The ATO is warning businesses that if they incorrectly treat an employee as an independent contractor, then they risk receiving penalties and charges, including:

• PAYG withholding penalty for failing to deduct tax from worker payments and send it to the ATO;
• Super guarantee charge (‘SGC’), which is more than the super that would have been paid if the worker was classified correctly. SGC consists of a super guarantee shortfall amount, nominal interest, and an administration fee; and
• Additional SG penalties, including a penalty amount of up to 200% of the SGC.

‘Sham contracting’ may also contravene the Fair Work Act 2009. Courts can impose penalties against a business or person that incorrectly informs an employee that they are an independent contractor.

In a recent decision, the Administrative Review Tribunal (‘ART’) held that a taxpayer could not claim a tax deduction for medical expenses incurred by him in relation to his total and permanent disability pension.

The taxpayer had been terminated from his employment due to total and permanent disablement (‘TPD’). For the 2024 income year, his only income was a TPD pension.

The taxpayer wanted to claim a deduction for medical expenses to be incurred, estimated to be approximately $100,000 in the 2024 income year.

The ART agreed with the ATO that the medical expenses were not deductible. The ART noted in this regard that the medical expenses were “incurred by (the taxpayer) to better live with his medical condition, not incurred ‘in’ gaining or producing the TPD pension.” That is, “the occasion of the Medical Expenses is to assist (the taxpayer) with his medical condition, not to gain or maintain his eligibility to the TPD pension.”

The ART also did not accept the taxpayer’s argument that the medical expenses were not private or domestic in nature, as they were essentially personal in character.

Running a business is rewarding – but it can also be complex, especially when it comes to your tax and super obligations. Getting the basics right can make a big difference.

When we see businesses operating well, the common theme is getting the basics right:

• Use digital tools and business software to streamline your processes and improve efficiency.
• Keep accurate and complete records all year round. Good record keeping makes tax time easier and helps you stay on top of your obligations.
• Get the right advice from trusted sources, like us or the ATO’s website.
• Lodge and pay your tax in full and on time. If you’re worried you won’t be able to lodge and pay on time, please contact us. Proactivness is key.
• Set aside GST, pay as you go (PAYG) withholding and super from your cash flow, so you have the funds available when it’s time to pay.

Taking the time now to put these good habits in place will help you stay compliant, reduce stress, and give you more time to focus on growing your business. We’re here to help you put the right systems in place and guide you every step of the way.

Tax time is in full swing and so are the scammers! Their aim? To trick you into handing over your personal information so they can steal your identity and commit fraud in your name.

Scams Awareness Week is from 25 to 29 August 2025. It’s a great reminder to stop and take a second to check it’s really the ATO contacting you. We know you’re busy, juggling multiple deadlines, but scammers plan on you being distracted.

Do these 3 things to help protect yourself:

1. Don’t be fooled by emails and texts with QR codes or links to an online portal that claim to be about your tax – that’s a scammer trying to steal your personal information.
2. When checking the status of your tax return or using online services, always type the URL into your web browser – don’t click a link in a message.
3. Make sure you protect your TFN, ABN and myID/RAM login details. Never give out your personal information to anyone unless they genuinely need it.

If you think a phone call, SMS, voicemail, email or social media interaction claiming to be from the ATO is not genuine, do not engage with it. You should:

• go to verify or report a scam to see how to spot and report a scam; or
• if you have divulged information or paid a scammer money, phone us immediately on 1800 008 540; or
• Contact us for further assistance.

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 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.

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.”

As from 1 July 2025, the amount of Paid Parental Leave (PPL) available to families has increased from 20 weeks to 24 weeks. In addition, the amount of Paid Parental Leave that parents can take at the same time has doubled – from two weeks to four weeks – giving families greater flexibility in how they share time off.

For the first time, superannuation will also be paid on Government Paid Parental Leave, at the new super guarantee rate of 12%, with contributions made directly to the parent’s nominated superannuation fund. This change is designed to help close the super gap that often affects parents taking extended leave, particularly women.

Parents will also benefit from an increase in the weekly payment rate of Paid Parental Leave, rising from $915.80 to $948.10 in line with the National Minimum Wage increase. Over the full 24-week entitlement, this equates to an additional $775.20 in payments.

These changes mean families will not only have more time at home with their new baby, but also improved financial support and long-term superannuation benefits, making it easier to balance work, family, and future financial security.

Increase your online security

Your personal information is an important part of your identity. There are many ways you can interact online, and the following tips can help you make sure your online transactions are safe.

Use multi-factor authentication

Multi-factor authentication requires a combination of:

• something the user knows (PIN, secret question)
• something you have (card, token), or
• something you are (fingerprint or other biometric).

Enabling multi-factor authentication increases your online safety.

Use strong and secure passphrases

Consider moving from a password to a passphrase. Using passphrases can:

• boost the security of your accounts
• make it harder for cyber criminals to access your information.

A passphrase:

• should be easy for you to remember
• can involve a set of 4 or more random words, numbers and/or symbols depending on the website’s password requirements.

The longer your passphrases, the better.

A random mix of unrelated words:

• is less predictable than a password
• will produce a stronger passphrase – for example, ‘crystal onion clay pretzel‘.

A password manager can help you generate or store passphrases. Regularly change passphrases and do not share them.

Regularly back up your devices

Back up your files and devices regularly on a physical device (such as an external hard drive) or in the cloud. This is helpful if your data becomes damaged, lost, stolen or infected by ransomware.

Secure your backup devices by making sure they are not continuously connected to your main network.

Make sure all devices have the latest available security updates

Cyber criminals hack devices using known weaknesses in systems or apps. Updates have software security upgrades and make it harder to hack.

Regular updates are critical in maintaining a secure system. It’s important to:

• check for any updates regularly, or
• turn on automatic updates.

Antivirus software can help prevent, detect, and remove malware from your device. Make sure you turn on your antivirus software and keep it up to date.

Be careful when clicking on links, downloading programs or opening attachments

Be careful when downloading attachments or clicking on links, even if the message seems to come from someone you know.

Be sure you are downloading authorised and legitimate programs. Unless you know the program is legitimate, do not open attachments or download it.

Some programs contain malware that can infect your computer or be used to harvest your personal information.

Use a spam filter on your email account

Always use a spam filter on your email account and do not open unsolicited messages.

Be wary of downloading attachments or opening email links you receive, even if they are from someone you know.

Spam emails can be:

• embedded with malware
• used to trick you into providing information or buying non-legitimate goods.

Do not respond to or click on these emails. This can help you reduce the risk of your personal information being used fraudulently, or your computer being infected with malware.

Monitor your accounts for unusual activity or transactions

Check your inboxes on your accounts (including banking and online services) regularly. If you know everything is in order, it will be harder for a scammer to convince you otherwise.

If an organisation you deal with sends you an email or SMS alerting you to unexpected changes on your account, do not:

• click on included hyperlinks
• open any attachments.

You should immediately:

• check your account
• contact the organisation by telephone.

Be vigilant about what you share on social media

Keep personal information private and be aware of who you are interacting with.

People are accustomed to sharing personal information on social media. However, before sharing ask yourself if it is information you want strangers to have access to.

It’s very easy for information on social media sites to be shared outside of your network, even when your security settings are set to private.

Be sure you know who you are speaking to on social media, and only share information with people you know and trust.

Criminals can use certain combinations of your personal information to impersonate you to access money, apply for credit cards and bank loans, or commit crimes.

Keep your personal information secure

Keep your tax file number (TFN), passwords, superannuation and other sensitive information (such as your myGov or bank account details) secure. Don’t share them with others, including in emails, to prospective employers or on social media.

Secure your electronic devices wherever you are. Your personal information can be taken in an instant. In some situations, you won’t even know it was stolen.

Make sure you:

• do not leave electronic devices unattended
• secure your electronic devices with passcodes
• securely store portable storage devices (such as thumb and hard drives) when not in use.

This will enhance security, improve fraud detection, and change the user experience when you make payments.

From 17 March, only card holders will be able to make payments with a debit or credit card.

This means your tax professional, or bookkeeper will no longer be able to make card payments on behalf of your business. Other online payment methods such as electronic funds transfer (EFT) and BPAY will still be available to them.

When you pay by card online, you’ll now need to provide details, such as your billing address, contact details and card verification code (CVC or CVV).

The financial institution that issued your card may also ask you to provide additional information, just like when you make other online purchases. The information will depend on your financial institution, but it could include security questions, a one-time pin, or fingerprint or facial recognition verification.

It’s important to keep details such as your address and contact information up to date with us and your financial institution, as it will make payments easier for you.

These changes are due to take effect on the weekend of 14 to 16 March, so online debit and credit card payments will be temporarily unavailable, during this time. EFT and BPAY will still be available.