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From 1 July 2024, the rules for accessing superannuation became somewhat simplified: the preservation age when you can begin to access your benefits is now effectively age 60. However, until you reach age 65, there are still potential restrictions on how you can access your super. You’ll need to “retire” before you can make lump sum withdrawals from your super account or move it into the favourable “retirement phase” when investment earnings within the fund become tax-free. If you’re aged between 60 and 65 and wish to access some of your super, now is a good time to re-examine the rules. 60 is the new threshold For anyone born after 30 June 1964, preservation age is simply age 60. You may recall that some members could previously begin to access their superannuation at various stages between 55 and 59 years. Those lower preservation ages applied for older Australians who are now all over 60 and who have already attained their preservation age. Therefore, those rules regarding ages 55 to 59 are no longer an active consideration. How much super can I access? If you are between 60 and 65 years old but haven’t yet retired, you can commence a transition to retirement income stream (TRIS). This allows you to receive a regular income of between 4% and 10% of your pension account balance each year. If you want to access more of your super, or withdraw it as a lump sum, you’ll need to satisfy a further condition of release. This includes: reaching age 65; or “retirement”. Meeting these conditions also becomes relevant for tax purposes. While TRIS payments to a person aged 60 or over are generally tax-free – regardless of whether they are retired or not – the TRIS itself does not move into the “retirement phase” until a further condition such as retirement (or reaching age 65) is met. This means that while you may start a TRIS, the TRIS will not qualify for the tax exemption on the investment earnings from fund assets that support the TRIS until you meet one of those further conditions. What does “retirement” mean? To satisfy the “retirement” condition, the first key requirement is that an arrangement under which you were gainfully employed must have come to an end. If you had already reached age 60 when that position of gainful employment ended, there are no further requirements, and your future work intentions are not relevant. However, if you had not yet reached aged 60 when that position ended, the trustee of your fund must be reasonably satisfied that you intend never to again become gainfully employed, either on a full-time or a part-time basis. For these purposes, “part-time” means working for at least 10 hours per week. This means you could intend to work for less than 10 hours per week and still meet the “retirement” condition. Planning is key Any withdrawal strategy should be carefully planned beforehand to ensure you understand the implications of accessing your super. There are many factors to consider, such as: the ongoing requirement to withdraw minimum pension amounts each year if you start a pension; implications for your transfer balance account; and interaction with the Age Pension. Contact our office if you need help understanding your eligibility for accessing your super, or to begin a discussion about your long-term retirement planning.

The ATO has revealed its focus areas for this year, with business debt collection identified as a key strategic priority. In its Corporate Plan 2024–25, the ATO says that it will have “an increased focus on business debt including superannuation guarantee, pay as you go withholding and goods and services tax”. This is a timely reminder for all businesses to ensure they’re meeting their obligations. Superannuation guarantee (SG) remains an important compliance focus. The most recent ATO statistics show that although 94% of employers are meeting their SG obligations without ATO intervention, the ATO still raised over $1 billion in SG charge liabilities in the 2022–23 financial year. That figure reflects a lot of extra super liability for Australian businesses that could have been avoided if they had paid the required SG contributions on time. To ensure your business doesn’t incur these extra liabilities, you must pay SG contributions for your employees and eligible contractors on time and to the correct fund. The quarterly due dates are as follows: Q1 (1 July – 30 September): 28 October; Q2 (1 October – 31 December): 28 January; Q3 (1 January – 31 March): 28 April; and Q4 (1 April – 30 June): 28 July. Some important things to remember include: Some contracts and awards may require you to pay contributions more regularly than quarterly. If you make contributions to a commercial “clearing house”, the contribution is considered to be paid when it’s received by the employee’s fund, not by the clearing house. However, if you use the ATO’s Small Business Superannuation Clearing House, the contribution is “paid” when received by that clearing house. From 1 July 2026, employers will need to pay SG at the same time as salary and wages (commonly known as “payday super”). What if my business misses an SG payment? Taking action promptly is essential to accessing the ATO’s support services and minimising your exposure to penalties. The ATO says that it’s willing to work with employers who want to put things right. When you miss a payment, you must lodge an SG charge statement with the ATO within one month of the missed quarterly due date. Lodging on time is important, as failing to do so will incur a further penalty known as a “part 7 penalty”, which can be up to 200% of your SG charge liabilities. Also, when you lodge on time, you may then be able to set up a payment plan to pay your liabilities in instalments. You can ask the ATO for an extension to the lodgement date, but you must do this before the due date. You’ll also need to pay the SG charge. This charge is more than the amount of contributions you would have paid if you had paid them on time, and it’s not deductible. The charge comprises: the amount of the missed contributions (but calculated on salary and wages, including overtime, which is more than the usual “ordinary time earnings” basis for on-time SG contributions); interest of 10% pa (which accrues from the start of the relevant quarter); and an administration fee of $20 per employee, per quarter. This is paid to the ATO, not your employee’s fund. General interest charge will accrue on any outstanding SG charge, and the ATO may also issue a director penalty notice if it remains unpaid. We’re here to help Mistakes happen, but getting on top of problems early will lead to a better outcome for your business. Contact our office for expert assistance in addressing your business’s SG obligations.

If you’re an Australian resident for tax purposes, you don’t have to pay income tax on the first $18,200 you earn each year, from any source. This is called the “tax-free threshold”. If you have multiple income sources, it’s important to consider which one you’ll claim it for. The ATO advises claiming the tax-free threshold once from your “main” payer – typically the job, gig or payment that pays you the most during the year. That payer will not withhold income tax from the first $18,200 they pay you but will withhold tax from payments once your earnings go over the threshold. At the end of the financial year, the ATO calculates your total income and tax withheld. If not enough tax has been withheld, you can expect a tax bill. If more tax has been withheld than you owe for your total earnings, you can expect a refund. Claim the tax-free threshold When starting a new job, your employer should ask you to complete a withholding declaration. To claim the tax-free threshold, you must be an Australian resident for tax purposes on the declaration and answer “yes” to the question “Do you want to claim the tax-free threshold from this payer?”. Where you answer “no”, tax will be withheld from all income from that payer. Avoid claiming the threshold from multiple payers simultaneously unless you’re sure you’ll earn less than $18,200 total for the year. Overclaiming might make your take-home pay higher each pay cycle but will likely mean a tax debt later. Changing jobs When changing jobs you can claim the threshold from your new payer even if you have claimed it from your previous one. If you add a job or side gig that will provide more income than your existing main payer, you can change your claim at any time. Altering your tax-free threshold claim Change your claim using ATO online services, via your myGov account: Sign in to myGov and access ATO online services Select Employment from the menu Choose either New employment (for a new job) or Employment details (for an existing employer) Update your tax and super details as needed. Don’t forget your side gig If you’re earning income outside of employment (eg as a sole trader) you’ll need to pay tax yourself on that income. Consider setting aside a percentage for tax or using pay as you go (PAYG) instalments each time you are paid.

As of July, the ATO began sending letters to non-charitable not-for-profits (NFPs) to notify those organisations that the new NFP self-review return is ready to access and lodge. If you belong to one of the estimated 150,000 plus NFP organisations and are concerned that there is not enough time for your organisation to meet the new reporting obligations, or you are having difficulties accessing the ATO's Online services or the Self-help phone service, the ATO has offered a bit of breathing room. While Tax Time 2024 began on 1 July and closes on 31 October 2024, and NFPs are encouraged to lodge their 2024 NFP self-review returns within that time frame, the ATO has recently announced that it is extending the deadline for lodgment to 31 March 2025 if it's required. This extra time forms part of the ATO's transitional support arrangements, so an NFP doesn't need to contact the ATO in order to receive the extension if that extra time is needed. However, if you lodge after 31 March 2025, failure to lodge penalties may be applied to your account. Preparation To prepare to lodge your return, you should: Ensure that your organisation's ABN, addresses, associates and authorised contacts are up to date with the ATO. Set up myGovID and RAM (Relationship Authorisation Manager) to enable access to Online services for business. There are different processes to follow if you are a principal authority (a person responsible for the organisation) or an authorised user/administrator (someone who acts on the organisation's behalf). Once these are set up you will be able to review the return from 1 July 2024. Review your organisation's purpose and governing documents. The governing documents (or constitution, rule book or rules/articles of association) are the formal documents setting out an organisation's purpose, NFP character and how it makes decisions and operates. Make sure your documents have an appropriate not-for-profit and dissolution clause and that your organisation is operating for its stated purpose. Use the questions in How to prepare a NFP self-review return on the ATO website to determine your organisation's eligibility for income tax exemption. Keep a copy of your answers in an accessible format - if you find you can't use Online services or a tax agent to lodge your NFP self-review return, these answers will help you lodge the return over the phone using the Self-help service. Lodgment For the 2023-24 year, you can lodge the NFP self-review return in Online Services for business; registered tax agents can lodge the NFP self-review return using Online services for agents; or you can use the Self-help phone service on 13 72 26 if you can't access Online services for business. If you have your details ready, the ATO estimates that the lodgment process generally takes around 10 minutes to complete. Self-review resulting in taxable NFP or charitable NFP status If your NFP self-review indicates your organisation doesn't meet the eligibility criteria to remain a tax-exempt NFP, you can follow the prompts to notify the ATO that none of the categories apply and the ATO will help you meet your lodgment obligations. For organisations with an income year ending 30 June, you have up to 15 May 2025 to lodge an income tax return or notify the ATO of a return not necessary. More information can be found on the ATO website under Transitional support if you are taxable. If your self-review leaves you unsure if you have charitable purposes, or indicates your organisation does have charitable purposes, you can continue to complete and submit the NFP self-review return. The ATO will help you determine your organisation's status.

If your business owns or leases a vehicle that is used for business purposes, it’s essential to keep proper records to ensure you’re entitled to the maximum deduction for your vehicle expenses. Running costs like fuel and oil, repairs, servicing, insurance premiums and registration are all potentially claimable, as well as interest payments on a loan to purchase the vehicle, lease payments, and depreciation. However, the method used to calculate your claim depends on your business structure and the type of vehicles you’re claiming for. Trusts and companies If your business operates in a trust or corporate structure, you must use the “actual costs” method for all types of vehicles used in your business. This means you can claim the expenses actually incurred, which requires you to keep receipts. You can only claim for business-related use, so if you use the vehicle for any private purposes you must identify the percentage that relates to business use. Keeping a diary that records your business and private use will allow you to justify your claim. Travel between your home and your business is treated as “private” use, unless you operate your business from home and need to travel away from home for business purposes. Individuals If you’re a sole trader (or operating in a partnership that includes at least one individual), the method to use depends on whether the vehicle you’re claiming for is a “car” or some other type of vehicle. A “car” for these purposes means a vehicle designed to carry fewer than 9 passengers and a load less than one tonne. For non-cars, you must use the “actual costs” method described above. But for car expenses, you have a choice of which method to use: either the “cents-per-kilometre” method or the “logbook” method. The cents-per-kilometre method allows you to claim a set rate per kilometre travelled for business use, up to a maximum 5,000 kilometres per year. The current rate for 2024–2025 is 88 cents per business kilometre. The law requires you to make a “reasonable estimate” of your business kilometres, which means you need to be able to show the ATO how you derived your total number of hours. The logbook method, on the other hand, is not limited to 5,000 kilometres but you’ll need to keep more detailed records. A logbook of your business kilometres travelled is required in order to calculate the percentage of total kilometres travelled for business during the year. This is then multiplied by your car expenses. In the first year of using the logbook method, you’ll need to record detailed odometer readings for each trip made in a 12-week continuous period. This 12-week representative period can then be used as the basis for calculating your claim for the year, and for the next four years. Navigating the complexities Once you’ve identified that your business may be entitled to claim vehicle expenses, it’s a good idea to seek expert advice on the detail as additional rules may apply. For example: Fringe benefits tax (FBT) may apply to the non-business portion of the vehicle use. The cost for working out depreciation (decline in value) of cars is limited to a maximum value. The logbook method requires you to also take into account circumstances such as variations in your pattern of use of the car. Contact our office for expert assistance on maximising your business’ vehicle deductions and getting your records right.

As lodgement time once again approaches, business owners should be aware of the key changes in the 2023-24 tax return which may benefit their bottom line in the form of paying less tax. Specifically for small businesses, there are 2 incentives available for certain costs incurred in the 2023-24 income year: the small business instant asset write-off and the small business energy incentive. Small business instant asset write-off The small business instant asset write-off applies to entities with an aggregated annual turnover of less than $10m. It allows those entities to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that were first used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024. It should be noted that the threshold of $20,000 is not cumulative and applies on a per-asset basis. Eligible entities will thus be able to instantly write off multiple assets that fall under the threshold, provided other conditions are met. In addition, eligible small businesses will be able to immediately deduct an eligible amount included in the second element of a depreciating asset’s cost (eg cost of improving the asset). Currently, there is a Bill before Parliament to extend the $20,000 instant asset write-off by 12 months until 30 June 2025. This Bill has not been passed and is not yet law, so at this stage, the small business instant asset write-off only applies to assets first used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024. Small business energy incentive The small business energy incentive applies to entities with an aggregated annual turnover of less than $50m. Eligible entities will get access to a bonus 20% tax deduction for any new assets or improvements to existing assets that support more efficient energy use. Eligible assets must be first used or installed ready for use between 1 July 2023 and 30 June 2024. This timeframe also applies to any eligible improvements. Up to $100,000 of total expenditure can be claimed under the incentive, with the maximum bonus deduction being $20,000 per business. According to the ATO, while this incentive covers a range of assets and expenditure, certain expenditure cannot be deducted including: assets and expenditure on assets that can use a fossil fuel; assets and expenditure on assets that have the sole or predominant purpose of generating electricity (eg solar panels); capital works; motor vehicle and expenditure on motor vehicles; expenditure allocated to software development pools; and financing costs. In addition to these 2 small business specific incentives, Australian companies of all sizes may be able to claim the digital games tax offset (DGTO). The DGTO is a refundable tax offset which allows eligible companies that develop digital games in Australia to claim 30% of their total qualifying Australian development expenditure incurred on or after 1 July 2022. A cap of $20m applies per company, per income year and the company will need to obtain one or more certificates from the Minister of the Arts to be eligible.

As the new financial year begins, employers need to keep an eye on various payroll activities to make sure their employees’ pay and superannuation contributions are processed correctly and at the right times, especially with a number of changes and rate adjustments coming into effect from 1 July 2024. Here are some important considerations at this busy time of year. Payroll Single Touch Payroll (STP) annual reporting needs to be finalised by selecting the final event indicator to “true” for all employees by 14 July 2024. Check and delete any tax variations ceasing as of 30 June 2024, and enter any new tax variations that apply from 1 July 2024. Remember to revise termination worksheets used for redundancies to the new tax-free limits and the employment termination payment (ETP) cap increase. Take care: if an employee is terminated by 30 June but paid on or after 1 July, the new rates and thresholds apply. Check that wages are shown in the correct income year – if the payment is received on or after 1 July 2024, it should be shown in the 2024–25 income year. Review changes to pay rates or salary sacrifice arrangements, noting that award rate increases usually apply to the first full pay from 1 July. Review whether 2024–25 may result in 53 weekly pays or 27 fortnightly pays – employees can elect to have additional tax withheld in these circumstances. This may also affect the amount of any employer and salary sacrifice to super. Superannuation The superannuation concessional limit increases from $27,500 to $30,000 for 2024–25. This reflects the maximum that funds can receive for an individual that will be taxed at 15% (30% for high income earners). The limit applies to the total of employer superannuation, sacrificed superannuation and any post-tax contributions that an individual has lodged a notice to claim a deduction against with the fund. Employers will be aware of the employer and sacrificed contributions. The super contribution rate for 2024–25 increases to 11.5%. Employees often seek to maximise the amounts contributed to their superannuation and may expect employers to manage this process for them. However, it’s up to employees to be responsible. Commonly, what’s shown on payslips and on employees’ income statement may not match what’s counted in a financial year towards the limit. This is primarily because payslips and income statements show amounts accrued for the employee in an income year, not what was actually paid in that income year to their fund. What the fund reports to the ATO for its members is based on what it receives and allocates to accounts in the income year. Why do differences occur? Payment dates: Many employers make their contributions monthly after month-end, meaning the contributions for June may not be received by the fund until July. Clearing houses: Where employers use a clearing house, the amounts are only considered contributed when the clearing house passes the amounts to super funds. This may take up to 10 working days. Fund cut-offs: At income year end, funds may have cut-off dates for recognising member contributions before 30 June. This can mean an employer may have processed contributions by 30 June, but the fund may not allocate and report the amounts until the new income year. To minimise confusion, make sure your employees are aware: it’s up to them to manage their own concessional limit; payslips and income statements show the accrued liability reported, not necessarily what has been paid in the income year; what timeframe you adopt in making contributions to funds (allowing for any clearing house processing time); and some funds may not recognise amounts received late in June until the new income year – this varies by fund.

As tax time approaches, the ATO has released some pertinent reminders for small businesses in preparing themselves for the end of this financial year and the start of the new financial year. The ATO has also highlighted that free courses are available on its small business online learning platform to help small business owners master their tax and superannuation obligations. For Tax Time 2024, the ATO has encouraged small business owners to prepare by considering the following: Purchase tax-deductible items: The last chance to purchase any tax-deductible items needed by the business is rapidly approaching with the end of the financial year on 30 June. Small businesses should ensure that any tax-deductible items can be documented both for cost and usage, including apportionment for work and private use where relevant. Check small business concessions: Check if the business is eligible for any small business concessions. Small businesses, depending on eligibility, may be able to access a range of concessions based on their aggregated turnover - this applies to sole traders, partnerships, companies and trusts - including CGT concessions, the small business income tax offset or the small business restructure roll-over. Finalise employees' Single Touch Payroll (STP): The ATO reminds small businesses that if they have employees, the 2023-24 STP information must be finalised by 14 July. This important end-of-year obligation ensures that employees have the correct information required to lodge their income tax return. STP information for all employees paid in the financial year, even terminated employees, must be finalised. Check your PAYG withholding and instalments: The Stage 3 tax cuts became law earlier this year. From 1 July, individual rates and thresholds will change and will impact PAYG withholding for the 2025 financial year. Small businesses should check that the correct PAYG withholding tax tables are being used and that their software has updated to the new withholding rates from 1 July. If a small business thinks that their PAYG instalments could result in paying too little or too much tax, instalments may be varied. This can be done when lodging the activity statement through Online Services for Business or via a registered tax agent. The variation should be lodged on or before the day the PAYG instalment is due and before lodging the tax return for the following financial year. Review record-keeping: Looking toward the next financial year, small businesses should review their record-keeping from the past year and see if anything needs to be done differently. As part of tax time preparation, the ATO encourages small business owners to consider the self-paced courses offered on the ATO's online learning platform. Launched in February of this year, the online learning platform offers free courses to help small business owners understand their tax and superannuation obligations and is a useful resource for tax practitioners to share and use with staff and clients. Co-created by the ATO with small businesses and educational experts, the platform offers more than 20 courses including videos, case studies, audio content and written information, quizzes, and learning pathways that can be customised. Courses include: life cycle stages - idea, start-up, day-to-day, change and exit; reporting obligations - for example, GST, FBT, employees; claiming small business tax deductions; and small business concessions.