The Australian Taxation Office (ATO) has kicked off 2025 by announcing its key focus areas for small businesses. In this Tax Alert March 2025, the ATO has also signalled a tougher stance on super guarantee (SG) compliance and GST fraud. Here’s a roundup of the latest tax news.

The regulator has announced its key small business tax issues for this financial year. The three main areas the ATO is focusing on are:

• Deductions and concessions, including non-commercial losses and small business CGT concessions.
• Incorrect use of business income, such as using business money and assets for personal benefit.
• Businesses operating outside the system, particularly GST registration and undeclared income in taxi, limousine, and ride-sourcing services.

The ATO plans to review and publish quarterly focus themes to help small businesses identify and address issues in these areas.

GST fraud warning

The ATO-led Serious Financial Crime Taskforce is warning businesses against attempting to cheat the tax and super system through GST fraud, stating that it is actively monitoring for potentially fraudulent activities. ⁱ

New information shared between government agencies reveals that some businesses are using complex financial arrangements to disguise transactions to obtain larger GST refunds.

These arrangements include:

• False invoicing between related entities.
• Deliberately misaligning GST accounting methods across a group.
• Duplicating GST credit claims.
• Claiming GST credits for fake purchases.

Tax penalties increase

The cost of penalty units imposed by the ATO for failing to meet tax obligations has increased again, rising from $313 to $330 per unit. ⁱⁱ

The new rate applies to infringements occurring on or after 7 November 2024. For example, the penalty for failing to keep or retain tax records as required is 20 penalty units (20 × $330 = $6,600).

Other penalties apply to:

• Missed or late super guarantee (SG) payments.
• Individual and corporate SMSF trustees.
• GST obligations when buying or selling new residential properties.

GST and fuel tax credit time limits

The ATO is encouraging businesses eligible for GST and fuel tax credits to claim their credits within four years of the due date of the earliest Business Activity Statement (BAS) where a claim could have been made.

Once the time limit passes, you are no longer eligible to claim the credits. Lodging an amendment to an original assessment or requesting a private ruling does not count as making a claim.

Old credits can still be claimed in your next BAS (provided it is within the eligibility period) by:

• Lodging a revised BAS for the original period via ATO Online Services, or
• Lodging a valid objection within the time limit to preserve your entitlement to the credits.

Change to myGovID

The Australian Government’s digital ID app, myGovID, which is used to access government services, has been renamed myID.

The app provides secure access to government services using your existing login details (including your email address), with the identity strength remaining unchanged. Existing app users should find the app automatically updated on their smart device, or it can be manually updated via the Apple App Store or Google Play.

The ATO is warning users that scammers are attempting to take advantage of the name change. Any message or email asking you to set up a new myID or reconfirm your details is a scam.

By taking proactive measures, staying informed, and seeking professional financial advice, you can navigate the evolving landscape of personal and business tax compliance with confidence. Our financial advisers can work with you to understand your tax situation and safeguard your financial wellbeing.

Sources

i Taskforce issues GST fraud warning to dishonest businesses | Australian Taxation Office

ii Penalty units | Australian Taxation Office

iii Our SG compliance results are here | Australian Taxation Office

More than half of us set a new financial goal at the beginning of 2025, according to ASIC’s MoneySmart website. While most financial goals focus on saving money and paying down debt, the months leading up to 30 June present an opportunity to review your super balance and explore ways to boost your retirement savings.

What you need to consider

If you have more than one super account, consider consolidating them into a single account. Doing so could save you from paying multiple fees and make it easier to keep track of your super.

When transferring your super into one account, do your research and compare options—your current fund may not be the best choice. ⁱ

Boosting your retirement savings

Making additional contributions on top of the super guarantee paid by your employer can significantly boost your retirement savings, thanks to the power of compounding interest.

Ways to boost your super before 30 June

Concessional Contributions (before tax)

These contributions can be made from your pre-tax salary via a salary-sacrifice arrangement through your employer or by using after-tax money and depositing funds directly into your super account.

In addition to increasing your super balance, concessional contributions may also reduce your tax liability, depending on your marginal tax rate. ⁱⁱ

Check your year-to-date contributions to ensure any additional contributions do not exceed the concessional (before-tax) contributions cap, which is $30,000 from 1 July 2024. ⁱⁱⁱ

Non-Concessional Contributions (after tax)

Also known as personal contributions, these are made from after-tax income. It is important to stay within the non-concessional contributions cap, which is set at $120,000 from 1 July 2024. ^iv

If you exceed the concessional contributions cap of $30,000 per annum, any additional contributions will be taxed at your marginal tax rate, with a 15 per cent offset to account for the contributions tax already paid by your super fund.

Exceeding the non-concessional contributions cap will result in a tax rate of 47 per cent on the excess contributions. ^v

Carry forward (catch-up) concessional contributions

If you have had a break from work or have not reached the maximum concessional contributions cap in the past five years, you may be able to use catch-up contributions to boost your super—especially if you have received a lump sum, such as a work bonus.

These contributions utilise unused concessional caps from the previous five financial years and are available only to those with super balances below $500,000.

Strict rules apply to this type of contribution, making it essential to seek advice from one of our expert financial advisers before making a catch-up contribution.

Meanwhile, the fate of the proposed Division 296 tax, which would apply to super balances over $3 million, remains uncertain. It has yet to be debated and voted on in the Senate.

Downsizer Contributions

If you are over 55 years old, have owned your home for at least 10 years, and are looking to sell, you may be eligible to make a non-concessional super contribution of up to $300,000 per person—or $600,000 as a couple.

The contribution must be made to your super within 90 days of receiving the proceeds from the sale of your home.

Spouse Contributions

There are two ways you can make spouse super contributions:

• Contribution splitting: You can roll over contributions you have already made to your own super into your spouse’s super. This is known as a contributions-splitting super benefit.
• Direct contribution: You can contribute directly to your spouse’s super, which will be treated as their non-concessional contribution. If your spouse earns less than $40,000 per annum, you may be eligible for a tax offset of up to $540 per year.

As with all super contributions, there are restrictions and eligibility requirements to consider.

Maximising your super contributions before 30 June can significantly boost your retirement savings and improve your financial future. If you or a loved one needs assistance, we’re here to help— contact your adviser or our team to start planning for a secure and rewarding retirement.

As we say goodbye to the heat of summer, we can look forward to enjoying the cooler days ahead. Along with the drop in temperature, the RBA brought much relief to mortgage holders by cutting the cash rate by 25 basis points in February. The cash rate is now sitting at 4.10 per cent following the first rate reduction since November 2020.

Inflation remained steady in February at 2.5 per cent, with core inflation at 2.8 per cent. However, the RBA remains cautious and has not guaranteed further cash rate cuts in 2025. Some economists are predicting additional cuts this year, but time will tell.

While ongoing tensions persist between Russia and Ukraine, as well as in the Middle East, and with a looming trade war due to Trump’s proposed tariffs, the global economic outlook remains unpredictable.

US markets reacted to lower-than-expected consumer spending and continued geopolitical uncertainty, resulting in another month of volatility.

It has also been a turbulent period for the Australian share market, with the ASX 200 losing ground earlier in the month, bouncing back to reach an all-time high, only to start falling again, closing at its lowest point in two months.

A similar pattern has been seen with the Australian dollar, which climbed to a high of $0.64 USD in mid-February before losing momentum and now hovering around $0.63 USD.

If there is something affecting your financial situation that you would like to discuss, please do not hesitate to reach out to our team.