as work-related.  The claim was denied as these expenses are personal in nature.

-   A truck driver tried to claim swimwear because it was hot when they stopped in transit and they wanted to go for a swim.  The claim was denied as these expenses are personal in nature.

-   A manager in the fashion industry tried to claim well over $10,000 in luxury-branded clothing and accessories to be well presented at work, and to attend events, dinners and functions.  The clothing was all conventional in nature and was not allowed.

This tax time. the ATO will be focused on areas where it sees frequent errors, including work-related expenses, working from home deductions, and in respect to multiple income sources.

Getting ready for business

The ATO advises new business owners that they need to understand their obligations to ensure they are "getting it right from the start."

These are the 'top 7 things' taxpayers need to know when starting a business.

-   They should use digital tools and maintain accurate records to help them manage daily activities and cash flow.

-   There are some registrations they will need to complete when they start a business (for example, registering for an ABN or a business name).

-   They can claim a tax deduction for most business expenses if the expense is directly related to earning their income.  Taxpayers should remember to keep records and only claim the business portion of mixed-use expenses.

-   The type of business structure they set up will affect their tax and registration requirements, so they need to choose the right business structure and understand their obligations.

-   If they are an employer, they should realise that they have extra responsibilities and obligations (e.g., super guarantee and Single Touch Payroll).

-   They need to lodge and pay their taxes on time.  They can prepay their estimated income tax liability through PAYG instalments.

-   Businesses that maintain accurate records, lodge and pay on time and avoid errors not only steer clear of penalties and general interest charge but also become more resilient when facing challenges.

Editor: If you need assistance with any of these issues, please contact our office.

Taxi service and ride-sourcing providers must be registered

Taxpayers that provide taxi, limousine or ride-sourcing services must register for GST regardless of their turnover. 

They must collect and pay GST and income tax on all their rides and all other business income.

The ATO is advising drivers in this industry who do not have a TFN, ABN or GST registration that they need to register now, and collect, report and pay GST on all their future rides. 

They also need to report all their income from their rides in their next tax return.

Penalties and interest may apply for drivers who do not register for GST. 

Drivers who have not declared all their income for ride-sourcing in prior years can amend a previous tax return.

Partial release from tax debt on serious hardship grounds

In a recent decision, the Administrative Review Tribunal ('ART') held that a taxpayer should be released from payment of part of his tax debt on the grounds of serious hardship.

As at the 2022 income year, the taxpayer had an accumulated tax debt of approximately $528,000, comprising income tax, late lodgment penalties, PAYG instalments, and the general interest charge  on the PAYG and unpaid income tax.

Much of the taxpayer's tax debt had arisen as a result of the taxpayer deriving income protection insurance payments from his insurer (which were assessable).  These payments had been made since around 2002, and arose from a serious injury the taxpayer had suffered in a fire at his restaurant business.

The ART noted that there were a number of  factors which weighed against the taxpayer, including his  failure to make payments to meet the tax debt and his 'extremely poor' tax compliance history.

However, the ART decided that some relief was justified, given the extent of hardship, concerns about the taxpayer's health, and recoverability time for the tax debt. 

The ART accordingly reduced the total tax debt (including penalties) to $250,000.

$20,000 instant asset write-off for 2024/25

Taxpayers who have purchased or are purchasing a business asset this financial year should remember that the instant asset write-off limit is $20,000 for the 2025 income year.

If a taxpayer's business has an aggregated annual turnover of less than $10 million and they use the simplified depreciation rules, they may be able to use the instant asset write-off to immediately deduct the business part of the cost of eligible assets, as follows.

-   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 1 July 2024 and 30 June 2025.

-   New and second-hand assets can qualify, although some exclusions and limits apply.

-   If the taxpayer claimed an immediate deduction for an asset's cost under the simplified depreciation rules in an earlier income year, they can also immediately claim a deduction the first time they incur a cost to make an improvement to that asset if it is incurred between 1 July 2024 and 30 June 2025 and less than $20,000.

-   The $20,000 limit applies on a per-asset basis, so taxpayers can instantly write off multiple assets as long as the cost of each asset is less than the limit.

The usual rules for claiming deductions still apply.  Taxpayers can only claim the business part of the expense, and they must have records to prove it.

Beware websites sharing fake news on super preservation age

The ATO is warning the community about a "proliferation of dodgy websites sharing fake news about changes to the superannuation preservation rules and withdrawal rules starting on 1 June."

ATO Deputy Commissioner Emma Rosenzweig confirmed the maximum preservation age (the age when an individual can access their superannuation savings on retirement) is 60 for anyone born from 1 July 1964.

May Update

How to manage business day-to-day transactions

The ATO has the following tips for small business owners "that can make your tax life easier":

• They should keep an eye on upcoming expenses, and regularly update their books and reconcile their accounts.

• They should set aside the GST they collect (e.g., by transferring it into another bank account within the business to keep it separate from their cash flow).

• They can also set their PAYG withholding and super aside, so they will have the funds available when payments are due.

• They should plan ahead and schedule time in their calendar to prepare their business activity statement ('BAS'), and lodge and pay their BAS on time.

Editor: If you need assistance with any of these issues, please contact our office.

Minimum pension drawdown reminder

An SMSF must pay a minimum amount each year to a member who is receiving an account-based pension.

This minimum amount is calculated by applying the relevant percentage factor based on the member's age by the member's pension account balance calculated as of 1 July 2024, or on a pro-rata basis if the pension commenced part way through the 2025 financial year.

If the minimum payment is not made by 30 June, this could result in adverse taxation consequences for the member.

How to avoid common CGT errors

The ATO wants taxpayers to know that having a foreign resident capital gains withholding ('FRCGW') clearance certificate does not mean they do not have any further CGT obligations.

If taxpayers have sold property, they still need to include capital gains, losses or an exemption or rollover code in their tax return.

Editor: If an amount of FRCGW was withheld from the property sale, you should let us know and provide the 'FRCGW payment confirmation' from the purchaser.

Where you have lived in a property for any period during your ownership period you should provide us with the full details so we can determine the correct application of the main residence exemption.

Keeping not-for-profit records up to date

Taxpayers should remember that they are legally required to keep certain records for their not-for-profit ('NFP'). 

All organisations including NFPs are required to keep accurate and complete records of all transactions relating to their tax and superannuation affairs.

Generally, for tax purposes, taxpayers must keep their records in an accessible form (either printed or electronic) for five years. 

Records that NFP taxpayers are required to keep include:

• governing documents;

• financial reports;

• documentation relating to grants; and

• registrations and certificates.

A good record keeping system will help taxpayers run their NFP successfully and manage their tax and super obligations.

If a taxpayer's NFP is endorsed as a deductible gift recipient ('DGR'), they must keep records that explain all  transactions and other acts relevant to their organisation's status as a DGR. 

This requirement applies to both endorsed DGRs and listed by name DGRs.

Increase to rate for working from home running expenses

PCG 2023/1 outlines the ATO's new method ('the fixed-rate method') for calculating additional running expenses while working from home, which has applied from 1 July 2022.

Editor: This  guideline was recently updated to increase the work from home fixed rate from 67 cents to 70 cents per hour from 1 July 2024.

The fixed-rate method allows taxpayers to claim at a rate of 70 cents per hour for the following additional running expenses for working from home:

• energy expenses (electricity and gas) for lighting, heating, cooling, and electronic items used while working from home;

• internet expenses;

• mobile and home phone expenses; and

• stationery and computer consumables.

However, PCG 2023/1 does not cover occupancy expenses relating to a home, such as rent, mortgage interest, property insurance and land tax.

Taxpayers are not required to use the above fixed-rate method — as from 1 July 2022, they can instead continue to claim the actual expenses they incurred as a result of working from home and keep all records necessary to substantiate their claim.

Truck driver entitled to claim meal expenses

In a recent decision, the Administrative Review Tribunal ('ART') upheld a truck driver's claim for meal expenses, notwithstanding that those expenses had not been fully substantiated.

The taxpayer was employed as a long-haul truck driver in Western Australia.  He was away from home for considerable periods each year.

The taxpayer sought a deduction for meal expenses of $32,782 in the 2021 income year, apparently calculated by multiplying the number of days he was away from home (310) by the maximum reasonable daily allowance under Taxation Determination TD 2020/5.

The ATO only allowed the taxpayer a deduction for meal expenses of $5,890 based on a review of his logbook, fatigue diary and bank statements.  This was an average of $19 per day multiplied by 310.

The ART found on the balance of probabilities that the taxpayer incurred the claimed expenditure, and it found that the taxpayer had met his burden of proof.

In this regard, the ART determined that the taxpayer incurred the disputed expenses in gaining or producing his assessable income, and it did not agree with the ATO that there was an insufficient linkage between the expenditure on bank statements and the taxpayer's work.

The ART held that the exception to the substantiation provisions applied to the taxpayer, as:

• a travel allowance was paid by the taxpayer's employer which covered the expenses;

• the taxpayer incurred the expenditure in gaining or producing his assessable income; and

• the expenditure fell within the ATO's reasonable travel amounts set out in TD 2020/5.

The ART accordingly allowed the taxpayer's claim for travel expenses in full.

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

March Update

How to master employer obligations in 2025

Taxpayers who employ staff should remember the following important dates and obligations:

Fringe benefits tax ('FBT')

31 March 2025 marks the end of the 2024/25 FBT year.  Employers should remember the following regarding their FBT tax time obligations.

• They should identify if they have provided a fringe benefit.  If they have, they should determine the taxable value to work out if they have an FBT liability.

• They should lodge an FBT return and pay any FBT owed by 21 May 2025.  If their registered tax agent lodges electronically for them, they have until 25 June 2025.

• They should keep the right records to support their FBT position.

Pay as you go ('PAYG') withholding

Taxpayers need to withhold the right amount of tax from payments they make to their employees and other payees, and pay those amounts to the ATO.

Single touch payroll ('STP')

Employers should finalise their STP data by 14 July 2025 for the 2024/25 financial year (there may be a later due date for any closely held payees).

Super guarantee ('SG')

• 28 January, 28 April, 28 July and 28 October are the quarterly due dates for making SG payments;

• The SG rate is currently 11.5% of an employee's ordinary time earnings.  From 1 July 2025, it will increase to 12%.

• Taxpayers should ensure SG for their eligible employees is paid in full, on time and to the right super fund, otherwise they will be liable for the SG charge.
  
  

ATO's tips to help taxpayers stay on top of their BAS

The ATO has the following tips to help taxpayers get their BAS right before they lodge:

• They should make sure they enter the figures for their obligations at the correct label, and only complete applicable fields.

• If lodging online, or through a registered tax or BAS agent, they may be able to get an extra 2 or 4 weeks to lodge and pay.

• If they have nothing to report for the period, they can lodge a 'nil' BAS online by selecting 'Prepare' and then 'Prepare as nil', or they can call the ATO's automated service "any time of the day".

• If they made a mistake on their last BAS, instead of lodging a revision, they may be able to use their current BAS to fix it.  For example, they can use label 1A to adjust GST on sales, or label 1B to adjust GST on purchases.

• They can also use their BAS to vary an instalment amount.
  
  

Claiming fuel tax credits when rates change

Fuel tax credits changed on 3 February, and taxpayers could receive more savings for fuel they have acquired on and from this date.  Different rates apply based on the type of fuel, when it was acquired and what activity it is used for.

The ATO has the following tips for taxpayers to ensure they are claiming correctly.

• They can use the ATO's 'eligibility tool' on its website to find out if they can claim fuel tax credits for fuel they have acquired and used.

• They can use the ATO's online fuel tax credit calculator (which should automatically apply the right rate) to work out their claim.

• They can lodge their BAS via Online services or a registered tax or BAS agent (lodging via an agent can allow them extra time to lodge and pay).

ATO "busts" NFP myths

Editor: As the Not-for-profit ('NFP') self-review return is due in March, the ATO has recently published a document 'busting' various NFP 'myths'.

Myth 1: All NFPs are income tax exempt.

ATO response: This is not true.  Some NFPs are income tax exempt and some are taxable.

Myth 2: There is only one way to lodge the NFP self-review return.

ATO response: There are three ways, as follows:

• A 'principal authority' may be able to lodge using 'Online services for business';

• It may be possible for the return to be lodged by phoning the ATO's automated self-help phone service on 13 72 26; and

• A registered tax agent can lodge the return through Online services for agents.

Myth 3: Anyone can lodge the NFP self-review return online.

ATO response: If lodging via Online services for business, anyone authorised to access the return in Online Services can lodge.  If a registered tax agent has been engaged, they can also prepare and lodge the return in Online services for agents.

Myth 4: If a person is unsure whether their NFP has charitable purposes, then they do not need to lodge.

ATO response: The self-review return still needs to be lodged, even if it is not certain whether the NFP is charitable.

Taxpayer's claim for input tax credits unsuccessful

In a recent decision, the Administrative Review Tribunal ('ART') rejected a taxpayer's claim for input tax credits on the basis that all the relevant GST returns (i.e., BASs) were lodged out of time.

For the GST periods from 1 October 2015 to 31 March 2017, the taxpayer filed each of her GST returns more than four years after they were due.  The taxpayer still claimed input tax credits totalling over $10,000 for this period.

The ATO disallowed this claim, on the basis that none of the input tax credits were claimed within the four year period, as required by the GST Act.

The ART upheld the ATO's decision, noting that, as the taxpayer did not file the GST returns within the four year period "she did not have input tax credits taken into account . . . As a consequence, . . . (she) simply ceased to be entitled to those input tax credits."

ATO's appeal against decision that UPEs are not "loans" fails

The Full Federal Court recently dismissed the ATO's appeal against an AAT decision that unpaid present entitlements ('UPEs') owing by a trust to a corporate beneficiary were not "loans" for Division 7A purposes.

A corporate beneficiary had become entitled to a share of the income of a trust for the 2013 to 2017 income years.  Parts of these entitlements remained outstanding, resulting in UPEs.  The ATO treated these UPEs as loans from the corporate beneficiary back to the trust (and, in consequence, as "deemed dividends" made to the trust).

The AAT held at first instance that a loan had not been made in this case.

The Full Federal Court upheld the AAT's decision, noting that a loan for Division 7A purposes requires an obligation to repay an amount, not merely the creation of an obligation to pay an amount (such as when a trust distributes income to a beneficiary).

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

How to master employer obligations in 2025

 How to master employer obligations in 2025

Taxpayers who employ staff should remember the following important dates and obligations:

Fringe benefits tax ('FBT')

31 March 2025 marks the end of the 2024/25 FBT year.  Employers should remember the following regarding their FBT tax time obligations.

-  They should identify if they have provided a fringe benefit.  If they have, they should determine the taxable value to work out if they have an FBT liability.

-   They should lodge an FBT return and pay any FBT owed by 21 May 2025.  If their registered tax agent lodges electronically for them, they have until 25 June 2025.

-   They should keep the right records to support their FBT position.

Pay as you go ('PAYG') withholding

Taxpayers need to withhold the right amount of tax from payments they make to their employees and other payees, and pay those amounts to the ATO.

Single touch payroll ('STP')

Employers should finalise their STP data by 14 July 2025 for the 2024/25 financial year (there may be a later due date for any closely held payees).

Super guarantee ('SG')

-   28 January, 28 April, 28 July and 28 October are the quarterly due dates for making SG payments;

-  The SG rate is currently 11.5% of an employee's ordinary time earnings.  From 1 July 2025, it will increase to 12%.

-   Taxpayers should ensure SG for their eligible employees is paid in full, on time and to the right super fund, otherwise they will be liable for the SG charge.

ATO's tips to help taxpayers stay on top of their BAS

The ATO has the following tips to help taxpayers get their BAS right before they lodge:

-   They should make sure they enter the figures for their obligations at the correct label, and only complete applicable fields.

-   If lodging online, or through a registered tax or BAS agent, they may be able to get an extra 2 or 4 weeks to lodge and pay.

-   If they have nothing to report for the period, they can lodge a 'nil' BAS online by selecting 'Prepare' and then 'Prepare as nil', or they can call the ATO's automated service "any time of the day".

-   If they made a mistake on their last BAS, instead of lodging a revision, they may be able to use their current BAS to fix it.  For example, they can use label 1A to adjust GST on sales, or label 1B to adjust GST on purchases.

-   They can also use their BAS to vary an instalment amount.

Claiming fuel tax credits when rates change

Fuel tax credits changed on 3 February, and taxpayers could receive more savings for fuel they have acquired on and from this date.  Different rates apply based on the type of fuel, when it was acquired and what activity it is used for.

The ATO has the following tips for taxpayers to ensure they are claiming correctly.

-   They can use the ATO's 'eligibility tool' on its website to find out if they can claim fuel tax credits for fuel they have acquired and used.

-   They can use the ATO's online fuel tax credit calculator (which should automatically apply the right rate) to work out their claim.

-   They can lodge their BAS via Online services or a registered tax or BAS agent (lodging via an agent can allow them extra time to lodge and pay).

ATO "busts" NFP myths

Editor: As the Not-for-profit ('NFP') self-review return is due in March, the ATO has recently published a document 'busting' various NFP 'myths'.

Myth 1: All NFPs are income tax exempt.

ATO response: This is not true.  Some NFPs are income tax exempt and some are taxable.

Myth 2: There is only one way to lodge the NFP self-review return.

ATO response: There are three ways, as follows:

-   A 'principal authority' may be able to lodge using 'Online services for business';

-   It may be possible for the return to be lodged by phoning the ATO's automated self-help phone service on 13 72 26; and

-   A registered tax agent can lodge the return  through Online services for agents.

Myth 3: Anyone can lodge the NFP self-review return online.

ATO response: If lodging via Online services for business, anyone authorised to access the return in Online Services can lodge.  If a registered tax agent has been engaged, they can also prepare and lodge the return in Online services for agents.

Myth 4: If a person is unsure whether their NFP has charitable purposes, then they do not need to lodge.

ATO response: The self-review return still needs to be lodged, even if it is not certain whether the NFP is charitable.

Taxpayer's claim for input tax credits unsuccessful

In a recent decision, the Administrative Review Tribunal ('ART') rejected a taxpayer's claim for input tax credits on the basis that all the relevant GST returns (i.e., BASs) were lodged out of time.

For the GST periods from 1 October 2015 to 31 March 2017, the taxpayer filed each of her GST returns more than four years after they were due.  The taxpayer still claimed input tax credits totalling over $10,000 for this period.

The ATO disallowed this claim, on the basis that none of the input tax credits were claimed within the four year period, as required by the GST Act.

The ART upheld the ATO's decision, noting that, as the taxpayer did not file the GST returns within the four year period "she did not have input tax credits taken into account . . . As a consequence, . . . (she) simply ceased to be entitled to those input tax credits."

ATO's appeal against decision that UPEs are not "loans" fails

The Full Federal Court recently dismissed the ATO's appeal against an AAT decision that unpaid present entitlements ('UPEs') owing by a trust to a corporate beneficiary were not "loans" for Division 7A purposes.

A corporate beneficiary had become entitled to a share of the income of a trust for the 2013 to 2017 income years.  Parts of these entitlements remained outstanding, resulting in UPEs.  The ATO treated these UPEs as loans from the corporate beneficiary back to the trust (and, in consequence, as "deemed dividends" made to the trust).

The AAT held at first instance that a loan had not been made in this case.

The Full Federal Court upheld the AAT's decision, noting that a loan for Division 7A purposes requires an obligation to repay an amount, not merely the creation of an obligation to pay an amount (such as when a trust distributes income to a beneficiary).

ATO debunks Division 7A 'myths'

CGT withholding measures now law

The Government recently passed legislation making changes to the foreign resident capital gains withholding laws (among other changes).

Editor: Foreign resident capital gains withholding is relevant for all vendors selling certain taxable real property (e.g., Australian land).

Even Australian residents can be caught by these laws because, if they do not have a valid 'clearance certificate' issued by the ATO at, or before settlement, tax must be withheld from the sale proceeds by the purchaser and paid to the ATO.

The new legislation increases the foreign resident capital gains withholding rate to 15% (from 12.5%), and completely removes the threshold (currently $750,000) before which withholding applies.

This means that all disposals of taxable real property are potentially subject to foreign residents' capital gains withholding requirements regardless of the market value of the CGT asset.

These amendments take effect from 1 January 2025.

ATO debunks Division 7A 'myths'

Editor: The ATO has recently published a document 'debunking' various Division 7A 'myths'.

Division 7A of the tax legislation is intended to prevent profits or assets being provided to shareholders or their associates tax free.

A payment or other benefit provided by a private company to a shareholder or their associate can be treated as a dividend for income tax purposes under Division 7A, even if the participants treat it as some other form of transaction (such as a loan, advance, gift or writing off a debt).

Division 7A can also apply if a trust has allocated income to a private company but has not actually paid it, and the trust has provided a payment or benefit to the company's shareholder or their associate (as well as in other circumstances).

Myth 1: If I own a company, I can use the company  money any way I like.

ATO response: A company is a separate legal entity, and there will be consequences every time the taxpayer takes money or accesses other benefits from their private company.

Myth 2: Division 7A only applies to the shareholders of my private company.

ATO response: Division 7A applies to both shareholders and their 'associates'.  The definition of an 'associate' is broad.

Myth 3:  I don't need to keep records when my private company makes payments, loans or provides other benefits to other entities.

ATO response: Taxpayers are legally required to keep records of all transactions relating to their tax affairs when they are running a business.

Myth 4:  I can avoid Division 7A by temporarily repaying my loan before the private company lodges its tax return, and using the company’s money to make my repayments.

ATO response: A repayment made on a loan may not be taken into account if similar or larger amounts are reborrowed from the same company after making the repayment.

Myth 5: There are no tax consequences if I use my private company's money to fund another business or income earning activity.

ATO response: Division 7A may apply to any loan a private company makes to its shareholders or their associates, regardless of what the loan recipient uses the amounts for.

ATO's notice of rental bond data-matching program

The ATO will acquire rental bond data from State and Territory rental bond regulators bi-annually for the 2024 to 2026 income years, including details of the landlord and tenant, managing agent identification details, and rental bond transaction details.

The objectives of this program are to (among other things) identify and educate individuals and businesses who may be failing to meet their registration or lodgment obligations.

The ATO expects to collect data on approximately 2.2 million individuals each financial year.

Study/training loans — What's new

The indexation rate for study and training loans is now based on the Consumer Price Index ('CPI') or Wage Price Index — whichever is lower. 

This change has been backdated to indexation applied from 1 June 2023 for all HELP, VET Student Loan, Australian Apprenticeship Support Loan, and other study or training support loan accounts.

Consequently, indexation rates for 2023 and 2024 have changed to:

-      3.2% for 1 June 2023 (reduced from 7.1%); and

-      4% for 1 June 2024 (reduced from 4.7%).

Individuals who had a study loan that was indexed on 1 June 2023 or 1 June 2024 do not need to do anything.

Individuals whose study loan is in credit after the adjustment may receive a refund for the excess amount to their nominated bank account, if they have no outstanding tax or Commonwealth debts.

When to lodge SMSF annual returns

All trustees of SMSFs with assets (including super contributions or any other investments) as at 30 June 2024 need to lodge an SMSF annual return ('SAR') for the 2023/24 financial year. 

The SAR is more than a tax return — it is required to report super regulatory information, member contributions, and pay the SMSF supervisory levy.

However, not all SMSFs have the same lodgment due date: 

-      Newly registered SMSFs and SMSFs with overdue SARs for prior financial years (excluding deferrals) should have lodged their SAR by 31 October 2024.

-      All other self-preparing SMSFs need to lodge their SAR by 28 February 2025 (unless the ATO has asked them to lodge on a different date).

-      For SMSFs that lodge through a tax agent, the due date for lodgment of their SAR is generally 15 May or 6 June 2025.

SMSFs that have engaged a new tax agent need to nominate them to confirm they are the authorised representative for the fund.

SMSF trustees must appoint an approved SMSF auditor no later than 45 days before they need to lodge their SAR.  Before they lodge, they must ensure that their SMSF's audit has been finalised and the SAR contains the correct auditor details.

Editor: If you need assistance with these or any other SMSF issues, please contact our office.

$13.6m in penalties imposed for false R&D claims

A joint investigation involving the ATO found that, between 2014 and 2017, a Sydney business coach promoted unlawful tax schemes encouraging clients to lodge over-inflated, inaccurate or unsubstantiated research and development ('R&D') tax incentive claims.

The Federal Court recently handed down judgment against the business coach, his company co-director (and former tax agent), and their related companies, ordering that the business coach pay a penalty of $4.5 million, in addition to $9 million in penalties for the related companies. 

The company co-director was also ordered to pay $100,000 for their role in promoting the schemes.