RBizz Corporate Accountants - Resources #Tax Specialists

Taking Steps to Stay Compliant with ATO Rules

Tue, 24 Mar 2026 20:03:15 +1100

Taking Steps to Stay Compliant with ATO Rules

“Every year we see small businesses run into avoidable issues because they haven’t kept accurate records, reported all their income or managed their cashflow effectively”

Angela Allen, ATO Assistant Commissioner

The Australian Taxation Office (ATO) is encouraging Aussie small businesses to stay compliant. By doing so, you avoid the problems, penalties and fines that can occur when your business fails to follow the rules and compliance duties set out by the ATO.

What can you do to improve your overall tax compliance position?

ere are 5 key ways you can ensure your business stays in the ATO’s good books.

1. Stay on top of your ATO debts

The ATO wants you to proactively manage your tax debts. If you can engage early with the ATO, whether that’s to set up a payment plan or even make a prepayment, this makes the debt easier to manage and removes the need for stronger enforcement.

2. Separate accounts for separate obligations

Make sure you have dedicated bank accounts for GST and PAYG withholding. This protects your essential cashflow and stops cash from being used for operational expenses, so you always have funds available for BAS lodgements and other contributions.

3. Good records, good business

Keeping accurate records is a legal requirement for a small business. The ATO is keen for businesses to transition from manual ‘shoebox’ methods to digital systems and ATO online services. This minimises errors and helps you provide all your tax information in a digital format.

4. Prepare for Payday Super

Starting 1 July 2026, Payday Super will come into force, making it mandatory for employers to pay Superannuation Guarantee contributions on each payday. Review your payroll systems now to make sure they can manage more frequent reporting and payment requirements.

5. Closing or winding down a business

If you’re closing down your business and exiting the market, you must meet your final obligations, including cancelling ABNs and lodging your final tax returns. This prevents future compliance issues and ensures all employee entitlements are settled.

ATO Advice

The ATO advises businesses to work with registered tax practitioners. Working with a qualified tax adviser from the Tax Practitioners Board keeps you in line with all current tax laws.

Talk to our tax team and let’s make sure you’re 100% compliant with ATO rules.

US Ends Tax Exemption on Low-Value Parcels

Thu, 18 Sep 2025 10:23:13 +1000

US Ends Tax Exemption on Low-Value Parcels

If you export goods directly to US consumers, you’ll be aware of the de minimis exemption. Under the rules, goods under $800 were not subject to the US’s existing tariffs and import taxes.

But in a shock turn of events, US President, Donald Trump, has signed an executive order that ended the global import tax exemption on low-value parcels. This change took effect on 29 August and affects all goods and deliveries entering the US.

Let’s take a look at what this means if your small business exports directly to US consumers.

Removing the de minimis exemption on low-cost parcels will have three specific outcomes:

1. Increased costs

As the $800 de minimis exemption has been eliminated, you now face import duties and taxes on all parcels you send to the US, regardless of value. This may also introduce customs brokerage and processing fees, directly increasing your export costs.

2. Operational and logistical challenges

With every parcel now requiring full customs clearance, you can expect significant delays at the border and increased paperwork. Faced with the overwhelming cost of delivering to the US, many international postal services have made the decision to suspend services to America – including Australia Post and many European and Asia Pacific postal providers.

NZ Post and the UK’s Royal Mail initially suspended US deliveries but have now recommenced services.

3. Impact on business models

If you’re an e-commerce business that relies heavily on the duty-free exemption for low-cost international shipping, you’ll need to re-evaluate your pricing and logistics. This policy shifts the competitive landscape, potentially favouring US-based businesses.

What options do you have for delivering goods to the US?

If you’ve been using your national postal carrier as a key part of your logistics process when delivering to US customers, these suspensions are a major challenge!

So, what can you do to overcome the problem while international postal services scramble to find a workaround that will reduce the cost of delivering to the US.

Let’s look at four key options:

Partner with private delivery companies:

Try working with major private couriers like FedEx and UPS. These companies have not suspended services and are actively helping businesses with customs documentation to ensure a smoother, reliable delivery, despite the new tariffs.

2. Move to a delivered duty paid (DDP) model:

Absorb the new taxes and duties upfront to provide your customers with a transparent, final price at checkout. This prevents unexpected fees for the consumer and can reduce cart abandonment. However, higher prices may have a negative impact on your sales.

3. Suspend US operations and diversify into other markets:

If the US market becomes too unprofitable, you may be forced to suspend deliveries to the US until the situation is revised. Instead, you could expand into other international markets that have more favourable trade agreements – removing the problem of high tariffs.

Come and talk to our team about the hurdles, cost implications and logistical stumbling blocks you now face. We’ll be happy to review your current model and offer alternative solutions.

ATO Guide for Businesses & Tax Agents in 2025

Mon, 15 Sep 2025 21:16:34 +1000

ATO Guide for Businesses & Tax Agents in 2025

In April 2025, CPA Australia’s With Interest podcast released an episode titled “ATO Guide for Business Owners and Tax Practitioners”, featuring David Allen, the Second Commissioner of Frontline Operations at the Australian Taxation Office (ATO). It outlines key challenges, changes, and tips from the ATO for businesses and tax-agents preparing for 2025.

Key Issues & Priorities

ATO Debt Is a Big Focus
- The ATO’s debt book ballooned during COVID from about AU$25 billion to nearly AU$50 billion, with small businesses responsible for about 65% of that debt.
- To reduce this, the ATO is pushing for earlier engagement, offering payment plans and reminding that non-payment can lead to stronger enforcement actions like garnishee notices and director penalty notices (DPNs).
Payment Plans & Enforcement
- Many businesses historically delayed engagement; the ATO has seen this issue worsen during COVID. Now, they emphasize that businesses should proactively reach out if they can’t pay.
- For those who don’t engage or continue to default, stricter actions will be taken more quickly. Enforcement may include director penalty notices, garnishee actions, and disclosures to credit reference agencies.
General Interest Charge (GIC) Remissions Being Tightened
- The ATO has been approving many GIC remission requests in past years—sometimes too leniently. Now, fewer will be granted, especially where delays or non-payment appear deliberate.
- The ATO is reviewing its remission guidelines, staff training, and decision tools to improve consistency and fairness in how these are handled.
Improving Service & Support to Agents & Vulnerable Taxpayers
- One complaint from tax-agents is inconsistent decision-making in how the ATO handles GIC remission, payment plan approvals, etc. The ATO acknowledges this and plans to make its processes more transparent.
- Also discussed: how the ATO can better support taxpayers who are vulnerable, and how tax agents can help clients navigate obligations.
Modernisation, Automation & Operational Efficiency
- The ATO is increasing its resources and capability in enforcement, but also working to improve its internal systems to reduce delays, improve consistency, and deliver better customer service.

Practical Tips from the Podcast

Engage Early: If there’s tax debt, don’t leave it unaddressed—contact the ATO early to negotiate payment plans or remediation.
Document Everything: Keep good records of correspondence, financial constraints, and any attempts to pay. These help when negotiating or applying for remissions.
Understand Eligibility: Especially for GIC remission, know the criteria—delay, hardship, inadvertent mistakes can be relevant, but repeated or deliberate non-payment will weigh against you.
Use ATO Tools & Support Resources: There are help tools, payment plan options, guidance documents; make use of them rather than trying to guess the rules.

Why All This Matters

The regulatory environment is tightening. The ATO is shifting from lenient “go-soft” periods to more active enforcement due to pressures on public revenue and fairness (making sure everyone plays by the same rules).
Small businesses and tax agents who ignore early warning signs risk facing high penalties, enforced debt recovery, and potentially negative impacts on reputation or credit.

Updated guidance on home charging expenses for plug-in hybrid vehicles

Mon, 28 Jul 2025 18:26:28 +1000

Updated guidance on home charging expenses for plug-in hybrid vehicles

The ATO has released draft guideline (PCG 2024/2DC) to calculate electricity costs of charging an electric vehicle or PHEV at a taxpayers residential premises home if they use either an electric vehicle or PHEV in gaining or producing their assessable income.

It sets out a method that calculates the cost of electricity when an EV or PHEV is charged at an employee’s or an individual’s home. Taxpayers may choose to apply a rate of 4.20 cents per kilometre travelled in an FBT or income year.

Guidance previously provided by the ATO in PCG 2024/2 excluded PHEVs from applying cents per kilometre rate of 4.20 cents (shortcut method) which can be used to calculate electricity costs of charging an EV at a residential premises.

Fringe benefits tax 

If an employer provides an employee or associate with an EV or PHEV that lead to the provision of car, residual or expense payment benefits, as per this draft guideline, will have the option to use the shortcut method ie a rate of 4.20 cents per kilometre travelled to calculate taxable value of such benefits

Income tax deductions

The shortcut method can also be used by an individual taxpayer to calculate work-related car expenses for income tax purposes when using the logbook method, for a motor vehicle which is not a car, a deduction may also be claimed by calculating the total kilometres travelled by the vehicle during an income year.

Methodology for calculating home charging costs for PHEVs

Step 1: calculate actual petrol costs vs electricity costs for the FBT or income year

Start by gathering the petrol receipts for the financial year. Alternatively, use the total petrol spend divided by the official average petrol price for the respective state.

Step 2: Calculate total petrol kilometres

Calculate the total petrol kilometres travelled by the PHEV during the year by converting the petrol amount into litres using the PHEV's petrol consumption rate (divide petrol costs calculated in step 1 by the petrol consumption rate.

Step 3: Calculate total annual kilometres

Subtract your petrol kilometres from your total odometer reading for the period. The difference represents the distance travelled on electric power. Multiply the electric kilometres travlled with the cents per kilometre rate of 4.20 to calculate the home charging cost for your PHEV.

Eligibility for making a claim

To be eligible to apply this method, yearly odometer readings, logbooks and at least one electricity bill must be maintained/obtained.

Adopting this methodology is optional, and a taxpayer may choose to opt-out/opt-in on a yearly basis.

How to claim tax deductible expenses as an individual

Sat, 19 Jul 2025 20:20:31 +1000

How to claim tax deductible expenses as an individual

As an individual taxpayer, you know it’s mandatory to submit your annual tax return to the Australian Taxation Office (ATO) at the end of each financial year (ending each June).

Did you know that you claim expenses against some of your work and personal expenses?

Let’s look at what expenses you can claim and the process for reducing your taxable income.

What’s your taxable income?

You only pay tax on what’s known as your ‘taxable income’. By making an eligible claim for expenses, you can reduce the total of this taxable income. In short, this means you will pay less in tax – with the tax deductible items deducted from your total taxable income.

Work-related expenses you can claim

If you’re incurring expenses as part of your job or self-employment, you can claim some of these expenses back and lower your overall income tax bill.

To claim a deduction for a work-related expense:

You must spend the money yourself and not get a reimbursement
The expense must directly relate to earning your income
You must have a record to prove it (usually a receipt)

Costs that you may be able to claim against include:

Cars, transport and travel expenses
Tools, computers and items you use for work
Clothes and items you wear for work
Working from home expenses
Education, training and seminar expenses
Memberships, accreditations, fees and commissions
Some meals while working overtime
Medical and health expenses

Not all tax deductible expenses relate to your employment. There are other areas where you may be able to reduce your taxable income.

These include:

Gifts and donations
Expenses related to earning income from investments
Personal super contributions
Income protection insurance
The cost of managing your tax affairs.

How to make a claim for expenses

Keeping records is a vital part of making a claim for expenses. The ATO will need to see receipts and records that show you incurred the expense.

You can use the myDeductions tool in the ATO app to help keep track of your work-related expenses (such as vehicle trips) and general expenses (such as gifts and donations).

These records can be uploaded when you lodge your return online with myTax, or you can share them with us, as your registered tax agent and accountant.

Talk to us about about making a claim for expenses

Claiming the expenses you’re due can make a big difference to your tax bill.

Talk to our team about setting up the right record-keeping processes and claiming the tax deductible expenses that you’re eligible for, both in and out of work.

Foreign resident CGT integrity changes - start date deferred

Wed, 02 Jul 2025 14:19:50 +1000

Foreign resident CGT integrity changes - start date deferred

As announced in the 2025 Federal Budget, the start date of the 2024 Budget measure to strengthen the foreign resident CGT regime will be deferred from 1 July 2025 to the later of 1 October 2025 or the first day of the quarter that starts after the amending legislation receives royal assent.

Treasury is currently consulting on reforms to strengthen the foreign resident CGT regime to ensure foreign residents pay their fair share of tax.

These reforms aim to provide certainty to foreign investors by aligning Australian tax law closely with the OECD standards and international best practice.

Types of assets

A foreign resident’s liability for CGT is based whether the relevant asset is taxable Australian property (TAP). As per s 855-15 the following assets are a TAP:

Taxable Australian real property
an indirect interest in Australian real property
a business asset of a permanent establishment in Australia
an option or right to acquire any of the CGT assets listed above
a CGT asset that is deemed to be Australian taxable property where a taxpayer on ceasing to be an Australian resident, makes an election under s 104-165.

The proposed measure will look to clarify and broaden the types of assets that the foreign residents are subject to, details of which should be released in the near future.

Principal asset test

The principal asset test determines whether the membership interest of a foreign resident in another entity (the test entity) is above 50% of the value of the test entity’s total assets attributable to Australian real property at the point-in-time when the CGT event occurs. Under the announced measures, this test will be changed to a 365-day testing period.

ATO to be notified of high value transactions

As per the Federal Budget announcement, foreign residents will be required to notify the ATO each time they dispose of shares and other membership interests exceeding $20 million in value, prior to the transaction being executed.

Foreign resident CGT withholding

A 12.5% non-final withholding tax obligation applies to the purchaser of certain Australian real property and related interests where the property is acquired from a foreign resident vendor. The CGT withholding is calculated on the first element of the cost base of the CGT asset, payable to the Commissioner at the time of acquisition (settlement).

Also announced in the Federal Budget, is a new ATO notification process which will oversee transactions that should be liable to the CGT withholding tax where a vendor self-assesses their sale as non-taxable real property. This will improve oversight and compliance with the foreign resident CGT withholding rules.

Next steps

The ATO will be scrutinising foreign residents who become liable to pay CGT as the information related to CGT events falling within the expanded definitions and stringent tests filters through to the ATO under various data matching and monitoring programs.

Please free to contact our office should you have any queries in relation to these announcements.

...

ATO flags security and guarantee arrangements that may trigger Div 7A

Wed, 02 Jul 2025 14:18:59 +1000

ATO flags security and guarantee arrangements that may trigger Div 7A

The ATO has issued a draft Taxation Determination TD 2024/D3, highlighting that arrangements where private companies provide security or a guarantee for third party loans to any other entity (including a public company bank) may result in a deemed dividend under Div 7A of the ITAA 1936.

Section 109U (under Div 7A) applies when a private company makes a payment to a shareholder or associate or a shareholder if:

a private company guarantees a loan made by the first interposed entity
another private company (which may be the first interposed entity or another entity) with minimal distributable surplus makes a loan or payment to a target entity
a reasonable person would conclude that the guarantee was solely or mainly given as part of an arrangement involving a payment or loan to the target entity (reasonable person test), and
the amount paid/loaned to the target entity exceeds the distributable surplus of the private company that made the loan/payment (insufficient distributable surplus condition).

Tax implications of the draft determination

In the draft determination, the ATO has taken the view that in an arrangement where a private company provides a loan guarantee to a bank which has no distributable surplus, s 109U may apply. Previous to this, the application of s 109U was only considered where one private company guaranteed a loan made by another related private company (with an available distributable surplus) to a shareholder or an associate.

Along with this draft determination, the ATO released Taxpayer Alert TA 2024/2, putting taxpayers on notice that may enter into arrangements where the guarantee and subsequent loan to the shareholder are provided “as part of the same contrived arrangement” for the purposes of avoiding Div 7A. Anti-avoidance provisions under Pt IVA may also be applied by the ATO to cancel any tax benefits arising from such arrangements.

If an arrangement of this nature in caught by s 109U, the payments/loans may be treated as deemed dividends. This means the amount could be included in the shareholder's or associate's assessable income, leading to additional tax liabilities

With this, the ATO has decided to devote considerable compliance resources to Div 7A issues, so this may be the right time for businesses to revisit their existing or prospective related party financial agreements and seek tax advice to mitigate any Div 7A risks.

Before the end-of-year Div 7A compliance approaches, we can assist you with reviewing your related party financial arrangements.

If you have any queries in relation to this new guidance, please feel free to contact our office.

PSI under increased scrutiny with new guidance released

Thu, 26 Jun 2025 12:37:53 +1000

PSI under increased scrutiny with new guidance released

A recent draft compliance guidance has been released by the Australian Taxation Office (ATO) that deals with income that your business earns.

Specifically, this draft guidance relates to income that comes from personal exertion and services. As you self-assess your income as a personal services business (PSB), this may require further analysis going forward to ensure your arrangements are not subject to high-risk audits.

Personal services income rules

The PSI rules are in place to deny you an opportunity to divert income to an associate of yours that pays a lower average rate of tax. If the PSI rules apply to you, there are also limitations on the types of tax deductions you can claim.

However, in your circumstances, you have been declaring yourself as a PSB. This allows you to operate as a standard business, generally earning income through your trust/company.

Tax avoidance schemes

The draft guideline highlights situations where individual's in your industry use a PSB to gain a tax benefit by distributing income that an individual earns through personal services to another person or company that does not undertake those services.

Overall, the ATO argues that the sole reason for doing this is to obtain a tax benefit, such as the individual's income getting the tax-free threshold twice. An example of this would be a non-working spouse getting a dividend where tax is paid at the lowest marginal rate of 16%.

Next steps

In order to make sure you are fully compliant with your tax obligations, we would like to have a deeper look at the type of work you complete, as well as go through the contracts you sign.

This will help us advise you on the best way you can distribute income made by your PSB in a manner which is commensurate with the services provided by the principals in your business.

Please give us a call to arrange a follow up meeting, where we can discuss further.

Lump sum payment in arrears to be exempt from Medicare levy

Thu, 26 Jun 2025 12:37:16 +1000

Lump sum payment in arrears to be exempt from Medicare levy

Individuals who receive an eligible lump sum payment in arrears after 1 July 2024 will not have to pay Medicare levy on that amount, under recently enacted legislation.

This measure ensures that if you would have otherwise not been liable to pay Medicare levy, or a reduced amount, you are not penalised for receiving a lump sum payment in arrears.

What is a lump sum payment in arrears?

The characteristics of a lump sum payment in arrears is that the amount received relates to:

a previous income year, and
the payment of an owed or previously underpaid amount (eg underpayment of wages or back payment of workers' compensation).

Eligible lump sum payments include salary or wages, superannuation income streams, annuities, compensation payments, a Commonwealth education or training payment and exempt pensions (including under a law of a foreign country).

How does the new concession work?

Income tax and Medicare levy surcharge concessions in relation to lump sum payments in arrears already existed. This new measure focuses on Medicare levy concessions for those who are under the Medicare levy threshold or the Medicare levy phase-in rate applied to them in the income year the amount accrued.

If you are expecting a lump sum payment in arrears, know that Medicare levy will only apply to that amount if you were liable for it in the income year that it accrued. Otherwise, Medicare levy will not apply.

If you need more information in relation to this measure, please contact our office.

Succession planning for small businesses

Wed, 25 Jun 2025 16:54:19 +1000

Succession planning for small businesses

It takes guts to start a business. It also takes a strategic mindset to succeed.

Business owners are no strangers to weighing risk and navigating uncertainty, but the recent economic climate has dialled everything up. Many business owners face the uncomfortable position of having to remap carefully thought-out succession plans and exit strategies and to consider selling their business before they’re ready and, possibly, for less than it's worth.

Transition may be a better option

Rob Young, Managing Director of Platform 1, works with business owners on ensuring they get the best possible return when selling their business. Rob's advice is to start by thinking about what options you have first.

There are five different ways to sell:

1. Close the business down and sell the assets

2. Sell to a family member

3. Sell to an employee

4. Just a straight sale to an outside party

5. Gradual buy-out - The Platform 1 model.

The Platform 1 model is a gradual buy-out program. It involves finding a manager to take the reins early on. Gradual buy-out a process that involves:

Figuring out what kind of individual would be right to run the business; finding that person, and developing them.
Creating a plan where the new manager buys in gradually over 3 to 6 years. The objective is to get the owner out of the business physically as quickly as possible by transferring relationships and processes to the incoming person, so the owner becomes more of an investor rather than a manager.

Preparing for sale - what’s important

Don’t put off your succession plan - even if you are not ready to sell

It’s a good idea to think about this long before you need to sell so that you maximise the value of the business and achieve a better outcome. It's also worth remembering that retirement doesn’t need to be doing nothing. If your business can run as an asset without your involvement, you don’t have to sell it completely, so not selling down 100% of the business is a viable option.

Talk to us today about your succession plan

If you don’t already have a succession plan in place, we can help so that you have options when you need them.