Practice Update - July 2020

Author na1616mewedewd

Welcome to the New Financial Year

It goes without saying there has been significant and wide-reaching change in 2020. Like so many other businesses, Crawford Accountants has adapted new ways to make sure that our services to you are unaffected.


We have been in regular contact with you regarding State and federal funding including Jobkeeper and Cashflow boost. We are committed to assisting you and your business with reliable advice and compliance services. At Crawford Accountants, its business as usual. So please get in touch for your 2020 taxes or any queries you may have. We strongly recommend frequent communication more than ever to collectively navigate through this time.

Phone appointments, Zoom and electronic signing can also be accommodated to meet your needs.


Victorian Business Support Fund – Expanded

The Victorian Government has announced a $ 5,000 grant to employing businesses that were affected by the 6-week lockdown.

If you are a business that:

  • employs staff
  • currently receives Job keeper
  • affected by the lockdown


Please contact our office urgently as the applications close on the 19 August 2020.
(Guidelines for the grant attached)


ATO Audit Protection

Even if you can substantiate your claim for an allowable deduction, if queried you must still go through the audit process. To alleviate the cost and stress we encourage you to take out our audit protection. It is a cheap and efficient way of dealing with an ATO audit. For more information, please contact our office.


Treasury Laws Amendment (2020 Measures No 3) Bill 2020

Treasury Laws Amendment (2020 Measures No 3) Bill 2020 has passed both Houses of Parliament and is now law.


Extending the Instant Asset Write-Off

This legislation amends the income tax law to allow a business with an aggregated turnover for the income year of less than $500 million to immediately deduct the cost of a depreciating asset (instant asset write-off). The asset must cost less than a threshold of $150,000 and be first used or installed ready for use for a taxable purpose by 31 December 2020. Without these amendments the $150,000 instant asset write-off would have ended on 30 June 2020.


By extending the previous end date of 30 June 2020 to 31 December 2020, the amendments give businesses additional time to access the $150,000 instant asset write-off for their acquisitions of depreciating assets, including those purchases that have been delayed by supply chain disruptions. Further, the amendments extend cash flow support to businesses through the early stages of the recovery from the economic conditions caused by COVID-19.


It will be interesting to see if this timeframe is further extended at some later point. Note that, come 1 January 2021, if there is no further extension, the $150,000 threshold for the instant asset write-off for depreciating assets will collapse to $1,000 and the turnover threshold for eligibility for the outright deduction of less than $500 million will fall to a turnover of less than $10 million.


Editor: Please contact our office if you are considering purchasing a depreciating asset for your business and want to know if you will be eligible for the instant asset write-off.


Treasury Laws Amendment (2019 Measures No 3) Bill 2019

Treasury Laws Amendment (2019 Measures No 3) Bill 2019 has passed both Houses of Parliament and is now law.


Testamentary trusts and minors

This legislation contains amendments to ensure the tax concessions available to minors in relation to income from a testamentary trust only apply in respect of income generated from assets of the deceased estate that are transferred to the testamentary trust (or the proceeds of the disposal or investment of those assets).


Broadly speaking, when a trustee distributes income to a minor it is taxed at the highest marginal rate (plus Medicare levy). However, there are certain exceptions to this rule. One such exception is where the trust is a testamentary trust – being a trust that was established as a result of the will of a deceased individual. Income from a testamentary trust is a type of ‘excepted trust income’ that is generally taxed at ordinary rates.


Prior to this legislation being passed, the previously existing law did not specify that the assessable income of the testamentary trust be derived from assets of the deceased estate (or assets representing assets of the deceased estate). As a result, assets unrelated to a deceased estate that were injected into a testamentary trust may, subject to anti-avoidance rules, generate excepted trust income that was not subject to the higher tax rates on minors. This was an unintended consequence, which allowed some taxpayers to inappropriately obtain the benefit of concessional tax treatment.


This legislation clarifies that excepted trust income of the testamentary trust must be derived from assets transferred to the testamentary trust from the deceased estate or from the accumulation of such income.

This change will apply in relation to assets acquired by or transferred to the trustee of a testamentary trust on or after 1 July 2019.


Please contact our office if you have any concerns about testamentary trusts making distributions to minor beneficiaries.


Regulations confirm no SG obligation on JobKeeper payments where work is not performed

The federal government has registered the Superannuation Guarantee (Administration) Amendment (Jobkeeper) Payment Regulations 2020.


These regulations ensure that amounts of salary or wages that do not relate to the performance of work and are only paid to an employee to satisfy the wage condition for getting the JobKeeper payment are prescribed by the Regulations as excluded salary or wages.


The effect is that these amounts are excluded from the calculations of an employer’s superannuation guarantee shortfall and the minimum compulsory superannuation contribution an employer is required to make in respect of an employee to avoid a superannuation guarantee charge liability.


Likewise, the Regulations recognise that an employer is only entitled to a JobKeeper payment for its employees if the business has suffered a substantial decline in turnover. In these circumstances, it is appropriate to require employers to only make minimum superannuation contributions in respect of amounts that are required to be paid to an employee for the performance of work. 


Employers would not be required to make contributions in relation to additional amounts paid to satisfy the wage condition (for example, the amount by which $1,500 exceeds an employee’s normal pay). 

Editor: If you are concerned about the calculation of compulsory superannuation for any employees supported by JobKeeper, please contact our office.


COVID-19 and Division 7A relief

The ATO has announced some limited relief for private companies that have loans to their shareholders or related parties that are governed by what are referred to as “complying loan agreements”.

A complying loan agreement is entered into to avoid triggering an assessable deemed dividend that could potentially be equal to the amount of the loan from the private company.


When there is a complying loan agreement between a private company and a borrower, the borrower must make the minimum yearly repayment (MYR) by the end of the private company’s income year. This avoids the borrower being considered to have received an unfranked dividend, generally equal to the amount of any MYR shortfall.


As a result of the COVID-19 situation, the ATO understands that some borrowers are facing circumstances beyond their control. To offer more support, the ATO will allow an extension of the repayment period for those borrowers who are unable to make their MYR by the end of the lender’s 2019–20 income year (generally 30 June).


Requesting the extension

A request for a 12-month extension can be made through the completion of an online application. Borrowers will be asked to confirm the shortfall, that the COVID-19 situation has affected them and that they are unable to pay the MYR as a result.


When the ATO approves an application, it will let the borrower know they will not be considered to have received an unfranked dividend. This is subject to the shortfall being paid by 30 June 2021. It will not be necessary to submit further evidence with the application.


This particular streamlined process established by the ATO only applies to applications for an extension of up to twelve months for COVID-19 affected borrowers.  It is still open to a borrower to apply to obtain a longer extension of time outside the streamlined process.


Editor: If you have been affected by the COVID-19 situation and need more to time to make your minimum yearly repayment (MYR) in relation to complying loans from private companies, contact our office for assistance.


Please Note: The comments in this publication are general in nature and if you are intending to apply the information to your circumstances please get in touch with us to verify their interpretation and the information’s applicability to your particular circumstances.

Crawford News

November 2026 - Update

November 4, 2026
ATO will accept credit cards until 30 June 2027 Despite Reserve Banks credit card surcharge terms, ATO will continue to accept credit card payments for tax obligations until 30 June 2027. After 30 June 2027, taxpayers who wish to use credit cards to pay ATO will have to use third-party payment providers. Early Release of Super Schemes The ATO is concerned that some health practitioners and third-party facilitators are using predatory practices to get individuals to inappropriately access their super. Red flags include practitioners or third parties advertising early access to super for cosmetic or dental procedures on social media, or asking for myGov sign-in details so they can apply for you. Other common red flags include: practitioners conducting telehealth appointments, rather than in-person examinations for ‘compassionate release of super’; recommending more expensive treatments when cheaper options may be available; encouraging the use of super to pay for treatment, rather than other payment options, such as a payment plan; requiring the use of a specific provider to prepare the second ‘compassionate release of super’ medical report, or a specific third party to submit the application; requiring upfront payment for treatments and withholding information about the ongoing costs of the treatment; and charging fees to assist with preparing or submitting a ‘compassionate release of super’ application without being a tax agent. Work cars: Are employers overlooking private use? The ATO is calling on employers to check how their employees use work cars, as FBT may apply where a car is used or made available for private use by an employee or their family members or associates. Private use can include: school pick-ups or drop-offs personal trip garaging the car at or near the employee's home taking the car on weekend recreational trips. 2026 Budget Announcements Common rental property deduction errors The ATO has recently published the three most common rental property deduction errors it sees. Not apportioning interest expenses correctly Broadly, rental property owners can only claim deductions for interest they pay on a loan used to: buy the rental property; buy a depreciating asset for the property pay for deductible expenses that arise from renting out the property finance renovations and extensions to the rental property Interest on any part of the loan used for private purposes is not deductible. Where the loan is refinanced or redrawn to pay private expenses, such as school fees or a holiday, a deduction cannot be claimed for the interest on that portion. Incorrect claims of repairs vs capital works The ATO continues to see errors in claims for repairs, maintenance and capital works expenses. Generally speaking: repairs, such as fixing wear and tear, or damage to a property that occurred while renting it out, can be claimed as a deduction in the year they occur; improvements, such as renovating or replacing an entire structure, are capital expenses which can be claimed over time (generally 40 years); and adding or replacing something that’s not part of the structure is a depreciating asset and the cost is generally claimed over the asset's effective life. Separating private use of a property The ATO is also seeing rental expenses not being apportioned for any private use. Generally speaking, if a rental property owner: only uses part of the property to earn rent, they must apportion the expenses based on the area of the property rented; rents out the entire property, but for only part of the year, they must apportion the expenses based on the number of days it was rented or held to produce rental income; or charges below market rates of rent, and the expenses incurred are more than the amount of rent received, the ATO expects them to apportion the expenses by limiting them to the amount of rent derived from the property. Where the rental property owner uses the property as a holiday home, they cannot claim ownership and use expenses, such as interest, rates and repairs, unless they 'used or held it for use mainly for producing rental income'. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

October 2026 - Update

October 5, 2026
ATO focus on PAYG instalments variations The ATO is writing to taxpayers who have varied their PAYG instalments to nil over multiple years, reminding them that the general interest charge may apply where their instalments have been significantly understated. Where varied instalments are less than 85% of the total tax payable, the ATO may impose GIC on the difference and, depending on the circumstances, penalties may also be applied. Taxpayers are advised to maintain appropriate records to support their variation decisions, and review variations where circumstances change. FBT changes for salary sacrificed work-related benefits From 1 April 2027, employers will no longer be able to use the ‘otherwise deductible rule’ to reduce the taxable value of an expense payment fringe benefit provided to an employee where the expense is: work-related; covered by the new $1,000 standard deduction; and provided under a salary sacrifice arrangement. This includes where an employer pays for, or reimburses, work-related expenses, such as home office expenses, home phone or internet expenses, or self-education expenses. However, the otherwise deductible rule can continue to apply where the expense is: not covered by the standard deduction; or covered by the standard deduction but the benefit is not provided under a salary sacrifice arrangement. Further, from 1 April 2027, certain work-related items will no longer qualify for the FBT exemption where they are provided under a salary sacrifice arrangement. These include: portable electronic devices; computer software; protective clothing; and briefcases and tools of trade. Eligible work-related items may still qualify for the exemption where they are not provided under a salary sacrifice arrangement. Further, under the changes, employers may be able to provide an employee with more than one eligible work-related item in an FBT year, even where the items have the same or substantially identical function, and continue to receive the exemption where the items: are mainly used for work purposes; and are not provided under a salary sacrifice arrangement. This repeals the general 'one-item' restriction applying to this work-related item exemption from 1 April 2027. Cents per kilometre method Motor Vehicle claims There are several misconceptions that commonly lead to incorrect claims under the cents per kilometre method for claiming deductions for car expenses. Common errors include: Claiming travel between home and work, which is generally private and non-deductible; Automatically claiming 5,000 kilometres without the appropriate records (for example, being unable to show how the business kilometres were worked out); Claiming car expenses for a vehicle provided under a novated lease through a salary sacrifice arrangement; Separately claiming the decline in value of a car and other expenses when using the cents per kilometre method; and Using both the cents per kilometre and logbook methods for different periods during the same year. Loss carry back rules have returned The re-introduced loss carry back measure has also now become law, applying to income years starting on or after 1 July 2026. Where eligible, companies will broadly be able to carry back a tax loss (revenue in nature) and apply it against tax paid in either, or both, of the previous two income years, basically giving rise to a tax refund for the loss year. ATO extends data-matching programs The ATO is continuing its visa data-matching program, acquiring data from the Department of Home Affairs from the 2027 to the 2029 income years. Under this program, the data collected may include: address and contact history for visa applicants, sponsors and migration agents; histories of visas granted, including visa subclasses; an individual’s visa status at a point in time; details of migration agents, sponsors and education providers; and international travel movements undertaken by visa holders (arrivals and departures). The ATO is also continuing its passenger movements data-matching program for the same period. Under this program, the data collected by the ATO may include names, dates of birth, arrival and departure dates, passport information and status types (including visa status, residency and citizenship status). The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

September 2026 - Update

September 9, 2026
Payday Super and contractors Businesses generally need to pay super where they engage an independent contractor mainly for their labour, personal effort, skills or time. This can apply even if the contractor: has an ABN; invoices the business for their work; or is described as a contractor in a written agreement. It is not mandatory to report payments made to independent contractors through Single Touch Payroll. However, if a business reports them voluntarily, it must meet the STP reporting requirements, including reporting qualifying earnings and super liability information. Where an independent contractor is entitled to super, the contribution must be paid for each payday and reach their super fund within seven business days after payday. Payday Super timeframe Under Payday Super, contributions must be received by an employee’s super fund within seven business days after payday. To keep on track, the ATO recommends that employers: use the new member verification request to verify that an employee’s super fund details are valid and that the fund can accept a contribution before it is made; check with the relevant payroll provider or clearing house that the fund is responding to MVRs; monitor payments, as funds have three business days to allocate or reject a payment; and if a payment is rejected or returned, act quickly to correct any errors and resubmit to the correct fund. For new employees, or where an employee changes their fund, employers generally have 20 business days to make the initial contribution. $21 billion in lost super The ATO is urging individuals to check whether they have lost or unclaimed super, with more than $21 billion waiting to be reunited with its owners. Super can become lost when an account is inactive and the fund cannot contact the member, often following a change of job, address or phone number. In some cases, the balance may be transferred to the ATO to hold until it can be reunited with the individual. The ATO reports that last year, more than $1.1 billion was returned through consolidations and direct payments to eligible individuals. ATO motor vehicle registries data-matching program The ATO acquires motor vehicle registries data from state and territory authorities from the 2026 to the 2030 income years. The information will be matched against ATO records to identify taxpayers who are not meeting their registration, lodgment, reporting, or payment obligations. The data will also be used to support ATO compliance activities through modelling, risk profiling and case selection. The data collected may include identification details for purchasers, sellers and other relevant parties, together with transaction dates and types, sale prices, market values, vehicle garage addresses, intended use, vehicle specifications and registration details. $1,000 deduction for work expenses From 1 July 2026, employees may choose either the standard deduction for work-related expenses of up to $1,000, or a deduction for the actual work-related expenses they incur. You should continue keeping records for deductible work expenses incurred from 1 July 2026. If, at the end of the 2027 income year, you choose to claim actual expenses, you must have the required written evidence for those expenses. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

August 2026 - Update

August 4, 2026
Government extends the $20,000 instant asset write-off The Government has recently introduced legislation to extend the $20,000 instant asset write-off for small businesses. If enacted, the changes would set the instant asset write-off threshold at $20,000 for eligible depreciating assets first used, or installed ready for use, for a taxable purposes from 1 July 2026. The changes would also further suspend the 'lock-out rule' until 30 June 2027. Loss carry back rules to be reintroduced The Government has introduced legislation to re-introduce the loss carry back measure for companies from 1 July 2026. If enacted, this will allow most companies to carry back a tax loss and apply it against tax paid in either, or both, of the previous two income years, basically giving rise to a tax refund for the loss year. New restrictions on LRBAs New legislation imposes restrictions on the use of limited recourse borrowing arrangements by SMSFs. LRBAs entered into on or after 10 August 2026 to purchase real property can now only be used to acquire business real property. These changes do not apply if an SMSF: has already entered into an LRBA to finance a real property acquisition before 10 August 2026; or maintains or refinances that LRBA on or after 10 August 2026. 'Business real property' generally means land and buildings used wholly and exclusively in one or more businesses. Division 7A benchmark interest rate The ATO has published a Division 7A benchmark interest rate of 8.77% for the income year ending 30 June 2027, up from 8.37% for the previous income year. The benchmark interest rate is applied when calculating minimum yearly repayments for complying Division 7A loans. ATO scam warning The ATO has received reports of a new email impersonation scam claiming to be from the ATO. The email states that a phone appointment with the ATO has been scheduled and includes appointment details such as the date and time. The email claims that recipients must open an attachment included in the email to securely access relevant services or reschedule the appointment. The attachment contains a link to a legitimate looking myGov sign-in page designed to steal usernames, passwords and other personal information. The ATO has advised recipients not to respond to the email or interact with it in any way. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

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