Practice Update – November 2026

Lowe Lippmann Chartered Accountants

ATO to continue accepting credit cards until 30 June 2027, but the clock it still ticking


Last month, in our Practice Update for October 2026 (see here), we noted the Australian Tax Office (ATO) announced it will stop accepting credit cards as a payment method after 30 November 2026, following the Reserve Bank of Australia’s (RBA) ban on card surcharges from 1 October 2026.


The ATO has since confirmed that it will continue to accept credit card payments for tax obligations until 30 June 2027. After 30 June 2027, taxpayers who wish to continue using a credit card to meet their tax obligations may continue to use third-party payment providers as outlined at www.ato.gov.au/howtopay


What do these change mean for you?


The extension does not cancel the planned withdrawal of direct credit card payments. From 1 July 2027, you will need to use another method to pay the ATO directly. Available alternatives include:


  • Debit card
  • BPAY
  • Bank transfer
  • Direct debit
  • Payment at Australia Post (where available)
  • International money transfer services (where applicable)

Some third-party payment providers may continue to offer ways to pay tax using a credit card after the deadline. However, these services may charge additional fees and take longer to process payments. Check the total cost, processing time and payment conditions before relying on one.


Why does your payment method matter?


Credit cards can help bridge short-term cash-flow gaps, but the convenience comes at a cost. Interest, annual fees and other charges can erode the benefit, particularly if you regularly carry a balance. There is also a risk that a payment will not be processed in time, potentially leaving you with an overdue tax liability and additional interest.


Switching to BPAY, bank transfer or direct debit may provide a simpler and more predictable way to manage tax payments. The right option will depend on your circumstances, including when funds are available in your business account and whether you need to retain flexibility over payment dates.


Pay particular attention if you have an existing ATO payment plan linked to a credit card. The ATO has been contacting affected taxpayers, but you should check your own arrangements rather than assume they will continue unchanged. Confirm how future instalments will be paid and allow enough time to update the payment method before the deadline.


What should you do now?


Use the extended timeframe to prepare rather than leaving the change until the last minute.


  1. Review your current arrangements. Check whether you use a credit card for one-off tax payments, regular instalments or an ATO payment plan.
  2. Choose an alternative. Consider which payment method best suits your cash-flow cycle, taking account of fees and processing times.
  3. Update recurring payments early. Make sure any new arrangements are in place well before 30 June 2027 and check that payments are processed successfully.
  4. Review your cash flow. If you rely on the credit card interest-free period to manage tax liabilities, consider whether you need to set aside funds earlier or adjust your payment planning.
  5. Seek advice if needed. If tax payments are putting pressure on your cash flow, speak with us early so we can help you review your position and consider practical ways to manage upcoming liabilities.


The extension to 30 June 2027 gives businesses more time to adjust, but it should not be mistaken for a permanent reprieve. Planning ahead can help you avoid unnecessary fees, missed payments and last-minute disruption when the ATO’s direct credit card facility closes.

ATO focus on omitted income, private expenses and GST


The ATO is stepping up compliance action against businesses that omit income, over-claim expenses and GST credits, or use business income to pay for private expenses. Common errors the ATO continues to see include:


  • not reporting all business income, including cash sales and contractor income;
  • paying workers in cash to avoid tax and super obligations;
  • claiming private expenses as business deductions, or incorrectly claiming GST credits;
  • using business bank accounts, credit cards or assets for private expenses; and
  • failing to keep accurate records of business transactions.


The ATO reports that its audits uncovered more than $210 million in unpaid taxes in the 2026 income year.


The ATO also issued more than $50 million in penalties to businesses that deliberately omitted or under-reported income, such as cash payments.

ATO targets promoters of early release of super schemes


The ATO and the Australian Health Practitioner Regulation Agency are concerned that some health practitioners and third-party facilitators are using predatory practices to get individuals to inappropriately access their super.


Red flags include practitioners or third parties advertising early access to super for cosmetic or dental procedures on social media, or asking for myGov sign-in details so they can ‘apply for you’.


Other common red flags include:


  • practitioners conducting telehealth appointments, rather than in-person examinations for ‘compassionate release of super’;
  • recommending more expensive treatments when cheaper options may be available;
  • encouraging the use of super to pay for treatment, rather than other payment options, such as a payment plan;
  • requiring the use of a specific provider to prepare the second ‘compassionate release of super’ medical report, or a specific third party to submit the application;
  • requiring upfront payment for treatments and withholding information about the ongoing costs of the treatment; and
  • charging fees to assist with preparing or submitting a ‘compassionate release of super’ application without being a tax agent.


Please contact our office if you have any concerns regarding early access to super.

Work cars: Are employers overlooking private use?


The ATO is calling on employers to check how their employees use work cars, as FBT may apply where a car is used or made available for private use by an employee or their family members or associates. Private use can include:


  • doing school pick-ups or drop-offs (even if it is on the way to or from work);
  • running personal errands;
  • garaging the car at or near the employee's home (even for security reasons); and
  • taking the car on weekend recreational trips.

ATO highlights common rental property deduction errors


The ATO has recently published the three most common rental property deduction errors it sees.


Not apportioning interest expenses correctly


Broadly, rental property owners can only claim deductions for interest they pay on a loan used to:


  • buy the rental property;
  • buy a depreciating asset for the property (ie. an air conditioner);
  • pay for deductible expenses (ie. repairs) that arise from renting out the property; or
  • finance renovations and extensions to the rental property.


Interest on any part of the loan used for private purposes is not deductible. 


Where the loan is refinanced or redrawn to pay private expenses, such as school fees or a holiday, a deduction cannot be claimed for the interest on that portion.


Incorrect claims of repairs vs capital works


The ATO continues to see errors in claims for repairs, maintenance and capital works expenses. 

Generally speaking:


  • repairs, such as fixing wear and tear, or damage to a property that occurred while renting it out, can be claimed as a deduction in the year they occur;
  • improvements, such as renovating or replacing an entire structure, are capital expenses which can be claimed over time (generally 40 years); and
  • adding or replacing something that’s not part of the structure (ie. a new appliance) is a depreciating asset and the cost is generally claimed over the asset's effective life.


Separating private use of a property (and apportioning deductions)


The ATO is also seeing rental expenses not being apportioned for any private use. 

Generally speaking, if a rental property owner:


  • only uses part of the property to earn rent (ie. renting out a room in their home) — they must apportion the expenses based on the area of the property rented;
  • rents out the entire property, but for only part of the year — they must apportion the expenses based on the number of days it was rented or held to produce rental income; or
  • charges below market rates of rent, and the expenses incurred are more than the amount of rent received — the ATO expects them to apportion the expenses by limiting them to the amount of rent derived from the property (so there is no net rental income or loss).


Where the rental property owner uses the property as a holiday home, they cannot claim ownership and use expenses, such as interest, rates and repairs, unless they 'used or held it for use mainly for producing rental income'.

ATO sends reminder to plan for Payday Super obligation over holiday period


The ATO is encouraging businesses to plan ahead for payroll and super payments during the upcoming holiday period.


If a ‘payday’ occurs while key payroll staff are on leave, businesses should ensure someone else is available to process payroll and manage super obligations. Super contributions must still reach an employees’ superannuation fund within 7 business days of payday.


We recommend you check processing timeframes with your business’s payroll software provider or clearing house and consider any available scheduling options before key payroll staff begin their leave for the holidays.


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

Liability limited by a scheme approved under Professional Standards Legislation


Practice Update – October 2026

October 7, 2026
ATO to stop accepting credit cards as payment method after 30 November 2026 The Australian Tax Office ( ATO ) has announced it will stop accepting credit cards as a payment method after 30 November 2026. The move follows after the Reserve Bank of Australia’s ( RBA ) Review of Merchant Card Payment Costs and Surcharging, where the RBA concluded that “it is in the public interest” to scrap surcharging for all designated card networks from 1 October 2026 (including EFTPOS, Mastercard, and Visa). It said that as a government agency, the ATO has decided it would not be appropriate for the cost of credit card merchant fees to be transferred to the community. The ATO recognises that some taxpayers currently rely on credit card payments to manage their tax payments and understands this change may require some adjustments. The ATO is writing directly to those who currently have a payment plan linked to a credit card to explain the changes and outlining the steps they need to take. There are alternative payment options available for taxpayers, including direct deposit, direct debit from a debit card, direct debit from an Australian cheque or savings account, Government EasyPay, in person at Australia Post, by mail, or international money remitter. The ATO said it is committed to helping taxpayers transition to alternative payment methods and will continue to support those experiencing financial hardship or other circumstances that make it difficult to meet their obligations. Alternative payment options for taxpayers are outlined at www.ato.gov.au/howtopay Taxpayers who need extra support are encouraged to visit www.ato.gov.au/supporttolodgeandpay , contact the ATO on 13 11 42 during business hours or speak with their registered tax professional.

Tax Alert - Draft legislation offers alternative to restructuring and avoid the 30% minimum trust tax

September 4, 2026
Yesterday, Treasurer Jim Chalmers released draft legislation to implement the key components of the 30% minimum trust tax on discretionary trusts announced in the Federal Budget during May 2026.

Practice Update – September 2026

September 2, 2026
Discretionary trusts and the proposed 30% minimum tax Discretionary trusts, often referred to as family trusts, have been a popular structure for Australian families and businesses for many decades. They are commonly used to operate family businesses, hold investments and assist with succession planning. Their flexibility, together with asset protection and estate planning benefits, has made them an attractive option for many groups. In the 2026–27 Federal Budget, the Government announced a significant proposed change. From 1 July 2028 , trustees of discretionary trusts would generally be required to pay a minimum tax of 30% on the trust's taxable income . According to the Government, the proposal is intended to better align the tax paid on trust income with that paid by salary and wage earners, while reducing opportunities to split income between family members. However, the announcement has generated considerable debate. Professional bodies, business groups and tax advisers have expressed concerns that the changes could increase complexity and compliance costs for many genuine family businesses and investment structures. How the proposal is expected to work Under the proposal, the trustee would generally pay the minimum 30% tax on the trust's taxable income. Where trust income is distributed to individual beneficiaries or certain other non-corporate beneficiaries , those beneficiaries would generally receive a non-refundable tax offset recognising the tax already paid by the trustee. This is intended to reduce the risk of the same income being taxed twice, but while maintaining the impact of the 30% minimum tax rate. Importantly, the minimum tax would not apply to every trust . The Government has indicated that a number of trusts would be excluded, including fixed trusts, widely held trusts, complying superannuation funds, charitable trusts, deceased estates, special disability trusts and genuine testamentary trusts. Primary production income and certain income relating to vulnerable minors would also be excluded. The Government has also stated that more than 90% of small businesses are not expected to be affected. While that may be reassuring for some taxpayers, there are still some important issues that could affect family groups using discretionary trusts. What could this mean in practice? One area likely to receive close attention is the use of companies as beneficiaries of family trusts. Many family groups have historically distributed some trust income to a company. This can provide flexibility in managing cash flow, retaining profits within the business and funding future growth. Under the proposed rules, however, the corporate beneficiary would not receive a tax offset for the tax already paid by the trustee . In many cases this will mean that income distributed from a discretionary trust to a company would be subject to double taxation. Another practical impact of the proposed change is that some family groups may find it more difficult to fully utilise existing tax losses. While the impact will depend on each group's circumstances, the proposed minimum tax is likely to reduce some of the flexibility that currently exists when managing taxable income across a family structure within many groups. The Government has also proposed a temporary three-year rollover period, commencing from 1 July 2027, to help restructure into alternative business structures , such as companies or fixed trusts, without triggering immediate income tax or capital gains tax consequences. While this may assist some groups, restructuring is rarely straightforward. Depending on the circumstances, it might be necessary to consider things like stamp duty, loan approvals, financing arrangements, contract changes, licensing requirements and professional advice. Even relatively simple restructures can involve significant time and cost, so careful planning will be important. The rules are not yet final At this stage, the proposal remains subject to consultation . Treasury released a consultation paper in July 2026 seeking feedback on a range of design issues, including how the new rules would operate in different situations. Final legislation has not yet been introduced , meaning aspects of the proposal could still change before the rules become law. For this reason, most groups utilising discretionary trust structures should avoid making major structural decisions based solely on the announcement. Instead, it is sensible to monitor developments while considering whether existing structures are likely to remain appropriate if the proposal proceeds. What should you do now? For many families, discretionary trusts are about much more than tax. They can continue to provide valuable asset protection, succession planning and business flexibility. The proposed changes do not remove those benefits, nor do they prevent discretionary trusts from continuing to be used. However, the proposal does have the potential to change the tax outcomes for some family groups, particularly those with more complex structures or those that regularly distribute income to companies. With the proposed start date still some time away, there is an opportunity to pause and carefully understand how the changes may affect your circumstances and consider whether any planning or restructuring might be appropriate. As the legislation develops, we can help you assess the impact on your business or investment structure and determine whether any action is warranted.
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