Practice Update - April 2022

Lowe Lippmann Chartered Accountants

Practice Update - April 2022

2022-2023 Budget Measures that are now law


Low and Middle Income Tax Offset


A measure that will no doubt be beneficial for individual taxpayers is the increase in the Low and Middle Income Tax Offset (LMITO) for the 2022 income year by $420. The LMITO is a tax offset which reduces an individual taxpayer’s tax liability.


This means that the maximum amount of the LMITO for the 2022 income year will now be $1,500 (up from $1,080 for the 2021 income year).


However, it should be noted the LMITO will not be extended to the 2023 income year.


Reduction in Fuel Excise


Fuel excise on petrol and diesel will be reduced by 50% (a reduction of 22.1 cents per litre) from 30 March 2022 to 28 September 2022. 


This temporary reduction in the fuel excise is to soften the impact of increased petrol and diesel prices that have been triggered by Russia’s invasion of Ukraine.


Tax deductions for work-related COVID-19 tests


Last month’s edition of Practice Update discussed a proposal for COVID-19 tests, to be both:

  • tax-deductible; and
  • exempt from FBT;

broadly where they are purchased for work-related purposes.The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.


This proposed legislative change is now law with effect from 1 July 2021.


Following the release of the 2022/23 Federal Budget on the evening of Tuesday 29th March 2022, Lowe Lippmann was pleased to provide summary and full commentary updates – to view click here.



Reminder of March 2022 Quarter Superannuation Guarantee


Employers are reminded that their Superannuation Guarantee (SG) obligation for the 1 January 2022 to 31 March 2022 quarter is due by 28 April 2022.


An advance warning is also provided to employers that the compulsory 10% SG rate is going to increase to 10.5% from the period 1 July 2022 to 30 June 2023. 


So now might be a good time to ensure your payroll systems and SG calculators are updated by the start of the next income year.



Cents per kilometre deduction for car expenses – 2023 income year


The ATO has proposed for individual taxpayers that use the cents per kilometre method when calculating tax deductions for their work-related car expenses, that the rate per kilometre for the income year starting 1 July 2022 (the 2023 income year) will be 75 cents per kilometre.


This is an increase from the 72 cents rate applicable for both the 2021 and 2022 income years.

A reminder that the ability to claim a deduction under the cents per kilometre method is subject to a cap of 5,000 business kilometres annually. 


Individual taxpayers will claim deductions for work-related car expenses (where eligible) under one of two alternative methods: the log-book method or the cents per kilometre method.


Many taxpayers find that they are not able to use the log-book method as they have not maintained a valid 12-week logbook in the last five years.



JobMaker Year 2: adjusting baseline headcount


If you have been claiming the JobMaker Hiring Credit, please be aware that the ATO will now calculate an adjusted baseline headcount for the claim. 


The ATO will amend the prefill in the claim form based on information provided in earlier claims. The ATO does this each period by calculating the greatest headcount increase that occurred in a period that began 12 months or more before the current claim period.  The ATO then adds that increase to the baseline headcount.


This adjustment will happen because eligible businesses can only claim the JobMaker Hiring Credit for up to a year for each additional job they create.


The baseline headcount is an integrity measure designed to ensure that where an employer is claiming a JobMaker Hiring Credit for a new employee aged between 16-35, that they have also increased their overall number of employees. This is designed to prevent employers terminating the services of current employees and then replacing them with employees aged 16-35. 


Broadly speaking, to qualify for the JobMaker Hiring Credit an employer needs to have not only employed an eligible individual but to have also increased their overall employee headcount.


Re-contribution of COVID-19 early release super amounts


Individuals can now re-contribute amounts they withdrew under the COVID-19 early release of super program without the re-contribution counting towards their non-concessional contributions cap. 


These contributions can be made between 1 July 2021 and 30 June 2030. Individuals can make COVID-19 re-contribution amounts to any fund of their choice where the funds' rules allow.


COVID-19 re-contribution amounts are reported as personal contributions. If the fund member is found to be ineligible to make the re-contribution (for example, the fund member may be required to satisfy the work test and does not do so at the time of a re-contribution) it may result in that member exceeding their non-concessional contributions cap.


It should be noted that once an amount originally withdrawn under the COVID-19 early release of super program has been re-contributed into a superannuation fund, it will not be able to be released from that fund until the fund member satisfies a condition of release – such as obtaining the age of 65 or having met their preservation age and they have “retired”. 


Penalties for overdue Taxable payments annual report


The Taxable payments annual report (TPAR) must be lodged by 28 August each year. Taxpayers who operate in certain industries and that make payments to contractors may need to report these payments in a TPAR.


Affected industries where taxpayers may have an obligation to lodge a TPAR are:

  • Cleaning services;
  • Building and construction services;
  • Road freight;
  • Courier services;
  • Information technology services;
  • Security, investigation or surveillance services.


From 23 March 2022, the ATO will apply failure to lodge penalties to those who:

  • did not lodge their 2021 or prior year TPAR;
  • have already been sent three non-lodgment letters about their overdue TPAR;
  • do not respond to an ATO follow-up phone call about their overdue TPAR.


In the coming weeks the ATO may be phoning tax agents (or taxpayers directly) about their overdue TPAR, to follow up the non-lodgment letters that have been sent.



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

July 21, 2025
New Tax Agent Obligations from 1 July 2025 From 1 July 2025, “small” firms of tax practitioners (with 100 or less employees) must ensure they are complying with the eight new Code of Professional Conduct obligations from the Tax Practitioners Board ( TPB ). These new Code obligations were introduced by the Government under the Tax Agent Services (Code of Professional Conduct) Determination 2024. The new Code obligations have already commenced for large tax practitioners (with over 100 employees) from 1 January 2025. As tax agents, Lowe Lippmann Chartered Accountants are committed to upholding our professional and regulatory obligations, including with the Tax Agent Services Act 2009 which includes the Code of Professional Conduct as regulated by the TPB.
July 16, 2025
Related parties – what should I consider in identifying them? Related party disclosures is an area that is receiving more scrutiny from stakeholders in both the for-profit and the not-for-profit space. Disclosure of transactions that have occurred with related parties are important since the terms and conditions are often different from those with unrelated parties, in some instances the transactions may have occurred for much lower or even nil consideration. Often one of the biggest challenges for compiling the disclosures is working out who is a related party of an entity. The definition of related parties in AASB 124 Related Party Disclosures is detailed, however we have summarised the definition into various elements below. a. Think about entities who might be related to the reporting entity i.e.: i. through control or significant influence, ii. by the existence of material transactions or iii. dependence on technical information or personnel provided by them. b. Think about people who might be related to the reporting entity, i.e.: i. Key management personnel, including all directors. ii. Close family members of key management personnel (e.g. spouse, child). c. Think about entities that the people identified in b. might control or significant influence, i.e.: i. Family businesses ii. Businesses which a close family member controls (i.e. senior partner in a legal or accounting firm). Once you have identified a complete list of who is potentially a related party, analysis can then be performed to confirm they meet the criteria in AASB 124 and then identify any transactions with these parties. Remember that transactions should be included whether or not a price was charged or whether the transaction was formally documented or not.
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.
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