Practice Update March 2024

Ian Campbell • 4 March 2024

Practice Update March 2024

Super contribution caps to rise


The big news story for those contributing to super is that the contribution caps are set to increase from the 2025 income year.


  • The concessional contribution cap will increase from $27,500 to $30,000.

This 'CC' cap is broadly applicable to employer super guarantee contributions, personal deductible contributions and salary sacrificed contributions.

  • The non-concessional contribution cap will increase from $110,000 to $120,000.

        This 'NCC' cap is generally applicable to personal non-deductible contributions.


The increase in the NCC cap also means that the maximum available under the three-year bring forward provisions will increase from $330,000 to $360,000. This is provided that the 'bring forward' is triggered on or after 1 July 2024.

The 'total superannuation balance' threshold for being able to make non-concessional contributions (and the pension general transfer balance cap) will remain at $1.9 million.

 

Small business concessions


The ATO has recently issued a reminder that small business owners may be eligible for concessions on the amount of tax they ultimately pay. 

This depends on their business structure, their industry and their aggregated annual turnover.

For example, small business owners who have an aggregated annual turnover of less than:


  • $2 million can access the small business CGT concessions;
  • $5 million can access the small business income tax offset; and
  • $10 million can access the small business restructure roll-over.


The ATO expects small business owners to check their eligibility each year before they apply for any of these concessions.

Furthermore, taxpayers generally need to keep records for five years to prove any claims they make. 

Editor: We are always on the look-out for what tax concessions may be of use to our clients based on their individual circumstances. These small business concessions in particular, can be very beneficial when applicable. 

 


 

FBT time is fast approaching!

The ATO has advised employers that 'FBT time' is just around the corner, and they need to stay on top of their fringe benefits tax (FBT) obligations.

Employers need to ensure they have attended to the following matters this FBT time:

  • Identify if they have an FBT liability regarding fringe benefits they have provided to their employees or their associates between 1 April 2023 and 31 March 2024.
  • Identify if they have an FBT liability as they will need to lodge an FBT return and pay the amount due by 21 May.
  • Identify if they are currently registered for FBT and let the ATO know if they do not need to lodge an FBT return (Editor: by asking us to lodge an FBT non-lodgment notice) to prevent the ATO seeking a return from them at a later date.
  • Employers should also remember that when the new FBT year starts on 1 April, they can choose to use existing records instead of travel diaries and declarations for some fringe benefits.



Furthermore, the ATO has released PCG 2024/2 which provides a short cut method to help work out the cost of charging electric vehicles ('EV') at an employee's home for FBT purposes. 

Eligible employers can choose to use either the EV home charging rate of 4.2 cents per kilometre or the actual cost.

Ultimately, all employers need to make sure they understand their FBT obligations and the records they need to keep to avoid an FBT liability.

 

Jail sentence for fraudulent developer


A developer who conspired to lodge fraudulent business activity statements has been convicted and sentenced to 10 years in jail with a non-parole period of six years and eight months.

The developer was involved with two companies that formed part of a group known as the 'Hightrade Group' which developed properties such as a hotel and golf course in the Hunter Valley, NSW.

The developer fraudulently obtained GST refunds by using three tiers of companies (developers, building companies and suppliers) to grossly inflate the construction costs of his developments. 

The companies he was involved with also claimed to have purchased goods when no such purchases had occurred. In total, the developer intended to cause a loss to the Commonwealth of more than $15 million.

His sentencing has closed a complex case, known as Operation 4. The ATO noted that "Tax crime, like the fraud uncovered in Operation 4, affects the whole community."


 

Penalties soon to apply for overdue TPARs


Businesses that pay contractors to provide certain services may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year.

From 22 March, the ATO will apply penalties to businesses that:

  • have not lodged their TPAR from 2023 or previous income years;
  • have received three reminder letters about their overdue TPAR.

Taxpayers that do not need to lodge a TPAR can submit a 'non-lodgment advice form'. Taxpayers that no longer pay contractors can also use this form to indicate that they will not need to lodge a TPAR in the future.

 

Avoiding common Division 7A errors


Private company clients who receive payments, benefits or loans from their private companies need to ensure compliance with their additional tax obligations (which are often referred to as their 'Division 7A' obligations).

There are multiple ways in which business owners may access private company money, such as through salary and wages, dividends, or what are known as complying Division 7A loans.

Division 7A is an area where the ATO sees many errors and the ATO is currently focused on assisting taxpayers in managing their obligations when receiving payments and benefits from their private companies.

In this regard, the ATO has recommended that business owners do the following:


  • keep adequate records;
  • properly account for and report payments and use of company assets by shareholders and associates; and
  • comply with rules around Division 7A loans.


Understanding these Division 7A obligations is essential in order to:


  • make informed decisions when receiving private company money and using private company assets; and
  • avoid unexpected and undesirable tax consequences.

Practice Update February 2026

11 February 2026
Readiness strategies in preparation for the Payday Super If you run a small business, paying Superannuation can feel like “one more admin job” on top of payroll, BAS and everything else. Two key changes mean Superannuation deserves a fresh look this year: The Super Guarantee (SG) rate is 12% for 1 July 2025 to 30 June 2026 (and remains 12% after that). From 1 July 2026, “Payday Super” starts — employers will be required to pay SG on payday , rather than quarterly, and contributions must be paid into the employee’s fund within 7 days of payday . What does SG at 12% mean in everyday terms? SG is calculated on an employee’s Ordinary Time Earnings (OTE) (often the base rate and ordinary hours, plus certain loadings/allowances depending on how they’re paid). The key point for most businesses is that the Superannuation cost is now 12 cents for every $1 of OTE. If you haven’t already, it’s worth confirming whether your staff packages are “plus super” (super on top) or “inclusive of super” (rare, but it happens). A small misunderstanding here can quietly create underpayments. What is “Payday Super” and why is it changing? Many employers pay the Superannuation Guarantee (SG) quarterly. Payday Super changes the rhythm: From 1 July 2026 , each time you pay OTE to an employee, it creates a new super payment obligation for that payday. You’ll have a 7-day due date for the SG to arrive in the employee’s fund after each payday (this is designed to allow time for payment processing). The ATO is implementing the change, and guidance is already being published to help employers prepare. This reform is aimed at reducing unpaid super and making it easier for workers to see whether super has actually been paid, closer to when they’re paid wages. Quarterly vs payday Super

Practice Update January 2026

20 January 2026
A real-world case study on trust distributions Mark and Lisa had what most people would describe as a “pretty standard” setup. They ran a successful family business through a discretionary trust. The trust had been in place for years, established when the business was small and cash was tight. Over time, the business grew, profits improved, and the trust started distributing decent amounts of income each year. The tax returns were lodged. Nobody had ever had a problem with the ATO. So naturally, they assumed everything was fine. This is where the story starts to get interesting. Year one: the harmless decision In a good year, the business made about $280,000. It was suggested that some income be distributed to Mark and Lisa’s two adult children, Josh and Emily. Both were over 18, both were studying, and neither earned much income. On paper, it made sense. Josh received $40,000. Emily received $40,000. The rest was split between Mark, Lisa, and a company beneficiary. The tax bill went down. Everyone was happy. But here’s the first quiet detail that mattered later. Josh and Emily never actually received the money. No bank transfer. No separate accounts. No conversations about what they wanted to do with it. The trust kept the funds in its main business account and used them to pay suppliers and reduce debt. At the time, nobody thought twice. “It’s still family money.” “They can access it if they need it.” “We’ll square it up later.” These are very common thoughts. And this is exactly where risk quietly begins. Year two: things get a little more complicated The next year was even better. They used a bucket company to cap tax at the company rate. Again, a common and legitimate strategy when used properly. So the trust distributed $200,000 to the company. No cash moved. It was recorded as an unpaid present entitlement. The idea was that the company would get paid later, when cash flow allowed. Meanwhile, the trust needed funds to buy new equipment and cover a short-term cash squeeze. The trust borrowed money from the company. There was a loan agreement. Interest was charged. Everything looked tidy on paper. From the outside, it all seemed sensible. But economically, nothing really changed. The trust made money. The trust kept using the money. The same people controlled everything. The bucket company never actually used the funds for its own business or investments. This detail becomes important later. Year three: circular money without anyone realising By year three, things had become routine. Distributions were made to the kids again. The bucket company received another entitlement. Loans were adjusted at year-end through journal entries. What is really happening is a circular flow. Money was being allocated to beneficiaries, then effectively coming back to the trust, either because it was never paid out or because it was loaned back almost immediately. No one was trying to hide anything. No one thought they were doing the wrong thing. They were just following what they’d always done. This is how section 100A issues usually arise. Slowly, quietly, and without any single dramatic mistake.

Practice Update December 2025

3 December 2025
Rental deductions maximisation strategies