Season’s greetings to all of you, our clients near and far. Near and far because our clients are found in all corners of this great land.

CGH Accounting Services operates as both a trusted local accountant for residents of Ballarat and Torquay—where our offices are located—and for clients right across Australia who choose to take advantage of our easy-to-use online services.

So whether it’s a chat with a friendly tax accountant over a coffee, or a minimum-fuss remote solution that works for you, we’ve got you covered.

The Best Accountant Jokes of 2025

Q: Why was the accountant in rehab?
A: Solvency abuse.
Q: Who leads the accountants’ army?
A: General Ledger.
Q: Why did the accountant get dehydrated?
A: He didn’t have enough liquid assets.

Hometown Summer

Speaking of dehydrated, summers in Ballarat can get seriously hot. It’s a town of extremes—freezing for months during winter, then baking through January.

It’s true that many locals head down to the Surf Coast (where our second office is located in Torquay) to enjoy the ocean breezes. But summer in Ballarat can be wonderful in its own right. The city quietens down, and the big old trees provide plenty of shade.

Walking, cycling, picnicking or paddle-boating around Lake Wendouree are terrific ways to spend a warm summer’s day in the ’Rat. And then summer reaches its climactic flourish of blooms and beauty with the Ballarat Begonia Festival, before the season turns to autumn and our accountants start going tax-crazy again…

Accountants For All Seasons

Yes, there is a tax season, and we all know when that time of year rolls around. From June through to October it’s certainly action stations around here.

But in reality, people in business—and busy families—need a great accountant in their corner all year round. There’s far more to manage than just tax returns. Tradies, for example, need to keep their books ship-shape week in, week out, and that’s not easy when you’ve been on the tools all day and are exhausted in the evenings.

That’s why many local tradies, and many from further afield, rely on CGH Accounting’s Tradie Bookkeeping Services.

New Offerings

There’s so much more we can do to help you focus on what matters most to your business and family—without worrying about the financials.

With that in mind, we’re always looking for new ways to support our wonderful clients. Recently, we’ve introduced a range of new services specifically designed for real estate agents and conveyancing professionals. If that’s you, be sure to check them out—we’re confident they’ll make your life much simpler.

We’ve Got Your Number

In a nutshell, we’re introducing a new specialty area tailored to sales agents, property managers, agency principals, buyers’ agents and conveyancing practices.

Whether you’re just getting started or have already done the hard yards, these careers demand specialised accounting and tax support. CGH has the knowledge, the experience, and the love of crunching numbers—so that you don’t have to.

Whatever It Takes

Visit our website for full details, but services in this space include:
• Financial reporting and performance insights
• Profit & loss statements and balance sheets
• Cash-flow analysis
• Commission and income tracking
• Income tax compliance and lodgement
• BAS, PAYG and GST obligations
• Superannuation
• Strategic tax planning
• Business structure and strategy
• Accounting software and systems
In short, whatever your financial future requires, we’ll get it all tickety-boo.

See You Next Year!!

That’s it from CGH for 2025. From our family to yours, we wish you a very Merry Christmas and a Happy New Year. We look forward to seeing you in 2026.
Cheerio!

The post CGH Accounting Services – December 2025 Christmas News appeared first on CGH Accounting.

Because it’s issued for life, the Australian Taxation Office (ATO) won’t issue a new one if it’s compromised. This makes protecting your TFN crucial to prevent identity theft and fraud.

What Is A Compromised TFN?

A compromised TFN occurs when scammers or data breaches expose your number to unauthorised access. This puts your personal and financial information at risk. Understanding these threats and knowing how to safeguard yourself is essential.

How Can My TFN Be Compromised?

Your TFN can be exposed in several ways:

• Phishing Scams: Fraudsters might impersonate the ATO through fake emails or messages to trick you into revealing your TFN and personal details. Always verify the authenticity of any communication before sharing sensitive information.
• Data breaches: If an organisation where you’ve shared your TFN suffers a data breach, your information might be exposed. Ensure you use secure methods for sharing your TFN. For example, CGH Accounting provides a secure portal for safely submitting personal information.
• Identity theft: Criminals may steal your TFN along with other personal details to commit fraud or access your financial accounts. Stay vigilant to protect your information.

How Do I Know If My TFN Has Been Exposed?

Signs that your TFN may be compromised include:

• You start receiving tax bills or notifications from the ATO that you weren’t expecting.
• There is an unexplained delay in your tax refund, or you discover that a return has been filed under your name without your knowledge.
• Irregularities or unexpected transactions appear in your superannuation accounts.

What Should I Do If I Think My TFN Is Compromised?

If you suspect your TFN has been compromised, follow these steps promptly:

1. Contact the ATO: Report the incident to the ATO by calling their dedicated TFN hotline or using their online reporting tool.
2. Monitor your accounts: Keep a close eye on your bank statements, credit reports, and other financial accounts for any unauthorised activity.
3. Update your passwords: Change your passwords for all your online accounts, especially those that contain sensitive information. Set up two factor authentication where possible for an added layer of security.
4. Consider a credit freeze: Contact credit reporting agencies to place a freeze on your credit file, preventing anyone from opening new accounts in your name.
5. Stay vigilant: Be cautious of suspicious emails, calls, or messages asking for your TFN or personal information. Verify the request’s legitimacy before sharing any details.

What Changes Should I Expect When Dealing With A Compromised TFN?

Reporting a compromised TFN to the ATO may lead to changes in how you interact with them:

• you may not be able to use the ATO’s online channels or myGov
• pre-fill data may not be available
• the ATO may need to make extra checks for tax returns and other forms that could delay processing
• the ATO can prevent business activity statements from issuing automatically. You will need to contact the ATO before each lodgement so they can generate these statements
• your digital identity may be suspended while the ATO investigate if there has been a compromise.

CGH Accounting is here to assist you. Our team of Tax Experts can guide you through reporting your compromised TFN and answer any questions you have about the process.

How Do I Lodge My Tax Return With A Compromised TFN?

If your TFN is compromised, you will need to call the ATO Client Identity Support Centre at 1800 467 033 between 8am and 6pm Monday to Friday (AEST) each time you lodge your tax return. The ATO will provide a 48-hour window for you and your tax agent to access your details on ATO systems. This process will continue each time you lodge your return.

Once extra security is placed on your account, it remains in place permanently. You will need to contact the ATO to lift these security measures each time you need access to your information. Although this process can be cumbersome and might cause delays, working with CGH Accounting Tax Experts can help manage it effectively and reduce stress.

How Can I Safeguard My TFN Against Future Compromise?

To protect your TFN and personal information, follow these preventive measures:

• Keep Your TFN Confidential: Only share your TFN when absolutely necessary. Avoid sharing it through unsecured channels.
• Be Wary of Scams: Be cautious of scams that impersonate the ATO through phone calls, emails, or text messages. If you receive suspicious communication, do not respond.
• Monitor Your Accounts: Regularly check your financial statements for unfamiliar transactions. Report any suspicious activity to your financial institution or the ATO immediately.

At CGH Accounting, we prioritise the security of your TFN and personal information. Our Tax Experts ensures your data is handled with the highest level of security and confidentiality, so you can trust that your TFN is in safe hands.

If you have any questions or need assistance, please do not hesitate to call us on 03 5332 7409

ATO Tax Time Hitlist 2025: What the ATO Is Watching This Year

2025 Federal Budget Tax Updates

‘Payday Super’ from 1 July 2026: What Employers Need to Know

The post Compromised TFN: What You Need to Know appeared first on CGH Accounting.

Work-Related Expenses

The ATO has reported an estimated $8.7 billion “tax gap” — the difference between the amount of tax individuals are expected to pay and what is actually being paid. Work-related expense claims are believed to be the main contributor to this gap and are therefore a major focus for the ATO this year. Key areas under review include:

Working From Home Expenses

Taxpayers can now claim these using a fixed rate of 70 cents per hour. This method comes with stricter substantiation requirements. The ATO is expected to closely verify whether claims are backed by comprehensive records of hours worked from home throughout the year, such as timesheets, diaries, or work rosters.

Occupancy expenses

Deductions for items such as rent, rates and mortgage interest are only allowable if the home is used to run a business — not just for working from home as an employee

Mobile phone and internet costs

Particular attention will be paid to those claiming their entire bill, or a significant portion, as work-related. The ATO is also monitoring for “double dipping” — where taxpayers claim the 70 cents per hour rate (which includes an allowance for phone costs) and claim mobile expenses separately.

Other commonly scrutinised deductions:

• Work-related clothing, dry cleaning, and laundry
• Overtime meal expenses
• Union fees and professional subscriptions
• Motor vehicle expenses, especially where the 88 cents per kilometre method is used for up to 5,000 kms. The ATO is concerned some taxpayers automatically claim the 5,000 km limit regardless of actual travel.
• Deductions under the $300 threshold rule, which allows claims without receipts. The ATO has flagged misuse by those claiming up to this amount without incurring any actual expense.

Tip: Before making any claim, ensure there is a clear understanding of what can and can’t be claimed, and that all necessary records (receipts, invoices, diaries, etc.) are available to prove that the expenses were both incurred and work-related. CGH Accounting’s Tax Experts can guide you through eligible deductions, review your records, and ensure your return is accurate and ATO-compliant — maximising your refund while keeping you on the right side of the rules.

Property Spotlight

Investment properties and holiday homes are another key area of ATO scrutiny this year. Following recent audits, where errors were found in 90% of the returns reviewed, several issues are in the spotlight:

Excessive interest claims

For example, claiming interest on the family home loan as well as a rental property loan.

Incorrect income/expense apportioning

Deductions on jointly owned properties must be split appropriately between owners. Claims should not be skewed toward the higher-income owner to reduce tax liability.

Holiday homes

Claims can only be made for periods when the property was rented out or genuinely available for rent. Personal use periods cannot be claimed.

New rental property claims

Costs associated with fixing pre-existing damage or carrying out renovations after purchase are not immediately deductible and must instead be claimed over time.

Tip: Good recordkeeping is essential. This includes invoices, receipts, bank statements, and evidence that the property was genuinely available for rent (e.g. online rental listings). If a claim cannot be substantiated, it cannot be deducted. Our Tax Experts specialise in property investment taxation and can help ensure all allowable deductions are claimed correctly.

Share Economy

The ATO is convinced that many people in the sharing economy are not properly declaring their profits and gains. So, if you obtain work through Uber, Airtasker or any of the many sharing economy platforms which allow you to rent out assets or your personal services, take heed. The ATO is now receiving reports from many platforms (including Uber), which it can use to highlight data mismatches.

Similarly, if you rent out a property (or part of one) through Airbnb and Stayz, you will be under the spotlight. The ATO has numerous third-party sources of data which it can use to identify if you are receiving rent, and they are on the look-out for mismatches with the tax return data that you report.

Cryptocurrency

The ATO will also be taking a closer look at the booming market in investments in cryptocurrencies like Bitcoin. Increasing numbers of taxpayers are jumping on the bandwagon and the ATO believes that some of them are failing to declare the profits (and in some cases the losses) they are making on their investments. Remember, investing in cryptocurrencies can give rise to capital gains tax (CGT) on profits. Traders can be taxed on their profits as business income.

To help them in their search, the ATO is collecting bulk records from Australian cryptocurrency designated service providers (DSPs) as part of a data matching program to ensure people trading in cryptocurrency are paying the right amount of tax. Data provided to the ATO includes cryptocurrency purchase and sale information. The data will identify taxpayers who fail to disclose their income details correctly.

The ATO estimates that there are between 500,000 to one million Australians that have invested in crypto assets.

To summarise…

• The ATO is focusing on work-related expenses, investment property claims, sharing economy income, and cryptocurrency reporting.
• Ensure all claims are substantiated with records, understand what you can and can’t claim, and seek our expert advice if unsure.
• You can only claim rent or mortgage payment if you run a business from home—not if you’re just an employee working remotely.

‘Payday Super’ from 1 July 2026: What Employers Need to Know

2025 Federal Budget Tax Updates

Compromised TFN: What You Need to Know

The post ATO Tax Time Hitlist 2025: What the ATO Is Watching This Year appeared first on CGH Accounting.

A key highlight is the reduction in the bottom income tax rate, which will decrease from 16% to 15% in 2026 and further to 14% in 2027. While the financial impact is relatively modest, estimated at approximately $5 per week in 2026 and $10 per week in 2027, the change aims to mitigate bracket creep and lower average tax rates, particularly for low- and middle-income earners. Under these reforms, the average tax rate for an individual earning the national average wage is not expected to exceed 2023-24 levels until at least 2031-32.

Additionally, the government has introduced a $150 energy bill relief payment for all individual taxpayers and small businesses. This measure is intended to help address cost-of-living pressures.

Finally, if you’re a sole trader or small business owner, you’ll want to take note of the significant instant asset write of changes below.

Personal Income Tax Cuts for 2026 and 2027

The government has announced reductions to the personal income tax rate for earnings between $18,200 and $45,000, with rates decreasing as follows:

• From 16% to 15% from 1 July 2026
• From 15% to 14% from 1 July 2027

As a result, every taxpayer will receive a tax cut of up to $268 from 2026, increasing to $536 from 2027.

These reductions, combined with the previously legislated Stage 3 tax cuts effective from 2024-25, will provide an average annual tax reduction of $2,229 in 2026-27 and $2,548 in 2027-28.

This translates to approximately $50 per week in savings compared to 2023-24 tax settings. An individual earning the national average salary of $79,000 is expected to receive a total tax cut of $2,190 in 2027-28.

Medicare Levy Low-Income Threshold Adjustments

To support low-income earners, the government has increased the Medicare levy low-income thresholds for the 2024-25 income year:

• Singles: Increased from $26,000 (2023-24) to $27,222
• Couples with no children: Increased from $43,846 (2023-24) to $45,907
• Additional amount per dependent child or student: Increased from $4,027 (2023-24) to $4,216

For single seniors and pensioners eligible for the Seniors and Pensioners Tax Offset (SAPTO):

• Individual threshold: Increased from $41,089 (2023-24) to $43,020
• Family threshold: Increased from $57,198 (2023-24) to $59,886
• Additional per dependent child or student: $4,216

Increased ATO Funding for Compliance Activities

The government has allocated nearly $1 billion in additional funding to the Australian Taxation Office (ATO) to enhance tax compliance efforts. Key initiatives include:

• Tax Avoidance Taskforce: $717.8 million over 4 years from 1 July 2025 to expand the Taskforce, focusing on multinationals and large corporate entities.
• Shadow Economy Compliance Program: $155.5 million over 4 years from 1 July 2025 to reduce tax evasion in the shadow economy, tackling issues such as worker exploitation, under-reported income, and illicit trade.
• Personal Income Tax Compliance Program: $75.7 million over 4 years from 1 July 2025 to enable the ATO to continue proactive, preventative, and corrective activities in key areas of non-compliance.
• Tax Integrity Program: $50.0 million over 3 years from 1 July 2026 to ensure timely payment of tax and superannuation liabilities by medium and large businesses and wealthy groups.

With the ATO cracking down on compliance, it’s even more important to ensure you stay on top of tax changes and consult your consultant this upcoming tax season.

No Change to Superannuation Guarantee Rate

The government has confirmed that the Superannuation Guarantee (SG) rate will increase as scheduled from 11.5% to 12% on 1 July 2025. This marks the final step in the gradual increase from 9.5% in 2020-21.

Further Energy Bill Relief 

The government will extend its energy bill rebate program until the end of 2025 by providing two additional instalments of $75 for households and small businesses. From 1 July 2025, eligible households and approximately one million small businesses will receive another $150 in rebates, applied automatically to their electricity bills in quarterly instalments.

Reduction of Student Loan Debts

The government will introduce changes that reduce Higher Education Loan Program (HELP) and other student debts for more than three million Australians by around $19 billion. This includes a one-time 20% reduction in outstanding student debt before indexation is applied on 1 June 2025, subject to legislative approval. This measure is expected to remove approximately $16 billion in debt.

Additionally, the government has committed $182.2 million over 4 years from 2024-25 (and $402.3 million from 2028-29 to 2034-35) to reform the student loan repayment system. The reforms will introduce a fairer repayment structure based on marginal tax rates and increase the income threshold before repayments begin. These changes are scheduled to take effect from 1 July 2025, pending legislative approval.

The previously legislated cap on HELP indexation, which ensures debts increase at the lower rate of either the Consumer Price Index or the Wage Price Index, remains in place. This policy, backdated to 1 June 2023, has already reduced outstanding student debt by approximately $3 billion.

The 2025 Federal Budget delivers tax relief for individuals while implementing changes for small businesses and expanding ATO compliance measures. While personal tax cuts provide some financial relief, small businesses should prepare for the reduction in the instant asset write-off next year and increased ATO scrutiny.

To understand how these changes may affect your financial planning and to maximise available incentives, contact us for more information.

‘Payday Super’ from 1 July 2026: What Employers Need to Know

ATO Tax Time Hitlist 2025

Compromised TFN? Here’s What To Expect

The post 2025 Federal Budget Tax Updates appeared first on CGH Accounting.

Key Changes Under Payday Super

1. Super Contributions Due Within Seven Days
Employers will need to ensure SG contributions are deposited into their employees’ super funds within seven calendar days of payday. Failure to do so could result in the SG charge being applied.

2. Simplified Late Contribution Process
Late contributions will automatically be applied to the earliest unpaid period, reducing the administrative burden on employers.

Supporting Changes

Faster Fund Allocation: Super funds will have 3 business days (down from 20) to allocate or return contributions.

Retirement of ATO Small Business Superannuation Clearing House (SBSCH): This service will be discontinued on 1 July 2026, by the ATO, so small businesses will need alternative options.

New Reporting and Penalties

Employers must report ordinary times earnings (OTE) and total super liability through Single Touch Payroll (STP). Failure to pay or report on time will expose employers to increased penalties, especially for repeated offenses.

Impact on Employees

Employees will benefit from real-time monitoring of super payments, ensuring their employers meet obligations promptly.

Preparing for Payday Super

Employers should start preparing now by:

• Updating payroll systems.
• Ensuring compliance with the seven-day window.
• Adapting to new STP reporting requirements.

With payday super, compliance becomes more streamlined, and employees gain transparency over their super contributions.
Please note that Payday Super is not yet law.

Federal Budget Tax Updates

ATO Tax Time Hitlist 2025

Compromised TFN: What You Need to Know

The post ‘Payday Super’ from 1 July 2026: What Employers Need to Know appeared first on CGH Accounting.

If all the accountants in your town suddenly went on strike, can you imagine the mayhem? There would be panic, there would be widespread disorder, possibly rioting – it would be a big mess!

We get a bad rap sometimes for being a bit nerdy, a bit too serious – we need to lighten up…

Really? We think you need your trusted tax professional to take your money matters very seriously. Paying too much tax is no laughing matter! Getting your books all muddled is no joke.

The Joke’s On Us

But hey, we don’t mind having a bit of a laugh at ourselves from time to time, we do have a sense of humour.

CGH has even gone to the trouble to bring to you, our esteemed clients and customers, the best Accountant Jokes going around, in our blogs and newsletters. Here’s a couple we saw recently:

Q: What do accountants suffer from that ordinary people don’t?
A: Depreciation.

Q: Why did the accountant fall over?
A: He lost his balance.

Funny stuff, but on a serious note, let’s cut to the chase and the reason for this Special Update.

Specialists In A Range Of Accounting Fields

CGH Accounting provides all the expertise, advice and assistance you would expect from a quality accounting firm, but we also specialise in a number of areas. Some of you might know this, but many may not, so we have updated our website accordingly with important information, which is discussed below.

We specialise in a number of areas – mainly with regard to tax – but also in all associated services and support.

While many of our clients are located in the Ballarat and Central Highlands and Torquay/Surf Coast regions, even more are not, living and working all over Australia. Yeah, we get around without having to get out of our chairs!

Long Distance Relationships

Having a local accountant who you can drop in and chat to in person used to be the only way to get your tax done.

We’ve been an online accounting and tax practice for more than a decade, so we’ve fine-tuned and honed our skills in successfully managing long distance relationships; we love our clients! ♥

Some of you will have received emails for our office manager Jodie showing how much she loves emojis! 😊🙏🏻🙊

The human connection is not lost with our regular and convenient phone calls at times that suit you and emails you can deal with in your own time and not have to take time off work!

Plus, your relationship with your accountant is one that builds and grows across the years. Because some of our clients have been with us since we began more than 10 years ago, we understand where you’ve come from and where you’re trying to go.

We get the idiosyncrasies and intricacies of your finances, your work, your family and the things you own or hope to own!

There’s nuance involved. Sometimes times are tough, and your accountant may well be the person who gets you through a very difficult period.

But we digress. What are the areas in which we specialise at CGH Accounting? We list them here:

Tradie Accounting

More and more we find ourselves looking after the needs of tradies. This is a rapidly growing demographic in Victoria and the number of tradies living and working in the localities where CGH has offices has increased a lot (we know – we love population data!).

You guys need expert accountants to make sure your books are balanced, your BAS Statements are spic & span and your tax returns claim all the many expenses you have on a daily basis.

Many of you are sole traders and this can be daunting, doing the whole lot on your own. Having a friendly CPA to make sure you’re on the right path is one of the wisest moves you’ll make, as you work hard to grow your business and set up that independent, prosperous lifestyle you’re shooting for.

Read our post on Accounting For Tradies and how we can help you.

Fashion And Retail

We do know how tough it can be in fashion and retail these days, so our support is geared to helping you navigate the sometimes scary waters of running a small business in this sector.

Dealing with issues such as landlords and rent, cashflow and employees are going to be your main concerns, and our accountants and tax advisors at CGH are here for you, not just in June but whenever you need a helping hand or strategic advice on any matter relating to your shop. Just give us a call.

Read our post on Accounting For Fashion and Retail to help maximise your tax return.

Tourism And Hospitality

The Surf Coast and also Ballarat and Central Highlands are two of the hottest spots in Australia for tourism and hospitality (yes it gets stinking hot in Ballarat in the summer!) 🥵

Think The Great Ocean Road, Lorne, Daylesford and Sovereign Hill – millions of people visit these places every year, and so there are many of our clients who run businesses in this sector. It can be tricky.

There’s the seasonality factor; employment rules and regulations can be a minefield, and much more. It’s not an easy game, and long hours are involved. Rest assured, our accountants are willing to put in the long hours for you, to make sure you get the support you need to run your business.

Read our post on Accounting For Those In Hospitality and Tourism

Nurses And Medical Professionals

Where would any of us be without the world’s best healthcare workers, which we are so lucky to have in Australia. We’d all be crook! You are entitled to lots of deductions, we hope you’re aware of that.

If not, let us tell you more about it! You will be pleasantly surprised.

Read our post on Accounting For Nurses and how we can help you with your next tax return.

Police And Defence Force Individuals

We appreciate the heavy lifting you guys do to keep our society safe and provide law and order (accountants love order!).

ADF and Police do qualify for many exemptions and allowances, so it’s important that your accountant takes this into consideration when preparing your tax returns.

Read our post on Accounting For The Defence Forces and how we can help you with your next tax return.

Professional Services

Lawyers, financial planners and other professionals are experts in fields which sometimes cross over with accounting, but do they really have the time and know-how to do their own tax returns?

We think not. Some of you are high income earners and probably pay tax at the highest rate, which isn’t much fun. Let a CGH CPA see if we can’t minimise that for you.

Read our post on Accounting For Professionals.

Medical Practitioners

Chris and CGH have worked with medical specialists and doctors for many years now, and we know all the ins and outs of the technical tax issues associated with working in this critical area.

There are specific ways to prepare the most advantageous tax return for medical professionals; we have the experience and the knowledge to help you make the most of your money.

Read our post for Accounting For The Medical Profession

Construction And Building

We have many clients in construction and building and we understand your concerns and aspirations. Businesses in this field can be complex, so we provide tailored advice to help with issues such as GST, BAS, PAYG and Superannuation. CGH helps builders build their dreams!

Read our post on Accounting For The Building and Construction Sector and how we can help you.

Dental

Our accountants like nothing better than getting their teeth stuck into a dental practitioner’s tax returns.

Your profession is unique, with very high overheads and a lot of tricky stuff around employees, insurance and taxation. Let us put a smile on your face come tax time!

Read our post on Accounting For Dentists and how we can help you.

We Are All Special

Go to our webpage for more information on our Tax Specialties. There’s a lot of helpful information on our website, and we encourage you to have a look, but please do give us a call anytime to discuss your own, unique and special circumstances.

At CGH, we are specialists in our field, and we aim to provide each and every client with a special experience, when it comes to looking after all your accounting needs.

The post CGH Accounting Services | Special Update| May 2025 appeared first on CGH Accounting.

From 1 July 2024, all 13.6 million taxpayers will get a tax cut, which will flow through into their pay packets immediately thereafter. These tax cuts replace the original Stage 3 Tax Cuts which were legislated by the former government.

The tax cuts may provide some relief from the surging cost of living to some taxpayers, especially low and middle income taxpayers.

As originally designed by the Liberal/National government, the tax cuts delivered most of the benefit to those on high incomes. The revised tax cuts see the benefits spread out further, and will now allow people earning $40,000 to get a tax cut of $654 and people earning $80,000 to get a tax cut of $1,679.

Taxpayers don’t need to do anything to get the tax cut. Employers will automatically adjust the amount of tax they take out of your pay which means you should see an immediate increase in take home pay from 1 July 2024*.

Read to see how these tax changes affect you.

*Personal Tax Cuts

The effect of the tax cuts can best be illustrated in table form. The original stage 3 cuts are those suggested by the Coalition and the revised tax cuts are those announced (and legislated) by the Albanese government.

Redistribution of tax cuts

Note: excludes Medicare levy
 

Individuals

Personal Tax Rates Cut

The undoubted headline of this year’s Budget was the cut to personal tax rates, which was initially announced back in January 2024. Key features include:

• A cut in the 19% tax rate to 16%, saving $804 for those on taxable incomes of $45,000.
• A cut in the 32.5% rate to 30% for incomes between $45,000 and $135,000.
• Retaining the 37 per cent rate but increasing the threshold for it to apply to $135,000.
• Retaining the current 45% tax rate but increasing the threshold to $190,000.
• Resident rates and thresholds for 2024-25.

The tax rates and income thresholds from the 2024-25 for residents (as already legislated) are:

Tax rates and income thresholds from 2024-25

Non resident tax rates and threshold for 2024-25

For 2024-25 and later income years, the tax rates for foreign residents are:

• $0 – $135,000 – 30%;
• $135,001 – $190,000 – 37%;
• $190,001+ – 45%.

Working holidaymakers

For 2024-25 and later income years, the rates of tax for working holiday makers are:

• $0 – $45,000 – 15%;
• $45,001 – $135,000 – 30%;
• $135,001 – $190,000 – 37%;
• $190,001+ – 45%.

Low Income Tax Offset (unchanged)

No changes were made to the low income tax offset (LITO) in the 2024-25 Budget.

The maximum amount of the LITO is $700. The LITO is withdrawn at a rate of 5 cents per dollar between taxable incomes of $37,500 and $45,000 and then at a rate of 1.5 cents per dollar between taxable incomes of $45,000 and $66,667.

Medicare low-income thresholds for 2023-2024

The Medicare-levy low-income thresholds for 2023-24 would normally have been announced in this 2024-25 Budget. However, the Government released the 2023-24 Medicare levy thresholds on 25 January 2024 when it announced the changes to the Stage 3 tax cuts (see above). The new thresholds to provide cost-of-living relief were enacted by the Treasury Laws Amendment (Cost of Living – Medicare Levy) Act 2024.

From the 2023-24 income year, the Medicare levy low-income threshold for singles has been increased to $26,000 for 2023-24 (up from $24,276 for 2022-23). This represents an increase of 7.1 per cent, in line with inflation.

For couples with no children, the family income threshold is $43,846 (up from $40,939 for 2022-23). The additional amount of threshold for each dependent child or student is $4,027 (up from $3,760).

For single seniors and pensioners eligible for the SAPTO, the Medicare levy low-income threshold is $41,089 (up from $38,365). The family threshold for seniors and pensioners is $57,198 (up from $53,406), plus $4,027 for each dependent child or student (up from $3,760).

Student loan indexation to be reformed

In a welcome move by many, the government is to reform the indexation of HECS and HELP debts to the lower of the consumer price index (CPI) and the wage price index (WPI). This move is to be backdated to June 2023, which means that last year’s increase of 7.1 per cent will be lowered to the WPI of 3.2 per cent. This will wipe out around $3 billion in student debt from more than three million Australians.

The effect of this measure can be seen in the following table:

Small Business

Instant Asset Write Off Extended For A Further Year

The instant asset write-off is to be retained for a further year through to 30 June 2025.

Small Businesses i.e., those with aggregated annual turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2024 and 30 June 2025. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

Assets valued at $20,000 or more (which cannot be immediately deducted) can be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.

This measure was already in force for the year through to 30 June 2024 and its extension represents a welcome break for small businesses.

Tax Compliance

ATO Personal Tax Compliance Program extended

The Government will extend the ATO Personal Income Tax Compliance Program for one year from 1 July 2027.

This extension will enable the ATO to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance, including overclaiming of deductions, incorrect reporting of income and inappropriate tax agent influence. This will enable the ATO to continue its focus on emerging risks to the tax system, such as deductions relating to short-term rental properties.

ATO counter-fraud strategy

The Government will provide $187.0 million over four years from 1 July 2024 to the ATO to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems. Funding includes:

• $78.7 million for upgrades to information and communications technologies to enable the ATO to identify and block suspicious activity in real time
• $83.5 million for a new compliance taskforce to recover lost revenue and intervene when attempts to obtain fraudulent refunds are made
• $24.8 million to improve the ATO’s management and governance of its counter-fraud activities, including improving how the ATO assists individuals harmed by fraud.

The Government will also strengthen the ATO’s ability to combat fraud by extending the time the ATO has to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation. The ATO’s mandatory notification period for BAS refund retention will be increased from 14 days to 30 days to align with time limits for non-BAS refunds.

This will have effect from the start of the first financial year after Royal Assent of the enabling legislation.

Foreign Resident Capital Gains Tax Regime To Be Strengthened

The Government will strengthen the foreign resident capital gains tax (CGT) regime to ensure foreign residents pay their fair share of tax in Australia and to provide greater certainty about the operation of the rules. The amendments will apply to CGT events commencing on or after 1 July 2025 to:

• clarify and broaden the types of assets that foreign residents are subject to CGT on
• amend the point-in-time principal asset test to a 365-day testing period
• require foreign residents disposing of shares and other membership interests exceeding $20 million in value to notify the ATO, prior to the transaction being executed.

This measure will ensure that Australia can tax foreign residents on direct and indirect sales of assets with a close economic connection to Australian land, more in line with the tax treatment that already applies to Australian residents. The new ATO notification process will improve oversight and compliance with the foreign resident CGT withholding rules, where a vendor self-assesses their sale is not taxable real property.

ATO to be granted greater discretion over old tax debts

The government will amend the tax law to give the Commissioner of Taxation a discretion to not use a taxpayer’s refund to offset old tax debts, where the Commissioner had put that old tax debt on hold prior to 1 January 2017. This discretion will apply to individuals, small businesses and not-for-profits.

Superannuation

Paying super on Government Paid Parental Leave from 1 July 2025

The Budget confirmed the proposal to pay superannuation on Government-funded Paid Parental Leave (PPL) for births and adoptions on or after 1 July 2025. From that time, the super guarantee (SG) rate will be 12% (up from 11.5% for 2024-25). Therefore, eligible parents will receive an additional payment (12% of their PPL payments) as a contribution by the Government to their superannuation fund.

Here’s our article on Tax Scam, How To Spot Them and How To Deal With Them

Each year the ATO focuses on certain hotspots. Here’s What To Be Aware Of.

The post 2024 Federal Budget Tax Updates appeared first on CGH Accounting.

There are unfortunately many different ways that scam artists can trick both individuals and small businesses from parting with their hard-earned money at the end of the financial year. So it literally pays to be aware of the most common tricks, as well as some of the new and creative ways these criminals will try to get a foot in the door.

Here are some of the most common methods in play right now:

Telephone Scams

Scammers pretending to be from the ATO are calling people and telling them they have a tax debt that they need to pay straight away.

While the ATO will use phone, email and SMS to contact you, they will never:

• send a pre-recorded message to your phone
• threaten you with immediate arrest
• demand payment through unusual methods like gift cards or payments to personal bank accounts
• insist you stay on the line until a payment is made.

Phone calls from the real ATO will show up as ‘No caller ID’ on your phone.

If you’re ever unsure whether it’s really the ATO, do not reply. You should phone the ATO on 1800 008 540 to check or contact CGH Accounting.

Text Message Scams

Another scam involves a text message supposedly from ‘ATO refund’ offering a tax refund to the recipient. If you click on the link, you’ll be asked for your personal details, Tax File Number (TFN) and credit card number, including the three digit security code on the back. Supposedly, this is so the refund can be deposited in your account but, in reality, it’s so that the scammer can steal money from your credit card.

A slight variation on the same scheme involves the scammer asking for a small fee to be paid via your credit card in order to access your refund. Shortly after paying, much larger deductions will be charged to your card.

Email Scams

Phishing scams, in which fake emails are sent out that appear to be from the ATO are also popular and these often feature a subject line that includes the words “tax refund”. These can include a link to a fake website that asks you to enter all of your confidential personal information such as your Tax File Number, bank account details, date of birth, home address and employment information. Or, alternatively, the email may contain a link that unleashes a virus on your computer.

SMS And Email Scams – Cryptocurrency

Scammers pretending to be from the ATO are telling people they are suspected of being involved in cryptocurrency tax evasion. They are then asking them to ‘connect their wallet’ and provide detailed information via a link.

If you receive an SMS or email like this, don’t click on the link. It will take you to a fake myGov log on page, designed to steal your personal information.

Scams Advertised On Social Media

There have been an increasing number of scams, often advertised on social media platforms like, Facebook, Twitter and Instagram involving fake tax file number (TFN) applications.

These scams tell people they can help them get a TFN for a fee, but instead of delivering this service, these fraudulent websites steal the person’s money and personal information.

Be Aware – And Take Action

All calls, messages and emails of this kind should be treated with extreme caution. The ATO, Centrelink, banks and financial institutions will never contact you to request verification of personal details for any reason, including tax returns.

Do Not Click On Any Links, Reply Email Or Call

Do not click on any link in the message or email, or call a phone number provided by the email.
If you are unsure about the authenticity of a phone call, text message or email, hang up the call, ignore the message, and contact the official company communication line to verify.

Unfortunately, the clever methods of these scammers are often successful, with more than $2.1 million paid to tax scammers pretending to the be ATO during the 2019 year.

If You Have Been Scammed, Notify The Relevant Institution Immediately

If you have provided a scammer with funds or provided personal details, immediately notify the relevant institution – your bank, the ATO or police authorities about your compromised personal details to receive prompt and relevant advice.

You may also like our article on Key ATO Compliance Areas For 2024

Here’s the latest on the 2024 Federal Budget and How It Affects You

The post Tax Scams: How To Spot Them And How To Deal With Them appeared first on CGH Accounting.

So, what is on the ATO’s list this year? Expect them to be looking in particular at:

• Record-keeping
• Work-related expenses
• Rental property income and deductions
• Sharing economy income; and
• Capital gains from crypto assets, property, and shares.

Let’s take a look at each of those areas below to understand why they will be receiving so much attention from the ATO this year.

Work Related Expenses

The ATO recently claimed that there was an $8.7 billion shortfall between the tax individuals are expected to pay and the tax they are paying. ATO believes that work-related expenses claims are the biggest element in that “tax gap” and have signalled that they’ll be looking closely at these deductions this year. Expect them to focus on:

•  Deductions for working from home expenses. The way these could be claimed changed last year, with the introduction of a new 67 cents per hour fixed rate and enhanced substantiation requirements. We expect the ATO to check claims thoroughly, particularly to verify whether taxpayers have a record of all their working from hours over the entire tax year, in the form of timesheets, a diary or copy of work rosters.

• Similarly, deductions for “occupation” costs like rent, rates and mortgage interest are under the spotlight as they are not allowable unless you’re running a business from home.

• Mobile phone and internet costs, with a particular focus on people who are claiming the whole (or a substantial part) of the bill for their personal mobile as work-related. They will also be on the lookout for people who are potentially “double dipping” (ie, claiming the 67 cents per hour working from home rate – which includes an element for mobile phone costs – as well as claiming their mobile costs separately. Remember, you can’t do both!).

• Claims for work-related clothing, dry cleaning and laundry expenses

• Overtime meal claims

• Union fees and subscriptions

• Motor vehicle claims where taxpayers take advantage of the 85 cent per kilometre flat rate available for journeys up to 5,000kms (the ATO is concerned that too many taxpayers are automatically claiming the 5,000km limit regardless of the actual amount of travel)

• Claiming invalid expenses, the ATO believes many taxpayers are claiming the $300 receipt-free threshold, without incurring any expense at all.

CGH Accounting’s Top Tip #1

Before making a claim, ensure that you understand what you can and can’t claim and that you have the necessary expenditure proof (invoices, receipts, diaries, etc) and that you can prove it was work or business-related.

Property Spotlight

Another main focus this year is on people who claim investment property and holiday home deductions. The ATO recently announced that in a series of audits, they found errors in 90% of returns reviewed. So, this year, expect them to focus on the following:

• Excessive interest expense claims, such as where property owners have tried to claim borrowing costs on the family home as well as their rental property.

• Incorrect apportionment of rental income and expenses between owners (e.g. deductions on a jointly owned property are claimed by the owner with the higher taxable income, rather than being split).

• Holiday homes that are not genuinely available for rent. Rental property owners should only claim for the periods the property is rented out or is marketed for rent. Periods of personal use can’t be claimed.

• Incorrect claims for newly purchased rental properties. The costs to repair existing damage and defects at the time of purchase or the costs of renovation cannot be claimed immediately. These costs are instead deductible over a number of years.

CGH Accounting’s top tip #2

“If you can’t substantiate it, you can’t claim it”. Property owners need to ensure they’re keeping clear records (which ties into the ATO’s record-keeping crack down). It’s essential to keep invoices, receipts and bank statements for all property expenditure, as well as proof that your property was available for rent, such as rental listings.

Sharing Economy

The ATO is convinced that many people in the sharing economy are not properly declaring their profits and gains. So, if you obtain work through Uber, Airtasker or any of the many sharing economy platforms which allow you to rent out assets or your personal services, take heed. The ATO is now receiving reports from many platforms (including Uber), which it can use to highlight data mismatches.

Similarly, if you rent out a property (or part of one) through Airbnb and Stayz, you will be under the spotlight. The ATO has numerous third-party sources of data which it can use to identify if you are receiving rent and they are on the look-out for mismatches with the tax return data that you report.

Cryptocurrency

The ATO will also be taking a closer look at the booming cryptocurrency market, with focus into investments such as Bitcoin. Increasing numbers of taxpayers are jumping on the bandwagon and the ATO believes that some of them are failing to declare the profits (and in some cases the losses) they are making on their investments. Remember, investing in cryptocurrencies can attract capital gains tax (CGT) on profits. Traders can be taxed on their profits as business income.

To help them in their search, the ATO is collecting bulk records from Australian cryptocurrency designated service providers (DSPs) as part of a data matching program to ensure people trading in cryptocurrency are paying the right amount of tax. Data provided to the ATO includes cryptocurrency purchase and sale information. The data will identify taxpayers who fail to disclose their income details correctly.

The ATO estimates that there are between 500,000 to 1,000,000 Australians that have invested in crypto-assets.

Shares

When you dispose of shares, assuming you are an investor, not a trader, you will normally have to pay CGT on any profits.

Typically, CGT arises when you sell shares but can also happen if you give them away or you stop being an Australian resident. CGT is taxed on any increase in value from the point the share was acquired.

Sometimes the proceeds and cost base of the share are not what was actually paid and/or received, but rather, the market value of the asset. This is typically to prevent people from minimising their tax by, say, selling the share to a relative for a low price.

If you dabble regularly in buying and selling shares, you could be deemed a share trader, rather than a share investor. If that’s the case, the tax you pay could look very different.

A share trader is someone who buys and sells shares purely for short term profits. Signs that you’re a trader include:

• Lots of transactions

• A clear profit making intent

• You run your activities in a business-like manner (e.g., a large investment of capital, a well-developed business plan, extensive research and properly maintained books and records).

• Someone who buys and sells shares as part of a business will treat those shares as trading stock, and gains or losses on them will be taxed as ordinary income (effectively as business profits) rather than capital gains.

You can see from the above that there is ample opportunity to get the tax treatment wrong or mischaracterize income in a way that gives you a tax advantage, hence the ATO interest in this area.

CGH Accounting’s top tip #3

Ensure you have the necessary information about all your share sales so you can report this to the ATO. You’ll need details of the original purchase cost, the sales proceeds, the dates of acquisition and sale and any associated costs (eg, brokerage fees).

You may also like our article on Tax Scams, What To Watch For And How To Deal With Them

The post Key ATO Tax Compliance Focus Areas for 2024 appeared first on CGH Accounting.

CGH Accounting Tax Checklist 2024

If you have any questions, please send us an email or give us a call.

The post The CGH Accounting Tax Checklist 2024 appeared first on CGH Accounting.