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.

Tax Alert - High Court decision and ATO statement on Bendel’s Case

July 7, 2026
High Court decision and ATO statement on Bendel’s Case The High Court recently handed down its decision in Bendel’s Case, confirming that an unpaid present entitlement (or UPE) between a discretionary trust and a beneficiary company does not fall within the extended definition of a “loan” for Division 7A purposes. The Australian Taxation Office released a Decision Impact Statement in response to the High Court findings, concluding the High Court's reasoning makes it clear that where a beneficiary company is entitled to a share of trust income that remains unpaid (a UPE) and the company takes no positive actions to call for payment of the entitlement, this will not fall within the expanded definition of a "loan" for Division 7A purposes. This is in contradiction to the ATO’s historical position that treated UPEs as "loans".

Practice Update – July 2026

July 5, 2026
Government's tax reform package The Government has recently legislated several of the tax reform measures announced in the 2026 Federal Budget (and in later media releases). These include, among other things: Replacing the CGT discount with cost base indexation and a 30% minimum tax on gains accruing from 1 July 2027 (including gains on pre-CGT assets); Increasing the small business turnover threshold for the 50% active asset reduction from $2 million to $10 million; Limiting negative gearing for residential property to new residential dwellings from 1 July 2027 (subject to transitional rules); and Introducing the Working Australians Tax Offset from 1 July 2027, and the $1,000 instant tax deduction for work-related expenses from 1 July 2026. After a round of consultation, the Government has also announced further proposed measures, broadly including (among others): A new targeted CGT discount for investors in innovative start-ups; Barring SMSFs from utilising future limited recourse borrowing arrangements ( LRBAs ) to acquire residential property; and  Exempting income of discretionary testamentary trusts from the minimum tax proposed for trusts. We recently released a Tax Alert considering the legislation restricting SMSFFs using residential property LRBAs – to read click here . For full details of each of the 2026 Federal Budget announcements, please see our Federal Budget Tax Alert – to read click here .

Tax Alert - Legislation restricting SMSFs using residential property LRBAs has now passed Parliament

June 28, 2026
Legislation restricting SMSFs using residential property LRBAs has now passed Parliament The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 ( the Reform No 1 Bill ) was passed by Parliament on Thursday 25 June 2026. Schedule 5 of the Reform No 1 Bill amends section 67A of the Superannuation Industry (Supervision) Act 1993 to restrict future limited recourse borrowing arrangements ( LRBAs ) on real property to investments in “business real property” (as defined in section 66 of the SIS Act). Residential property of any kind is excluded from the definition of “business real property” in section 66 of the SIS Act. We note this also excludes newly constructed residential property, which is a distinction at odds with recent exemptions being given to new-builds with other Budget Night tax changes relating to negative gearing and restricting the CGT 50% discount. Super funds are not generally allowed to borrow for investments, but there has been a concession allowing a self-managed super fund ( SMSF ) to borrow money to buy single assets like property, if their loans were set up in line with particular requirements, known as LRBAs. This change means an SMSF will not be able to borrow to buy residential property after the start date of these changes.
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