GST Archives - DLK Advisory

2026 – 27 Federal Budget Update

Admin 15th May, 2026

The 2026 – 27 Federal Budget introduces a range of significant tax and policy measures impacting individuals, property investors, and private groups. The reforms are set against a backdrop of persistent cost of living pressures, elevated interest rates, global uncertainty, and a continued focus on fiscal sustainability.

Many measures are proposed to apply from 1 July 2027 or later and remain subject to consultation and legislative refinement. As such, further detail will be critical in assessing their full impact.

Key Tax Measures

Capital Gains Tax (CGT) Reform

From 1 July 2027, the Government proposes to:

Replace the existing 50% CGT discount with an inflation-based indexation method
Introduce a 30% minimum tax on net capital gains

Practical implications:

Taxpayers may need to obtain market valuations of assets as at 1 July 2027
Existing accrued gains up to that date are expected to retain current CGT treatment under transitional rules
Investment strategies and asset allocation decisions may require reassessment
The application of the minimum tax to superannuation funds and managed investment vehicles remains unclear

Overall, these changes represent a fundamental shift in the taxation of capital and may reduce the attractiveness of long-term passive investment strategies relative to other asset classes.

Negative Gearing – Residential Property

From 1 July 2027, negative gearing concessions for residential property will be limited.

Losses on established residential properties will be ring-fenced
These losses can only be offset against:
- Rental income, or
- Future capital gains from residential property
Losses will no longer offset salary or business income
Grandfathering applies to existing holdings (including contracts entered prior to Budget night)
Exclusions include:

- New residential developments
- Superannuation funds (including SMSFs)
- Widely held trusts and build-to-rent projects
- Certain government-supported housing investments

This measure is expected to influence investor behaviour, gearing strategies, and ownership structures, particularly in the residential property market.

Minimum Tax on Discretionary Trusts

From 1 July 2028, a 30% minimum tax is proposed on discretionary trust income.

Tax will apply at the trustee level, with beneficiaries generally receiving tax credits
Aimed at limiting income splitting and the use of bucket company structures
Exclusions include:
Fixed and widely held trusts
Complying superannuation funds
Deceased estates and charitable trusts
Special disability trusts

These changes are expected to significantly impact family groups and may necessitate review or restructuring of existing trust arrangements, subject to the availability of anticipated transitional relief.

Business Tax Measures

Several measures are aimed at supporting business cashflow and investment:

Loss carry-back
Companies (turnover under $1 billion) can offset current losses against profits from the previous two years (from 1 July 2026), subject to franking constraints
Instant asset write-off
The $20,000 threshold will become permanent from 1 July 2026 for businesses with turnover up to $10 million
Start-up support
Early-stage businesses may access refundable tax offsets for losses in initial years (from 1 July 2028, subject to limits)

These measures provide targeted relief, particularly for SMEs and growing businesses.

Research & Development (R&D) Tax Incentive

From 1 July 2028, the R&D incentive will be re-focused:

Increased support for core R&D activities
Reduced benefits for supporting (non-core) expenditure
Introduction of tighter thresholds and limitations on refundability

Businesses undertaking R&D should review project eligibility, expenditure categorisation, and expected cashflow impacts.

Venture Capital and Investment Incentives

Increased thresholds under VCLP and ESVCLP regimes to support larger investments
Measures aimed at encouraging innovation and growth-stage funding

These changes may enhance access to capital for emerging businesses.

Personal Tax Measures

Working Australians Tax Offset (WATO)
$250 annual offset from 1 July 2027
Standard deduction for work-related expenses
$1,000 deduction from the 2026–27 income year without substantiation
Personal income tax cuts (previously legislated)
The 16% rate reduces to:
- 15% from 1 July 2026
- 14% from 1 July 2027
Medicare levy thresholds to increase from 1 July 2025

These measures aim to provide modest cost-of-living relief and reduce compliance burden.

Other Measures

Electric vehicle FBT concessions to be phased down, moving to a 25% concession from 1 April 2029
PAYG instalments expected to become more dynamic and software-driven from 1 July 2027
Foreign resident CGT changes expanding the definition of taxable Australian property (including retrospective elements)
Pillar Two global minimum tax alignment from 1 January 2026

Economic Context and Policy Direction

The Budget reflects a broader policy shift focused on:

Productivity and investment in innovation
Housing supply and generational equity
Energy security and economic resilience
Fiscal sustainability and revenue integrity

Key structural themes include:

Reduced reliance on tax concessions for asset-based wealth (property and trusts)
Increased focus on labour income support and business investment
Measures aimed at encouraging capital into productive economic activity

DLK Advisory Commentary

The 2026 – 27 Budget represents a material shift in Australia’s tax landscape, particularly in relation to capital taxation and private wealth structures.

While the measures are significant, they are largely targeted rather than forming part of a comprehensive tax reform framework. This raises the potential for increased complexity and unintended interactions between rules.

Importantly:

Many measures are not yet legislated
Transitional rules and detailed design will be critical
A backlog of announced but unenacted measures continues to create uncertainty

What This Means

Clients should consider:

Reviewing long-held investment positions, particularly in light of CGT reform
Assessing property investment strategies and gearing approaches
Re-evaluating trust structures and distribution strategies
Modelling the cashflow and tax impact of proposed changes ahead of implementation

Next Steps

DLK Advisory recommends:

Early engagement to model the impact of proposed reforms
Identifying opportunities for restructuring or repositioning ahead of commencement dates
Monitoring ongoing consultation and legislative developments closely

DLK Advisory will continue to provide updates as further detail becomes available.

Will the proposed $1,000 instant tax deduction benefit you?

Admin 13th May, 2026

You may have heard about the Federal Government’s proposed $1,000 “instant” tax deduction for work-related expenses. Before you get excited about potential savings, it’s worth understanding who may benefit, when it could apply, and whether it would be better than claiming your actual expenses.

What’s being proposed?

The Government has released draft legislation for a new standard deduction of up to $1,000 for eligible taxpayers. The aim is to simplify tax returns by allowing people with smaller work-related expenses to claim a set amount without the need to substantiate actual expenses. If introduced, this would replace the current $300 no-receipt threshold and the separate $150 laundry concession. However, this is still just a proposal and is not yet before Parliament. If passed, it would apply from the 2026–2027 financial year, meaning it won’t help with 2025–2026 returns.

The deduction would be available to Australian tax residents earning assessable labour income, including salary and wages and certain PAYG-withheld payments such as director fees, termination payments, and parental leave pay. The deduction is capped at the lesser of $1,000 or total assessable labour income.

How much could you actually save?

A deduction reduces taxable income, not a direct cash refund, so the benefit depends on your tax rate. For example, someone on a 30% tax rate could save up to $300, while higher income earners could save up to $450 (or $470 including Medicare levy). The Government estimates 6.2 million taxpayers may benefit, with average savings of $205. However, if you already claim more than $1,000, you may be better off keeping receipts and claiming actual expenses. ATO data shows the average claim was $2,739 and the median $1,338, suggesting many taxpayers may not benefit financially, though those near $1,000 may value reduced record-keeping.

What expenses would count?

The deduction would cover home office costs, work clothing and uniforms, tools and equipment, work-related car expenses, and stationery and supplies. You could still claim certain items on top of the $1,000, including charitable donations, union fees, income protection insurance, and investment-related expenses.

Low-value pool changes:

From 2026–2027, you would no longer be able to allocate assets to a low-value pool where they are mainly used to produce assessable labour income. This applies only to new allocations and won’t affect existing assets, but it may slow down deductions for items like computers or tools.

What should you do?

Remember this is still a proposed change. Consider whether you typically claim more or less than $1,000—if more, the standard deduction may not benefit you. Tax changes can have unexpected consequences, so if you want to optimise your deduction strategy, contact our office to discuss your circumstances and ensure you’re maximising your legitimate tax benefits.

Fuel tax credit rates changed from 1 April 2026

Admin 5th May, 2026

If you’re a sole trader or small business owner claiming fuel tax credits, it’s important to know that fuel tax credit rates have changed from 1 April 2026. While the change may seem minor, using the wrong rate could affect the amount you claim and may lead to errors in your Business Activity Statement (BAS) or tax reporting.

Fuel tax credits allow eligible businesses to claim back the fuel tax included in the price of fuel used for business activities, such as running heavy vehicles, machinery, generators or equipment.

What’s changed? The Australian Government temporarily cut fuel excise on petrol and diesel for three months. Because fuel tax credits are based on the amount of excise included in the fuel price, the reduction in excise has directly reduced the credit businesses can claim in the 3 month period from 1 April 2026.

This means: fuel bought before 1 April 2026 must be claimed at the old rate; and fuel bought on or after 1 April 2026 must be claimed at the new rate. If you purchased fuel across both periods, you may need to use two different rates when calculating your claim. You can find the latest fuel tax credit rates on the ATO website.

Why this matters

Your claim amount may change. Even a small rate adjustment can affect the total amount you’re entitled to claim, particularly if fuel is a regular business expense. Using the updated rates ensures you are claiming the correct amount.

Good record keeping is essential. To claim accurately, you need records that show when fuel was purchased, how much was bought, and that it was used for eligible business purposes. This is especially important if you’re preparing your own BAS.

Errors may delay or affect your return. Using the wrong fuel tax credit rate may result in overclaiming or underclaiming. This can lead to BAS corrections later, or delays if the ATO reviews your claim.

Fuel costs affect cash flow. Fuel tax credits can provide valuable cash flow support, perhaps especially for sole traders and contractors. Claiming the right amount helps ensure you receive the full benefit available.

What you should do now. If you claim fuel tax credits, review any fuel purchases made from 1 April 2026 onward and make sure you’re applying the updated rate. The ATO offers an online fuel tax credit calculator to help work out the correct amount based on the fuel type, purchase date and business use. Staying on top of rate changes helps keep your BAS accurate and ensures you don’t miss out on valuable tax credits.

The ATO’s focusing on small businesses in 2026: are you ready?

Admin 24th February, 2026

The ATO is encouraging small businesses to start 2026 strong by taking proactive steps to avoid compliance issues that could lead to penalties or enforcement action. Don’t forget we’re here to help you get your tax processes running smoothly.

Why this matters now
Small business tax debts have grown to over $50 billion nationally, and the ATO is accelerating efforts to collect unpaid taxes. It warns that many businesses run into avoidable problems simply because they haven’t maintained proper records, reported all income or managed cash flow effectively. Part of the estimated $27.2 billion small business income tax gap stems from these preventable mistakes, making it crucial for business owners to understand the ATO’s focus areas and take corrective action early.

Key areas of concern
The ATO has identified several critical compliance risks that small businesses should address: late lodgments and unpaid tax debts, which can trigger firmer recovery actions; poor cash flow management, particularly failing to set aside funds for GST and PAYG withholding obligations; inadequate record keeping, especially businesses still using the “shoebox of receipts” strategy; unreported income, particularly from cash transactions; and superannuation guarantee obligations, which should especially be top-of-mind with payday super changes coming in July 2026.

Simple steps to stay compliant
The good news is that most compliance issues are preventable with some basic habits. For example:

Set up separate accounts: Keep dedicated bank accounts for GST collections and PAYG withholding. Don’t be tempted to use these funds to boost cash flow, as this creates bigger problems when obligations fall due.
Lodge and pay on time: Mark your calendar for all lodgement deadlines and payment due dates. If you can’t meet a deadline, contact us or the ATO early to discuss options rather than ignoring the problem.
Keep accurate records: Move away from paper-based systems and embrace digital record keeping. The ATO app offers useful features like myDeductions and business performance check tools for sole traders.
Report all income: Ensure you declare all business earnings, including cash payments. The ATO receives data from multiple sources and conducts audits to identify unreported income.
Prepare for payday super: From 1 July 2026, employers must pay superannuation guarantee contributions each payday rather than quarterly. Review your payroll systems now to ensure you’re ready for more frequent payments.

Getting professional help
The ATO strongly recommends engaging a registered tax practitioner who understands your business. That’s where we come in! Above all, avoid relying on informal advice from friends or social media for tax guidance. Professional support can help you navigate complex areas and prevent costly mistakes.

ATO support available
The ATO also provides resources to help small businesses stay compliant, including a record keeping evaluation tool, a cash flow kit with templates and planning tools, online services for checking lodgment status and managing debts, a payday super checklist, and multilingual support through the Translating and Interpreting Service.

Take action now
Don’t wait for problems to escalate. The ATO emphasises that engaging early is always better than dealing with consequences later. Implementing these simple steps and seeking professional advice now means you can focus on growing your business in 2026 rather than worrying about compliance issues. Contact our office to discuss how we can support your business and help ensure you’re meeting all your tax obligations properly.

FBT and tax considerations for end-of-year parties and gifts in your business

Admin 26th November, 2025

As the end-of-year season approaches, it’s a great time to celebrate with your employees and show appreciation for their hard work throughout the year. However, it’s essential to understand the potential tax implications, particularly concerning fringe benefits tax (FBT), when planning holiday entertainment or gifts for employees.

Understanding FBT on holiday celebrations

FBT is a tax employers pay on certain benefits provided to their employees or employees’ associates (like family members). When planning a festive gathering, such as a Christmas party, it’s crucial to determine if your event might attract FBT.

Here are some key points to consider:

Location and attendees: If your party is held on business premises during a working day and is only for current employees, you generally won’t have to pay FBT on food and drinks. However, if the event is off-site or includes employees’ associates, you might need to consider FBT, unless the cost per person is under $300 and deemed a minor benefit.

Entertainment and gifts: If you provide gifts alongside the party, remember that gifts under $300 per person can also qualify as minor benefits, exempting them from FBT. However, if gifts exceed this amount, FBT may apply.

Including your clients: Costs related to clients attending your event are not subject to FBT. This means you can invite clients without worrying about FBT implications for their expenses.

Calculating the taxable value of entertainment

When it comes to calculating FBT on entertainment-related benefits, you have a few options:

Actual value method: This method involves calculating the actual cost of the entertainment provided to employees and their associates. If non-employees are involved, you need to apportion the costs accordingly. For example, if you host a dinner where employees and clients are present, only the portion related to employees is considered for FBT.

50:50 split method: If you hire or lease entertainment facilities (such as a corporate box or function room), this method allows you to allocate 50% of the total entertainment leasing expenses to FBT, regardless of whether it’s for employees, clients or others. This can simplify calculations but might not always be the most cost-effective approach.

Meal entertainment valuation: If the entertainment involves meals without recreational activities, you can use meal entertainment valuation methods. Options include the 50:50 split or the 12-week method, where you track meal costs over a period and determine the taxable portion related to employees. Both of these options are based on your expenditure on all meal entertainment for all people during the FBT year.

Important considerations

Recordkeeping: It’s essential to maintain accurate records of all entertainment expenses, including costs (total and per-person), recipients and the calculation methods you’ve used. This documentation supports your FBT calculations and ensures compliance.

Tax deductions and GST credits: Generally, if your event is exempt from FBT, you cannot claim income tax deductions or GST credits for the associated costs. This is important to keep in mind when budgeting for your celebrations.

Gifts to clients: If you’re giving gifts to clients, it’s important to note that these are typically not subject to FBT. However, you may be able to claim a tax deduction for such gifts, provided they aren’t classified as entertainment.

Understanding these key aspects of FBT and tax considerations for holiday entertainment and gifts can help you enjoy the festive season with your team without unexpected tax liabilities. If you’re ever in doubt, consulting with your tax professional can provide additional peace of mind.

Employer SG obligations: annual report

Admin 4th December, 2023

In the most recent employer super guarantee compliance and obligations report from the ATO, most employers seem to be doing the right thing by their employees and complying with super guarantee obligations without intervention. This rate has remained steady from the previous year. Going forward, as a part of the government announced a package to move to “pay day” super, the ATO will have improved SG recovery targets each year which is to commence from the 2026-27 financial year.

Click here to read our article

https://dlkadvisory.com.au/wp-content/uploads/2023/12/super_employer-Piggy-Bank-300×190.jpg

Statement of tax record for businesses

Admin 30th November, 2023

In the current economic climate, the Commonwealth government remains one of the few still contracting for large projects. Businesses that would like to tender for Commonwealth government contracts over $4m will need to have a satisfactory statement of tax record. This also applies to prime contractors, or suppliers involved in a panel arrangement. Depending on the structure of the business involved, differing requirements apply in relation to the statement of tax record, and some contracts may require updated statements during the life of the contract.

Click here to read our article

https://dlkadvisory.com.au/wp-content/uploads/2023/11/bt_statement_tax_record-300×190.jpg

ATO data-matching: directors and officeholders

Admin 23rd November, 2023

Directors and officeholders should be aware that the ATO is conducting a data-matching program which will not only ascertain whether directors are meeting their obligations to have director IDs but will also link individuals known to the ATO to officeholders and their associated companies as recorded on various registers. In addition, the program would also support the work of the phoenix taskforce. It is estimated that records relating to approximately 11m individuals will be affected.

Click here to read our article

https://dlkadvisory.com.au/wp-content/uploads/2023/11/ato_data_matching_directors-300×190.jpg

Proposed mechanisms for payday super

Admin 3rd November, 2023

In an effort to reduce wage theft and prevent losses in retirement income for many Australians, the government is seeking to legislate its payday super measure, as first proposed in the 2023-24 Federal Budget. As the first step, a consultation paper has been released which proposes two models that could be used to implement the measure. Based on the outcomes of the consultation, the government will redesign the super compliance framework to incorporate payday super, which is proposed to commence from 1 July 2026 subject to the passage of legislation.

Click here to read our article

https://dlkadvisory.com.au/wp-content/uploads/2023/11/super_payday_mechanisms-300×190.jpg

Deductions related to holding vacant land

Admin 1st November, 2023

The ATO has recently released a Ruling that clarifies when deductions for losses and outgoings that relate to holding vacant land will be denied in relation to individuals not conducting a business or in primary production. Among other things, it provides guidance on what is considered to be a substantial and permanent structure on the land, under what circumstances the structure is considered to be available for use, and what structures are considered to be independent and not incidental to the purpose of any other structure.

Click here to read our article

https://dlkadvisory.com.au/wp-content/uploads/2023/11/Tax-deductions_vacant_land-300×190.jpg