Juggernaut Advisory

SMSF Borrowing Rules: What the New Changes Mean for Trustees

Team Juggernaut — Thu, 13 Aug 2026 03:20:55 +0000

SMSF borrowing rules have changed, affecting how trustees can use limited recourse borrowing arrangements to purchase property.

To ensure passage of the negative gearing and CGT discount changes that were announced in the May 2026 Federal Budget, the Government agreed to make amendments to the SMSF borrowing rules.

SMSFs are able to borrow in restricted circumstances, which include borrowing under a limited recourse borrowing arrangement (LRBA) to purchase a single acquirable asset. While there have previously been no specific legislative restrictions on the type of asset an SMSF can borrow to purchase, most commonly we see LRBAs being used to purchase property. Up until this point, this could have been any type of real property.

These amendments will mean that when SMSF trustees wish to borrow to purchase a property, it must meet the business real property (BRP) definition. This BRP definition relates to usage of the property rather than zoning or what the property was originally built for.

This change became law on 26 June 2026, but the Bill includes a 45-day transitional period which will finish on 10 August 2026. This transitional period may allow for arrangements that are currently being implemented on non-BRP assets to be allowable under the new rules where settlement occurs after 10 August 2026, provided the arrangement to purchase the property was entered into on or before 10 August 2026. We recommend that SMSF trustees who are currently implementing LRBA arrangements on non-BRP assets seek specialist SMSF legal advice to ensure their arrangements meet these transitional rules.

While this change has been referred to in the media as a ban on super funds borrowing to purchase residential property, the use of the BRP definition makes the change slightly more complex than this. As this definition relates to usage of the property, it is possible that some residentially designed properties could meet the BRP definition (for example, a medical practice that operates from a residentially designed terrace dwelling).

The BRP definition also requires that the property is wholly and exclusively used for business purposes. This could mean that some properties that may initially appear to be commercial in nature may not meet the BRP definition (for example, a mixed-use residential and retail property on a single title).

We recommend that SMSF trustees entering into new LRBAs seek advice from specialist legal and financial advisers to ensure the new requirements are met.

Existing arrangements

The updated rules allow for existing LRBAs over non-BRP assets to continue. They also allow for existing arrangements to be refinanced, subject to lender availability and approval.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Car Thresholds 2026–27: What Businesses Need to Know

Team Juggernaut — Wed, 05 Aug 2026 23:05:00 +0000

Understanding car thresholds is important if you’re purchasing or leasing a vehicle for your business in the new financial year.

If you’re thinking about purchasing or leasing a vehicle for your business in the new financial year, it’s worth understanding the updated car thresholds that apply from 1 July 2026. While these limits may seem technical, they can have a practical impact on the amount you can claim for tax depreciation deductions, the GST credits that are available, and whether luxury car tax (LCT) could apply.

Knowing how these rules work before signing a contract can help you make a more informed decision and potentially improve your overall tax and cash flow position.

The car limit – understanding the depreciation cap

For vehicles first used or leased in the 2026–27 income year, the car limit is $69,883.

This limit generally represents the maximum value that can be used when calculating tax depreciation deductions for a passenger vehicle, regardless of how much was actually paid for the car.

From a commercial perspective, this is an important consideration if you’re looking at a higher-value vehicle. While purchasing a more expensive car may still make sense for operational or business reasons, the portion of the purchase price above the car limit will generally not attract depreciation deductions.

If the vehicle is used for both business and private purposes – which is common for many business owners – you would typically only be able to claim deductions for the business-use portion. Maintaining appropriate records, such as a valid logbook and odometer readings, remains an important part of supporting those claims should the ATO undertake a review or audit.

Rather than focusing solely on the purchase price, it is often worthwhile considering the overall after-tax cost of the vehicle. In many cases, a vehicle priced around the car limit may provide similar practical benefits while maximising the available tax deductions.

It’s also worth confirming which depreciation rules apply to your circumstances, including whether any simplified depreciation concessions are available so that deductions can be claimed at a faster rate.

GST credits – also subject to a cap

Businesses that are registered for GST may also be entitled to claim GST credits when purchasing a business vehicle. However, where the purchase price exceeds the car limit, the GST credit is also capped.

For the 2026–27 financial year, the maximum GST credit available is $6,353 (being one-eleventh of the $69,883 car limit) for passenger vehicles.

Even if the vehicle costs considerably more, the GST credit will generally not increase beyond this amount. However, when the vehicle is sold, you will normally need to pay GST on the full sale price.

For many businesses, GST credits can provide an important short-term cash flow benefit, so it is important to ensure they are claimed correctly and within the relevant time limits through your Business Activity Statement (BAS).

Luxury Car Tax thresholds increase

The Luxury Car Tax (LCT) thresholds have also increased from 1 July 2026 and are now:

$91,661 for fuel-efficient vehicles.
$80,809 for all other vehicles.

Where applicable, LCT is generally imposed at 33% of the value above the relevant threshold, increasing the overall purchase cost of eligible vehicles.

If you’re considering a premium vehicle, these thresholds may become an important part of the purchasing decision. In particular, many fuel-efficient vehicles, including a range of hybrid and electric models, benefit from the higher threshold. Depending on the vehicle selected, this could potentially reduce the amount of LCT payable while also delivering lower running costs over the life of the vehicle.

Planning ahead can pay off

These updated thresholds apply to vehicles first used or leased from 1 July 2026, making now an ideal time to review any planned vehicle purchases.

Before making a decision, it may be worthwhile considering:

The total after-tax cost of ownership, including depreciation deductions, GST credits and any LCT;
Whether purchasing or leasing is likely to be more suitable for your circumstances;
The expected business use of the vehicle and the records you’ll need to maintain; and
How the purchase fits within your broader cash flow and business plans.

Whether you’re replacing a work vehicle, expanding your fleet or purchasing a new car for client-facing activities, taking these factors into account can help ensure the vehicle meets both your operational requirements and your tax objectives.

Key takeaways

A business vehicle is often a significant investment, and while tax considerations shouldn’t drive the decision, they can influence the overall cost of ownership.

Before committing to a purchase, it’s worth speaking with your accountant to model the likely tax outcomes based on your individual circumstances. A little planning upfront may help you maximise available tax concessions, avoid unexpected costs and ensure the purchase aligns with your broader business strategy.

For more information, refer to the ATO’s Small Business Newsroom: Car thresholds from 1 July | Australian Taxation Office, or contact our team to discuss how these changes may apply to your business.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Sharing Economy Income: What to Know at Tax Time

Team Juggernaut — Wed, 05 Aug 2026 02:44:47 +0000

Sharing economy income has created new opportunities for Australians to earn additional income, but it can also create unexpected tax obligations.

The sharing economy has created new opportunities for Australians to earn additional income. Whether it’s driving for a ride-sharing service, renting out a holiday property, completing freelance work, hiring out equipment, or creating digital content, many people are supplementing their regular income through online platforms.

However, one aspect that can sometimes come as a surprise at tax time is that this income generally needs to be declared in your tax return. Unlike salary and wages, sharing economy income isn’t always fully pre-filled in your tax return, so it’s important to maintain your own records and check that your tax return is completely accurate.

The ATO continues to focus on income earned through the sharing economy and has expanded its data-matching capabilities in recent years. As a result, it is becoming increasingly likely that income reported by online platforms will be compared against returns that are lodged by taxpayers.

What counts as sharing economy income?

Sharing economy income can arise from a wide range of activities, including:

Ride-sourcing services such as Uber or DiDi
Short-term accommodation through platforms like Airbnb or Stayz
Hiring out assets such as vehicles, caravans, tools, parking spaces or storage areas
Freelance or task-based work, including deliveries, cleaning, handyman services or graphic design
Creating digital content, streaming, selling digital products or receiving tips through online platforms.

Even if these activities are only occasional or generate relatively modest amounts of income, they may still have tax consequences. In many cases, the income will be assessable for tax purposes, regardless of whether the activity is carried on as a business, as a contractor, or simply as a way of earning extra money.

Increased reporting to the ATO

Under the Sharing Economy Reporting Regime (SERR), many electronic platform operators are required to provide transaction information directly to the ATO. This regime applies across a growing range of sharing economy activities, including ride-sharing, short-term accommodation and certain personal services.

This information may be used by the ATO to compare against the income reported in tax returns. Where discrepancies arise, the ATO may contact taxpayers to seek clarification and, in some cases, adjustments, interest or penalties could apply.

Practical tips to help stay on top of your tax

If you earn income through the sharing economy, a few simple habits can make tax time much easier.

Keep good records

While many platforms provide annual income summaries, it is generally worthwhile maintaining your own records as well. Keeping receipts and tracking expenses such as platform fees, vehicle costs, repairs, cleaning expenses, or equipment purchases can help support any deductions you may be entitled to claim.

Understand what expenses may be deductible

You may be able to claim deductions for expenses that are directly related to earning your sharing economy income. This will always depend on your particular circumstances and the nature of the expenses you are incurring, so it’s worth discussing your situation with us to ensure claims are appropriate and adequately supported.

Plan ahead for your tax bill

Unlike employment income, tax is often not withheld from sharing economy earnings. This can result in an unexpected tax liability when you lodge your return.

Depending on your circumstances, it may be worthwhile considering strategies such as making voluntary tax payments during the year, setting aside part of your earnings in a separate account, or, where appropriate, entering the PAYG instalment system.

Don’t overlook other obligations

In some situations, GST registration may be required if your activities reach the relevant turnover thresholds. If you are involved in ride-sourcing activities, then you will normally need to register for GST regardless of the income you generate.

Depending on the nature of your income, there may also be opportunities to make additional superannuation contributions, which could provide longer-term financial benefits.

Looking beyond tax time

Treating your sharing economy activities in a business-like manner can provide benefits beyond simply meeting your tax obligations. Good record-keeping and proactive tax planning may help you better understand the profitability of your activities, improve cash flow management and make it easier to access finance if the activity continues to grow.

If you’ve earned income through an online platform during the year, now is a good time to review your records and ensure you’re well prepared before lodging your tax return. A conversation with your accountant may help identify deductions you are entitled to claim, confirm that your reporting is accurate and avoid unnecessary surprises at tax time.

The sharing economy can provide valuable opportunities to earn additional income. With some forward planning and good record-keeping, managing the tax implications should become a straightforward part of making the most of those opportunities.

For more information, visit the ATO’s guidance on sharing economy income and tax or speak with us about your individual circumstances.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Bendel Decision Division 7A: What the High Court Ruling Means for Trust Distributions

Team Juggernaut — Tue, 04 Aug 2026 02:38:16 +0000

Bendel decision Division 7A changes provide greater clarity for private business groups using discretionary trusts and corporate beneficiaries, particularly in relation to unpaid trust distributions.

The High Court has recently handed down an important decision that will impact many private business groups using discretionary trusts and corporate beneficiaries.

In Commissioner of Taxation v Bendel [2026] HCA 18 (10 June 2026), the Court rejected the ATO’s long-standing view that an unpaid distribution (also known as an unpaid present entitlement or UPE) owed by a trust to a corporate beneficiary will automatically constitute a loan for the purpose of the integrity rules in Division 7A.

The rules in Division 7A are aimed at situations where private companies provide benefits to shareholders or their associates in the form of payments, loans or forgiven debts. When these rules are triggered, the tax rules apply as if the company had paid an unfranked dividend to the recipient of the benefit.

Why this matters

Many private business groups use discretionary trusts as part of their structure. It is common for a trust to distribute at least some income to a corporate beneficiary so that this income can be taxed at the corporate tax rate (currently 25% or 30%), while the cash remains within the trust to fund working capital, future investment or business growth.

Until now, the ATO’s view was that these unpaid distributions would typically be treated as loans under Division 7A. This often meant businesses needed to put complying loan agreements in place, charge benchmark rates of interest and make annual repayments to avoid the risk of deemed unfranked dividends being recognised for tax purposes. For many groups, this created an additional administration burden, reduced cash flow flexibility and increased compliance costs.

The High Court has now clarified that an unpaid distribution will not necessarily amount to a Division 7A loan simply because the corporate beneficiary has not demanded payment.

While every arrangement will depend on its particular facts, the decision is likely to provide greater certainty for many business groups that have historically retained funds within their trusts.

What happens with existing loan arrangements?

The ATO has since released a Decision Impact Statement (26 June 2026), confirming that it will generally administer the law in accordance with the Court’s decision, while also highlighting that other integrity provisions may still need to be considered.

One of the key things that the ATO has clarified is that where formal written loan agreements have been put in place in response to the ATO’s previous views in this area, these can’t simply be unwound just because of the High Court decision.

That is, the trust still needs to make minimum loan repayments each year until the loan period ends or the loan is completely repaid to prevent a deemed unfranked dividend from being recognised under the tax rules.

Other tax rules still matter

Although the decision represents a significant development, it should not be viewed as removing all Division 7A or tax-related concerns.

The ATO has made it clear that other provisions within Division 7A can still apply in certain situations. For example, if a trustee appoints income to a corporate beneficiary and this is left unpaid, but the trustee subsequently lends money to a shareholder of the company (or an associate of a shareholder), then this can potentially still trigger a deemed unfranked dividend for tax purposes unless appropriate steps are taken.

Other integrity rules also need to be considered when trust distributions are left unpaid. For example, the rules in section 100A can potentially trigger adverse tax outcomes in situations where a trustee appoints income to a beneficiary, but the real benefit of the funds is enjoyed by another party.

These provisions remain highly fact-dependent, making it important to review arrangements carefully rather than assuming the Bendel decision resolves every issue.

Looking ahead

The decision provides a timely opportunity for private groups to review their trust structures, distribution resolutions and patterns, accounting records and the way unpaid entitlements have been managed over time.

However, we also need to keep an eye on the Government’s proposed trust tax reforms. The Government announced in the recent Federal Budget that it will be introducing a 30% minimum tax rate for discretionary trusts from 1 July 2028. The Government has also indicated that income distributed by discretionary trusts to corporate beneficiaries will generally be subject to double taxation because companies won’t receive a credit for the tax that is paid at the trust level on its income. This is likely to significantly reshape tax planning strategies over the coming years.

A recent consultation paper released by Treasury in connection with the proposed 30% minimum tax rate also suggests that the Government might modify the tax rules to ensure that Division 7A can apply to unpaid distributions. This isn’t law yet, so we will need to monitor developments because this could mean that tax planning strategies need to be revisited before we reach 1 July 2028.

Please let us know if you would like to discuss how the Bendel decision and proposed 30% minimum tax on discretionary trust income will impact your group.

If you have any questions in relation to any of the above, please contact us to discuss further.

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8 Business Growth Strategies to Improve Profitability and Manage Costs

Team Juggernaut — Mon, 27 Jul 2026 04:48:00 +0000

Business Growth Strategies can help businesses improve profitability, manage rising costs and build a stronger foundation for sustainable long-term success.

Running a small or medium-sized business is challenging. Investing in hiring, marketing and raising prices may drive growth… but also impact the bottom line. Making prudent investments while managing cash is extremely important.

Here are some practical strategies to help leaders achieve long-term profit growth, without putting the business at risk.

1. Stay Informed: Monitor Key Metrics

Keep an eye on gross margin, net profit margin, and other key metrics which make sense in your business. For example, a financial services firm implemented a real-time dashboard to monitor key performance indicators (KPIs), and this analysis helped make informed decisions about their pricing and cost-control strategies.

2. Price Right: Regularly Review Your Pricing Strategy

Research the market to ensure prices are competitive. Your pricing should capture the true worth of products or services in the minds of your customers. For example, a Theater owner learned to modify ticket prices based on customer demand, resulting in increased revenue per performance even in slow periods.

3. Bundle Up: Offer Product Bundles

Create bundles of products or services to encourage customers to buy more. This can increase the business’s average sale value and boost profits. For example, an e-commerce platform introduced personalised product bundles based on customer purchase history, leading to a significant increase in average order value.

4. Discount with Purpose: Offer Strategic Discounts

Use discounts strategically to move slow-moving inventory or to attract new customers. For example, a seller of furniture offered targeted discounts for high-end products during off-peak seasons, which had a long-term positive impact on the bottom line.

5. Start Smart: Streamline Your Operations

Review processes and identify inefficiencies. Find ways to automate or simplify them. This reduces costs AND frees up time for the team to focus on what matters. For example, a manufacturing business implemented an automated inventory system, saving 100 man-hours per month. In addition to reducing costs, the time saved was partly allocated to innovation, with good results.

6. Stay Sharp: Negotiate with Suppliers

Regularly review supplier contracts and don’t be afraid to negotiate better terms. Consider forming partnerships or buying in bulk to get discounts that boost the bottom line. A retail chain that renegotiated supplier contracts achieved a 15% cost reduction, which directly increased profit margins.

7. Be Agile: Implement Just-in-Time Inventory

Keeping a lean inventory helps reduce storage costs and avoids tying up cash in excess stock. For example, a food distributor uses sales forecasts to order inventory only when needed. This has reduced warehouse costs and food waste, leading to higher profitability.

8. Work Wisely: Outsource Non-Core Activities

Consider outsourcing tasks like Accounting or IT support to specialised firms. This lowers overhead costs and gives access to expertise to help the business grow. For example, a software developer outsources some projects to an offshore team, which accelerates time-to-market and improves customer satisfaction.

Each business is different, but consider these practical strategies to improve your business’s profitability and set the stage for long-term success.

If you have any questions in relation to any of the above, please contact us to discuss further.

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2026–27 SMSF Checklist: Practical Steps SMSF Trustees Must Take Now

Team Juggernaut — Mon, 06 Jul 2026 03:50:06 +0000

SMSF Trustees should review contribution strategies, pension arrangements, compliance obligations and upcoming legislative changes to ensure their fund remains compliant and well positioned for the 2026–27 financial year.

With the start of the 2026–27 financial year, SMSF trustees should take a proactive approach to ensure funds remain compliant and well positioned. Below is a concise checklist of the key legislative changes, compliance deadlines and practical steps trustees should prioritise.

1. Review Transfer Balance Cap and Pension Planning

Indexation of the general TBC: From 1 July 2026 the general transfer balance cap (TBC) increases from $2.0 million to $2.1 million. Members should check whether their personal transfer balance cap is eligible for indexation, particularly if they started a pension before the latest indexation dates.

The ATO will calculate a member’s entitlement to indexation of their personal TBC, however, this will be based on reported transfer balance account (TBA) events (eg, commencement or commutation of a pension). It’s important that all TBA events up to 30 June 2026 have been reported to the ATO to ensure an accurate calculation of TBC indexation entitlement.
Legacy pensions: The five-year legacy pension exit measure (7 Dec 2024 – 6 Dec 2029) remains available. Where clients hold legacy lifetime, life expectancy or market-linked pensions, confirm deed powers and consider the interaction with Division 296 and commutation rules before acting.

2. Update Contribution Strategies and Caps

Higher caps for 2026–27: The concessional contributions cap rises to $32,500 and the standard non-concessional cap becomes $130,000. However, the non-concessional cap is subject the member’s 30 June 2026 total superannuation balance (TSB) being less than $2.1 million. Review your planned contributions to avoid cap breaches.
Bring-forward and TSB thresholds: Check each member’s TSB at 30 June 2026 prior to applying bring-forward rules in 2026-27. Thresholds and allowable bring-forward periods changed for 2026–27.

The increase to the standard non-concessional cap means the maximum bring forward cap has increased from $360,000 to $390,000. However, if the bring-forward rule was triggered in 2024-25 or 2025-26, the member does not get the benefit of the increase.

3. Pension Minimums, TRIS and ECPI Risks

Minimum pension percentages: Check minimum pension percentages for age groups and ensure pensions meet the standards to avoid breaches and potential loss of fund tax exempt income.

For a transition to retirement (TTR) pension, in addition to making at least the minimum pension payment, make sure you don’t exceed the 10% maximum. Also, if turning 65 in 2026-27, a TTR pension automatically moves into retirement phase and has TBC consequences. Speak to your adviser about implications and options well before your 65th birthday.
Commutations and starting pensions: Follow correct commencement and commutation procedures; incorrect handling can trigger multiple events and adverse tax outcomes. Report all TBA events to the ATO by the due date.

4. Review Related Party Loans and Update Interest Rate

The ATO document PCG 2016/5 sets out many of the terms and conditions a related party loan should have, including the interest rate. These are commonly referred to as the ‘safe harbour provisions’.
Each year, the interest rate of the loan should be reviewed and updated in line with the relevant rate determined in May immediately before the commence of the financial year. The rate for the 2025-26 year was 8.95% for property and 10.95% for listed securities.

As a result of increases in the RBA’s cash rate over the last 12 months there has been an increase to the safe harbour interest rates to 9.35% and 11.35% for property and listed securities respectively. The repayments of any related party loans that are complying with the safe harbour provisions will need to be adjusted to reflect these new rates.

5. Check Compliance for Payroll and Contributions (SuperStream 3.0 / Payday Super)

NPP readiness: From 1 July 2026 funds and employers must be capable of receiving contributions via the New Payments Platform (NPP). Ensure the SMSF bank account can accept Osko/PayID and other NPP payments.
Member Verification Requests (MVRs): Employers will use MVRs to confirm whether a fund can accept a contribution. SMSFs receiving employer contributions should be prepared to respond to MVRs promptly (within required timeframes). Generally, SuperStream messages will be received in the SMSF administration platform that is used by the SMSF’s accountant or administrator. Members should inform their SMSF accountant or administrator if their employer will be sending a message via the MVR to confirm whether their SMSF can accept the contribution.
Closely held employees: If your SMSF has related employees, confirm whether SuperStream exemptions apply and ensure payroll systems are updated as late lodgements may result in penalties. Remember the ATO can remove fund details from the SMSF lookup database if tax returns are overdue. This could impact on a fund’s ability to receive employer contributions.

6. Consider the Division 296 Transitional Rules and Tax Traps

2026–27 transitional year treatment: The 2026–27 year has specific transitional rules for Division 296 where the relevant TSB is measured at 30 June 2027. Trustees should assess whether electing to set a Div 296 cost base to 30 June 2026 market values is appropriate. This election does not need to be made until the lodgement of the 2027 SMSF Annual Return (tax return), and if made, applies to all assets and has consequences for capital losses and later adjustments. Seek tailored advice before electing.

7. Practical Housekeeping

Deed powers and trustee structure: For SMSFs with individual trustees, consider whether a corporate trustee is a potentially better option. Talk to you adviser about these potential benefits and the process to change. Ensure that any changes to the trustee structure is reported to the relevant authority within the required timeframe (eg, the ATO, ASIC).
Document everything: Keep clear records of trustee decisions, valuations used for elections, contribution timing evidence and communications with employers — documentation is key for the annual audit and if the ATO queries an event.

Preparing now will reduce 2026-27 year-end stress and help avoid costly compliance issues. Speak to us if you have any questions or wish to discuss any of the issues raised above.

If you have any questions in relation to any of the above, please contact us to discuss further.

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Tax Ombudsman Complaints Surge 127%: What It Means for You

Team Juggernaut — Sun, 05 Jul 2026 02:30:54 +0000

Tax Ombudsman Complaints have surged by 127%, highlighting growing concerns about ATO debt collection, penalties, interest charges and payment arrangements for businesses and individuals.

The Tax Ombudsman has reported a dramatic 127% increase in complaints about the ATO this financial year (to 30 April 2026), with nearly 3,000 complaints received in the first ten months. Debt collection, penalties, and tax debt interest charges have dominated the issues raised.

Tax Ombudsman Ruth Owen has linked the sharp rise directly to the ATO’s intensified focus on recovering outstanding debts amid tighter economic conditions. Many SME owners and individuals are feeling the pressure from cash flow challenges, rising costs, and stricter ATO enforcement.

Why Complaints are Rising

Debt collection accounted for around 23% of complaints, followed by payment-related issues (16%) and penalties plus interest (15%). Common concerns include:

Refund offsets against debts
Director Penalty Notices
Challenges in setting up or maintaining payment plans
The rapid accumulation of General Interest Charge (GIC) on overdue amounts

This surge reflects real-world pressures: businesses navigating post-pandemic recovery, higher interest rates, and increased ATO activity to close the tax gap. For many clients, these issues create significant stress and can distract from core operations.

Practical wins: Relief is Possible

The good news? The Ombudsman’s office is proving effective as an independent escalation point. Around 31% of complaints relating to penalties and interest resulted in some form of debt reduction or remission.

This highlights that persistence and proper representation can sometimes deliver favourable outcomes when initial ATO decisions feel overly harsh or inconsistent.

Important Developments on GIC Remission

A key theme in the complaints data is the GIC – the daily interest applied to unpaid tax debts. In March 2026, the Tax Ombudsman released a major review titled In the Interest of Fairness, which examined the ATO’s handling of GIC remission requests.

The review identified inconsistent decision-making, unclear guidance, and communication gaps that left many taxpayers confused about their options. It made several recommendations, including clearer upfront interest-free payment plans for compliant taxpayers.

The ATO’s response has been positive. It accepted all recommendations and has already begun implementing improvements, such as:

Enhanced website guidance with practical examples
New, more user-friendly remission application forms
A $2,500 cap on phone approvals with a dedicated review team for larger requests to improve consistency
Better support frameworks for vulnerable taxpayers

These changes should hopefully make the process fairer and more predictable going forward, but sometimes best intentions don’t translate into practical reality so we will have to wait and see how this plays out.

What this Means for You

Act early on tax debts: Don’t wait for the ATO to contact you. If you’re facing cash flow pressure, engage proactively before penalties and GIC escalate. Early action often leads to better terms.
Keep detailed records: Strong supporting documentation is crucial when seeking remission of penalties or interest. Demonstrate why the delay occurred (eg, unexpected revenue drop, illness, or system issues) and what steps you’ve taken to rectify it.
Use professional representation: Tax agents can liaise directly with the ATO on your behalf, prepare strong submissions, and escalate to the Tax Ombudsman where appropriate. This often leads to faster and more commercially practical outcomes than dealing with the matter alone.

While the ATO must collect revenue fairly, the Ombudsman plays a vital role in ensuring processes remain reasonable and transparent. With economic headwinds continuing, understanding your rights and options has never been more important.

If you’re concerned about a tax debt, penalty notice, or GIC charge, contact our team promptly. Early intervention can significantly reduce costs and protect your business or personal finances.

For more information, visit the Tax Ombudsman’s complaints snapshots and reports: Complaints snapshots – Tax Ombudsman

If you have any questions in relation to any of the above, please contact us to discuss further.

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ATO Cracks Down on Personal Services Income Arrangements: Is Your Business at Risk?

Team Juggernaut — Sat, 04 Jul 2026 01:17:49 +0000

Personal Services Income Arrangements are under increased scrutiny from the ATO, making it important for business owners to review how income is earned, retained and distributed within their business structures.

The ATO is sharpening its focus on how taxpayers generating income from personal services deal with that income for tax purposes. In a recent Spotlight bulletin, Small Business Assistant Commissioner Tony Poulakis highlighted the release of Practical Compliance Guideline PCG 2025/5.

This guideline clarifies the ATO’s compliance approach to the “alienation” of personal services income (PSI) — essentially, arrangements which involve routing income earned through your personal skills and efforts via a company or trust, rather than receiving it directly.

Why the ATO Is Interested

Many business owners operate through a company or trust rather than earning income personally. In many cases this is entirely legitimate and provides commercial benefits such as asset protection, flexibility and succession planning.

However, where income is generated primarily from the efforts, skills or reputation of one individual, the ATO is concerned about arrangements that divert income away from that individual in order to reduce tax.

Even where a business is able to pass certain tests to be classified as a Personal Services Business (PSB) under the tax rules and falls outside the strict PSI attribution rules, the ATO has made it clear that general anti-avoidance provisions in Part IVA can apply if the arrangement is primarily tax-driven. If Part IVA applies then this can lead to higher tax liabilities as well as significant penalties and interest charges.

What Does the ATO Consider Low Risk?

The ATO’s guidance focuses heavily on whether the individual generating the income receives an appropriate share of the profits.

Generally, an arrangement is more likely to be considered low risk where:

The individual who performs the work receives most of the economic benefit through salary, wages, bonuses, director fees or trust distributions.
Profits retained in a company are kept for genuine and short-term business reasons.
Family members or associates are only paid reasonable amounts for genuine work performed.

For example, retaining profits in a company to fund the purchase of new equipment in the short-term could be viewed favourably if there is evidence supporting those plans and the company actually follows through with these plans.

What Will Attract ATO Attention?

The ATO has specifically identified a number of higher-risk behaviours, including:

Splitting income with family members who have made little or no contribution to earning that income.
Retaining substantial profits in a company without a genuine short-term commercial purpose.
Directing profits generating from someone’s personal services to entities or beneficiaries primarily because they are taxed at lower rates or because they have tax losses.

The ATO’s expectations in this area are very strict. The greater the mismatch between who performed the work and who is ultimately taxed on the profits from that work, the greater the likelihood of ATO scrutiny.

A Limited Opportunity to Review Existing Arrangements

The ATO has provided a transition period for taxpayers who genuinely review and adjust their arrangements.

Businesses that take genuine steps to move from higher-risk arrangements to lower-risk arrangements by 30 June 2027 are unlikely to face Part IVA action in relation to those arrangements if reviewed by the ATO.

This is not an amnesty, but it is an opportunity for business owners to proactively assess their position and make changes where necessary.

What Should Business Owners Do?

Now is an ideal time to review how profits are being distributed within your structure.

Questions worth considering include:

Are retained profits supported by documented short-term commercial reasons?
Are payments to family members commercially justifiable?
Would your arrangements withstand ATO scrutiny if reviewed?

If you operate through a company or trust and derive income largely from your personal skills or efforts, it is important to review existing arrangements in light of the ATO’s updated guidance. A proactive review today may prevent costly issues tomorrow.

If you have any questions in relation to any of the above, please contact us to discuss further.

The post ATO Cracks Down on Personal Services Income Arrangements: Is Your Business at Risk? appeared first on Juggernaut Advisory.

Payday Super Has Arrived: What Employers Need to Know

Team Juggernaut — Fri, 03 Jul 2026 00:13:14 +0000

Payday Super has now commenced in Australia, requiring employers to ensure super contributions reach employee super funds within seven business days of each payday.

One of the most significant changes to the Australian superannuation system in decades has now commenced. From 1 July 2026, Payday Super requires employers to ensure super contributions reach employee super funds within seven business days of each payday. For many businesses, this represents a major shift from a quarterly payment cycle to a more frequent, real-time obligation.

While the Government is aiming to get super into employee accounts faster and help close the national super gap, the new system introduces new compliance, cash flow and administrative considerations for employers. Businesses that have prepared well should find the transition manageable, but those still relying on quarterly processes need to act quickly to avoid significant problems.

What Exactly Has Changed?

Under the previous rules, employers generally had until 28 days after the end of each quarter to make super contributions. Under Payday Super, the clock now starts on each “Qualifying Earnings” (QE) day — essentially your payday for salary, wages, commissions, bonuses and certain contractor payments.

Key Requirements

Contributions must be received and allocated to the employee’s fund within 7 business days of payday (there are limited exceptions to this).
Shortfalls are now calculated per QE day rather than quarterly.
The ATO’s Small Business Superannuation Clearing House has closed, meaning businesses previously using the service must now use a SuperStream-compliant alternative.

Penalties are also tougher. The administrative uplift can reach 60% of the shortfall (with reductions available for early voluntary disclosure), although the Superannuation Guarantee Charge itself is deductible in more circumstances.

The ATO’s first-year compliance approach (PCG 2026/1) adopts a risk-based view, with businesses that make genuine efforts to comply and promptly rectify mistakes generally treated as lower risk. However, if an employee reports a problem to the ATO then don’t expect the ATO to ignore this.

Managing the June – July Changeover

There is a technical quirk in the rules which could catch out unsuspecting employers, especially when it comes to SG contributions made across the month of July 2026.

If a business has paid employees during the June 2026 quarter then the SG deadline for this quarter would normally be 28 July 2026. However, many employers have decided to pay the SG amount for the June quarter before this deadline to reduce the risk of accidentally triggering a SGC problem.

This is because any SG contributions made from 1 July 2026 will reduce the super owing for the June quarter first, before any remaining amount is used to meet Payday Super obligations relating to pay runs that occur in July.

The best way to manage this situation to avoid SGC liabilities really depends on the dates of any July pay runs. Please contact us if you need help identifying any potential problems or to help come up with a practical solution.

Three Practical Steps to Take Now

Review Your Systems: Confirm that your payroll software, clearing house and internal processes are operating correctly under the new rules. If you have not already done so, review pay codes and contribution workflows to ensure QEs are correctly identified.
Monitor Cash Flow and Processes: Assess the impact of more frequent super payments on cash flow. Review approval processes, onboarding procedures and the handling of bonuses or out-of-cycle payments.
Strengthen Controls and Communication: Ensure payroll and finance teams understand the new requirements and have appropriate controls in place. Ongoing monitoring and periodic reviews will help identify issues before they become compliance problems.

The interdependencies between payroll systems, clearing houses and super funds mean small oversights can quickly create larger compliance issues. Businesses that continue to monitor and refine their processes will be best placed to meet their obligations.

At Juggernaut Advisory, we are helping clients navigate the practical implications of Payday Super through readiness reviews, payroll process assessments and cash flow planning. Our goal is to help businesses remain compliant while building stronger and more efficient systems.

If you would like to discuss how Payday Super affects your business, contact your Juggernaut Advisory adviser. We can help identify any remaining gaps and ensure your systems and processes continue to operate effectively under the new system.

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Federal Budget 2026 Tax Updates: Changes to CGT, Trusts and SMSFs

Team Juggernaut — Wed, 01 Jul 2026 23:41:28 +0000

Federal Budget 2026 tax updates continue to evolve, with the Government announcing changes to several key proposals affecting investors, business owners, discretionary trusts and SMSFs.

Since the Federal Treasurer handed down the 2026-27 Federal Budget on 12 May 2026 there has been a significant amount of commentary on some of the more controversial proposals, including the decision to replace the CGT discount with an indexation system and impose a 30% minimum tax rate on discretionary trusts.

Since our latest update in this area, the Government has announced some changes to these proposals, as well as some other areas of the tax system that weren’t initially impacted by the Budget.

CGT Changes

On budget night the Treasurer announced that the existing 50% CGT discount for individuals and trusts would be replaced with an indexation system and a 30% minimum tax rate on capital gains accruing from 1 July 2027 (with limited exceptions).

However, the Government has announced that it plans to introduce a new Innovative Business CGT Concession that would provide a 50% CGT discount to early-stage investors, including founders and employee share scheme participants in innovative start-up businesses. A consultation paper has been released on the design of this concession.

In addition, the Government is taking steps to increase the annual turnover threshold that applies in determining whether a small business or its owner can access the existing 50% “active asset reduction” under the small business CGT concessions, from $2m to $10m. This change would apply from 1 July 2027.

The existing $2m turnover threshold would remain in place for the other three small business CGT concessions, being the 15 year exemption, retirement exemption and small business rollover relief. Taxpayers who can’t pass the turnover test can still access the concessions if they can pass a $6m net asset value test.

Testamentary Trusts

In the budget, the Government announced that a 30% minimum rate of tax would apply to the net taxable income of discretionary trusts from 1 July 2028. The Government had indicated that this would apply to testamentary trusts, unless they already existed at 12 May 2026.

However, the Government has announced that it will now exempt income from all testamentary trusts from the new minimum tax rate rules, as long as they are established for “genuine testamentary purposes”.

The exclusion from the rules will be limited to income from assets of the relevant deceased estate. For discretionary testamentary trusts established on or after 1 July 2028, the exclusion will only apply to trusts that can only benefit individuals and income tax exempt entities.

SMSF Borrowing Arrangements

As a result of negotiations with the Greens in connection with the changes to the CGT discount and negative gearing, the Government has agreed to remove the ability for SMSFs to borrow to purchase residential property (SMSF borrowing is commonly known as a limited recourse borrowing arrangement).

It seems that existing arrangements will be grandfathered.

We will keep you updated as more developments occur. However, please don’t hesitate to contact us if you want to discuss how these changes impact on your position.

If you have any questions in relation to any of the above, please contact us to discuss further.

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