Practice Update - December 2020

Improvements to be made to full expensing measure

The Government has announced it will expand eligibility for the temporary full expensing of depreciating assets measure, which temporarily allows certain businesses to deduct the full cost of eligible depreciable assets in the year they are first used or installed.

As part of the 2020/21 Budget announcements, businesses with a turnover of up to $5 billion would be able to immediately deduct the full cost of eligible depreciable assets as long as they are first used or installed by 30 June 2022.

Now the Government will also allow businesses to opt out of temporary full expensing and the backing business investment incentive on an asset - by - asset basis.

This change will provide businesses with more flexibility in respect of these measures, removing a potential disincentive for them to take advantage of these incentives. This may be relevant where the automatic application of full expensing might cause the entity to make a loss

JobMaker Hiring Credit legislation has passed

The Government has now passed legislation to establish the JobMaker Hiring Credit, which is part of the Government's economic response to the COVID-19 pandemic. The JobMaker Hiring Credit is specifically designed to encourage businesses to take on additional young employees and increase employment.

It does this by providing employers with a fixed amount, paid quarterly in arrears by the ATO, of:

$200 per week for an eligible employee aged 16 to 29 years; and
$100 per week for an eligible employee aged 30 to 35 years.

To be eligible, the employee must have been receiving JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months, assessed on the date of employment. Employees also need to have worked for a minimum of 20 hours per week of paid work to be eligible, averaged over a quarter, and can only be eligible with one employer at a time.

The hiring credit is not available to an employer who does not increase their headcount and payroll. Employers and employees will be prohibited from entering into contrived schemes (for example, by laying-off staff and re-hiring them) in order to gain access to or increase the amount payable.

Existing rights and safeguards for employees under the Fair Work Act will continue to apply, including protection from unfair dismissal and the full range of general protections.

ATO Visa Data Matching Program

The ATO will acquire visa data from the Department of Home Affairs for 2020/21 through to 2022/23, relating to approximately 10 million individuals for each financial year.

The data will be used to identify non-compliance with obligations under taxation and superannuation laws, including registration, lodgement, reporting and payment responsibilities.

STP data-sharing with Services Australia

Single Touch Payroll ( STP ) allows the ATO to share data in real-time with other government agencies, to "help them deliver government services to the Australian community".

As part of the ATO's data-matching program, it has a STP data-sharing arrangement with Services Australia to help them administer Australia's welfare system.

This means that people who are on an income support payment from Services Australia and need to report their employment income fortnightly to Centrelink will now see their employer details are pre-filled.

Proposed FBT exemption - retraining and reskilling

The Government has announced it will introduce an exemption from FBT for retraining and reskilling benefits provided by employers to redundant, or soon to be redundant, employees where the benefits may not be related to their current employment.

It is proposed that this FBT exemption will not apply to :

retraining provided under a salary packaging arrangement;
training provided through Commonwealth supported places at universities; or
repayments towards Commonwealth student loans.

If enacted, this proposed measure is intended to apply from the day it was announced, which was 2 October 2020.

We note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information's applicability to their particular circumstances.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

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Practice Update – July 2025

July 4, 2025

Changes to car thresholds from 1 July The car limit for the 2026 income year is $69,674. This is the highest value that a taxpayer can use to calculate depreciation on a car where they use the car for work or business purposes and they first use or lease the car in the 2026 income year. If a taxpayer is buying a car and the price is more than the car limit, the highest input tax ( GST ) credit they can claim (except in certain circumstances) is one-eleventh of the car limit. For the 2026 income year, the highest input tax credit they can claim is $6,334 (i.e. one-eleventh of $69,674). The luxury car tax ( LCT ) threshold for the 2026 income year is $91,387 for fuel-efficient vehicles, and $80,567 for all other luxury vehicles. Input tax credits need to be claimed within the four-year time limit. A taxpayer cannot claim an input tax credit for luxury car tax when they buy a luxury car, even if they use it for business purposes.

Audit Lowe Down – Large proprietary limited – are you one? Tips and traps for your assessment

July 1, 2025

Large proprietary limited – are you one? Tips and traps for your assessment. In Australia, being classified as a large proprietary limited company means that you have to prepare, and lodge audited financial statements with ASIC under the Corporations Act 2001 (the Act), however many companies are not necessarily applying the thresholds appropriately. A proprietary company is large if it meets at least 2 of the following thresholds: Consolidated revenue ≥ $50 million Consolidated gross assets ≥ $25 million 100 or more employees. These thresholds seem simple, however some points to note: The calculations must be performed applying ALL accounting standards so even if you are preparing special purpose financial statements, then you will need to assess these thresholds as if you were applying all standards, including: AASB 16 Leases – this standard would add a right of use asset to your balance sheet potentially significantly increasing your gross assets. AASB 10 Consolidated Financial Statements – if you have controlled entities then the inclusion of their income statement and balance sheet may significantly increase each of the thresholds. AASB 128 Investments in Associates and Joint Ventures / AASB 11 Joint Arrangements – if you have entities over which you have significant influence or joint control then applying equity accounting or including your share of assets and revenue would affect the thresholds. In determining the number of employees, the Act is clear that it is all full-time and part-time employees (on a pro-rata basis), however casual employees need to be considered. For example, are they genuinely casual with varying hours / shifts each week or are they in substance a permanent member of your team but just employed on a casual basis. The thresholds need to be met at the end of the financial year and therefore entities should track their performance during the year so they are aware if they will meet the definition of a large proprietary company at year end.

Audit Lowe Down – Incorrect presentation of your liabilities could significantly affect your balance sheet

June 17, 2025

In a previous blog, we discussed the changes to the accounting standards relating to classification of current / non-current liabilities on the balance sheet. We have been receiving a number of questions on this topic and have provided some practical scenarios below as well as some actions for you as we approach 30 June reporting dates.