Practice Update - September 2022

Lowe Lippmann Chartered Accountants

More COVID-19 business grants are now tax-free


The Federal Government has expanded the list of State and Territory COVID grant programs that may be tax-free to eligible businesses.


A State or Territory Government COVID grant payment will generally be tax-free if:

  • the payment is received under a grant program that is formally declared to be an eligible program;
  • the recipient carried on a business and had an aggregated turnover of less than $50 million in the income year the payment was received, or in the previous income year; and
  • the payment was received in the 2021 or 2022 income year.


The following Victorian and ACT COVID-19 grant programs have recently been declared as eligible grant programs for these purposes:

  • Business Cost Assistance Program Round Two – Top Up (Victoria).
  • Business Cost Assistance Program Round Three (Victoria).
  • Business Cost Assistance Program Round Four (Victoria).
  • Business Cost Assistance Program Round Four – Construction (Victoria).
  • Business Cost Assistance Program Round Five (Victoria).
  • Commercial Landlord Hardship Fund 3 (Victoria).
  • Impacted Public Event Support Program Round Two (Victoria).
  • Licensed Hospitality Venue Fund 2021 – Top Up Payments (Victoria).
  • Live Performance Support Program (Presenters) Round Two (Victoria).
  • Live Performance Support Program (Suppliers) Round Two (Victoria).
  • HOMEFRONT 3 (ACT).


We previously released a special Tax Alert on this topic, to see click here.



ATO reminder about appointing an SMSF auditor


The ATO is reminding trustees of self-managed super funds (SMSFs) that they need to appoint an approved SMSF auditor no later than 45 days before the lodgment of their fund’s SMSF annual return (for example, for the 2022 income year).


In particular, the ATO says:


“Don't risk approaching an auditor the day before you need to lodge as it will result in an overdue lodgment. Approved SMSF auditors are an important part of your lodgment and reporting obligations. They review your fund's financial statements and make sure you're complying with super law.”


Importantly, an audit is required even if no contributions or payments were made to or from the SMSF in the financial year.



Super comparison tool updated


The YourSuper comparison tool helps individuals compare MySuper products and choose a super fund that meets their needs. 


It ranks the performance of these products by fees and net returns.


Each year, the Australian Prudential Regulation Authority (APRA) assesses the performance of each MySuper product, and this information is displayed in the comparison tool. Updated information for the 2022/23 year is now available.


The comparison tool provides one of the following results for each MySuper product:

  • Performing – the product has met or exceeded the performance test benchmark.
  • Underperforming – the product has not met the performance test benchmark.
  • Not assessed – the product had less than five years of performance history and has not been rated by APRA.


Individuals who are members of underperforming MySuper products will receive correspondence to notify them of the underperforming status.


Individuals can access a personalised version of the tool which allows them to view and compare their existing MySuper products by doing the following:

  • Log in to ATO online services through myGov.
  • Go to the 'Super' drop-down menu and select ‘Information’, then select ‘YourSuper comparison’.


To access a non-personalised version of the tool (without logging into myGov), visit:

www.ato.gov.au/yoursuper


Small business tax incentives back on the table


The Labor Government has confirmed its commitment to implementing two tax incentives aimed at supporting small businesses to train and upskill employees, and improve their digital and tech capacity.


The Technology Investment Boost and the Skills and Training Boost were announced in the 29 March 2022 Federal Budget but remain unlegislated. 


Small businesses with an annual turnover of less than $50 million will be able to claim a ‘bonus’ 20% deduction for eligible expenditure on:

  • external training of employees until 30 June 2024; and
  • the uptake of digital technologies until 30 June 2023.



The incentives will be backdated to 29 March 2022.


We note that these incentives are not yet law. 



Rental properties and second-hand depreciating assets


The ATO is reminding taxpayers that have a residential rental property, to take care when making claims for ‘second-hand depreciating assets’ used in their properties.


In most cases, these are items that existed in the taxpayer's property when they purchased it, or were in their private residence (which they later rented out), such as:

  • flooring and window coverings;
  • air conditioners, washing machines, alarm systems, spas, pool pumps; and
  • items used for both the rental property and the taxpayer’s own home.


Since 1 July 2017, taxpayers generally cannot claim the decline in value of second-hand depreciating assets (some limited exceptions do apply). 


However, this rule does not apply to a property that was rented out before this date, or if it is newly built or substantially renovated (conditions apply).


If you have a residential rental property, to help us get your claim right, please answer the following:

  • When did you purchase the property?
  • Was it a new or existing build?
  • Did you live in the property before renting it out?
  • When did you start renting the property?
  • Was the asset already in the rental property when you bought it?
  • Is the property used for business purposes?


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




Audit Lowe Down – Costs incurred in acquiring / forming a business

September 9, 2025
Costs incurred in acquiring / forming a business. Further to the recent blog about capitalisation of costs when acquiring an asset, we have received a number of questions in relation to costs incurred in setting up / purchasing a business. Formation costs on establishing a business: These costs would include: Incorporation fees ASIC registration fees Legal fees Business name registration Pre-operating costs Pre-opening costs. The relevant standard for these costs is AASB 138 Intangible Assets and paragraph 69a confirms that these start-up costs are expensed when incurred. There is no identifiable asset controlled by the entity when the costs are incurred as the entity does not exist. Business acquisition costs These costs would include: Legal and accounting fees Due diligence and valuation costs Stamp duty Advisory or brokerage fees Project management costs related to the acquisition Internal costs allocated to the transaction In contrast to the asset acquisition discussed previously, AASB 3 Business Combinations requires all acquisition costs to be expensed as incurred. This means that they are not included as part of the consideration paid and therefore do not affect calculated goodwill.  Entities purchasing businesses should be aware that these costs are not able to be capitalised as they can often be substantial, and purchasers often do not expect the costs to be taken directly to the income statement

Practice Update – September 2025

September 8, 2025
ATO to include tax 'debts on hold' in taxpayer account balances From August 2025, the Australian Taxation Office ( ATO ) is progressively including 'debts on hold' in relevant taxpayer ATO account balances. A 'debt on hold' is an outstanding tax debt where the ATO has previously paused debt collection actions. Tax debts will generally be placed on hold where the ATO decides it is not cost effective to collect the debt at the time. The ATO is currently required by law to offset such 'debts on hold' against any refunds or credits the taxpayer is entitled to. The difficulty with these debts is that the ATO has not traditionally recorded them on taxpayer's ATO account balances. Taxpayers with 'debts on hold' of $100 or more will receive (or their tax agent will receive) a letter before it is added to their ATO account balance (which can be viewed in the ATO's online services or the statement of account). Taxpayers with a 'debt on hold' of less than $100 will not receive a letter, but the debt will be included in their ATO account balance. The ATO has advised it will remit the general interest charge ( GIC ) that is applied to 'debts on hold' for periods where they have not been included in account balances. This means that taxpayers have not been charged GIC for this period. The ATO will stop remitting GIC six months from the day the taxpayer's 'debt on hold' is included in their account balance. After this, GIC will start to apply.

Audit Lowe Down – How do we account for the costs incurred when acquiring an asset?

August 26, 2025
How do we account for the costs incurred when acquiring an asset? When we acquire an asset such as property, plant and equipment, intangibles or inventory there are often significant other costs incurred as part of the purchase process, including delivery, stamp duty, installation fees. Whether we capitalise these to the value of the asset or expense them as incurred can make a significant difference to an entity’s reported position or performance. Since we have accounting standards for specific assets, the treatment can vary depending on the asset and the relevant standard. A summary of some common expenses and their treatment under four accounting standards has been included below. The four standards considered are: AASB 102 Inventories AASB 116 Property, Plant and Equipment AASB 138 Intangible Assets AASB 140 Investment Property.
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