Understanding Account-Based Pensions

Your BAS refunds are under scrutiny after ATO extends notification period The Australian Taxation Office (ATO) is now allowed additional time to notify taxpayers when their business activity statement (BAS) refunds are withheld for verification of information. From 1 April 2025, the notification period for the Commissioner has extended from 14 days to 30 days, allowing more time for ATO to assess high risk BASs and to align with the notification period for refunds arising from income tax returns. The Commissioner may retain a refund if it would be reasonable to require verification of information relating to the refund amount under s 8AAZLGA(3)(a) of the Tax Administration Act 1953. If the Commissioner does not notify the taxpayer that the refund is being retained before the end of 30 days (previously 14 days), the refund must be released to the taxpayer. Factors determining retention of refunds The factors the Commissioner considers in deciding whether to retain a refund are: the likely accuracy of the information — for example, unusually high or low claim amounts the likelihood that the information was affected by fraud, evasion or intentional disregard of a taxation law the impact of retaining the amount on the entity’s financial position — for example, solvency needs the complexity that would be involved in verifying the information, and whether the information provided by the taxpayer is consistent with information previously provided. Risk mitigation steps If you are lodging a BAS with a large refund, note that the refund may be delayed as the ATO may scrutinise that BAS and identify it as high risk. It is important in all cases to have the necessary records on file to justify the information in the BAS. Any legitimate refunds retained for over 14 days would result in the ATO paying interest to you (as is currently the case). If you have any queries in relation to this measure, please feel free to contact our office.

Family Trust Elections – How to avoid the 47% tax rate If your family trust has made a Family Trust Election, please read this.

Banks can create money

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Labor's $1,000 instant tax deduction aims to simplify claiming work-related deductions As promised in its election campaign, the Labor Government may introduce a $1,000 instant tax deduction for work-related expenses from the 2026–27 income year. Simplifying claiming work-related deductions The proposed measure will allow taxpayers to choose to claim a $1,000 instant tax deduction instead of claiming individual work-related expenses. Taxpayers who choose to claim this instant deduction will not be required to collect receipts for deductions less than $1,000 in total. Eligibility To be eligible for the instant tax deduction: a taxpayer must earn labour income for example salaries and wages a taxpayer must not exclusively earn business or investment income. Taxpayers who earn business or investment income may continue to claim their tax deductions in the usual way. Other deductions Charitable donations and other non-work related deductions would continue to be claimed on top of this instant tax deduction. This concession will be welcomed by many workers, but it does not seem to make sense from the Government point of view. If a taxpayer has under $1,000 in deductions, he or she can choose the $1,000 deduction. If the actual deductions are more than $1,000 he or she will naturally claim the higher amount. From the ATO point of view, this seems to be a case of "Heads the taxpayer wins and tails we lose". The concession is not peanuts. it is expected to increase tax refunds by $2.4 billion "over the forward estimates" which is code for the next three years, but as it does not start until 2026-27 tax returns, that appears to translate to $1.4 billion per year. Perhaps we should not get to excited until we see the wording of the actual legislation. Contact Us Have queries? We are here to help you navigate through them, please feel free get in contact with us.

Here’s the lowdown on the new Voluntary Small Business Wage Compliance Code and what it means for your business.

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