Practice Updates - May 2025

R&D tax incentive registration deadline approaching 

The Australian Taxation Office (ATO) and the Department of Industry, Science and Resources (DISR) have issued a reminder that businesses with an income year ending on 30 June 2024 must register their 2023–24 Research and Development (R&D) activities by 30 April 2025 to be eligible for the R&D Tax Incentive. Registration does not guarantee eligibility. To strengthen your claim, ensure you maintain contemporaneous documentation of all R&D activities and expenses—records prepared only at tax time may not meet compliance standards. 

The 30 April 2025 deadline to register 2023–24 R&D activities has passed for companies with a 30 June year-end. Registration is essential to claim the R&D tax offset. If you missed the cut-off, you could still request a late registration via the DISR portal—but approval is not guaranteed and requires valid justification. 

Minimum pension drawdown reminder 

The ATO reminds self-managed super fund (SMSF) trustees that all members receiving an account-based pension must receive their minimum pension payment by 30 June 2025. This requirement applies to pensions commenced on or after 20 September 2007. 

The minimum payment is calculated by applying the relevant percentage factor, based on the member's age, to their pension account balance as of 1 July 2024. If the pension commenced partway through the 2024–25 financial year, a pro-rata calculation is required. Failure to meet this obligation may result in adverse tax consequences, including the loss of tax concessions for the fund. 

What’s New: 2026 FBT Rates and Limits 

A fringe benefits tax (FBT) rate of 47% applies across the 31 March 2022 to 31 March 2026 FBT years: 

Type 1 (GST-creditable benefits):

FBT year	FBT rate	Type 1 gross-up rate
Ending 31 March 2022, 2023, 2024, 2025 and 2026	47%	2.0802

Type 2 (non-GST-creditable benefits):

FBT year	FBT rate	Type 2 gross-up rate
Ending 31 March 2022, 2023, 2024, 2025 and 2026	47%	1.8868

Employers must report fringe benefits exceeding a taxable value of $2,000, grossed-up using the Type 2 rate, resulting in a minimum reportable amount of $3,773 on employees' income statements. 

FBT treatment for certain employers the following caps apply: 

• Public benevolent institutions and health promotion charities: $30,000 exemption cap 

• Public and not-for-profit hospitals and public ambulance services: $17,000 exemption cap 

• Rebatable employers: $30,000 rebate cap & meal entertainment and entertainment facility leasing expense benefits capped at $5,000 

The record-keeping exemption threshold for the FBT year ending 31 March 2026 is $10,664. 

Superannuation Rates and Thresholds for 2024–25: Key Updates 

These changes are crucial for employers, employees, and self-managed super fund (SMSF) trustees to ensure compliance and optimize retirement planning. 

Key Highlights: 

• Concessional Contributions Cap: Increased to $30,000 from 1 July 2024 (was $110,000 before), applicable to employer contributions (including salary sacrifice) and personal contributions claimed as tax deductions.  

• Non-Concessional Contributions Cap: Raised to $120,000 from 1 July 2024. Eligible individuals under 75 may access the bring-forward arrangement, allowing up to $360,000 over three years.  

• Transfer Balance Cap: Remains at $1.9 million, limiting the total amount transferable into the retirement phase.  

• Super Guarantee (SG): The SG rate is 11%. The maximum super contribution base is $65,070 per quarter, capping mandatory employer contributions.  

• Government Co-Contribution: Maximum entitlement of $500 for individuals earning up to $45,400, phasing out at $60,400 

  
  

Stairway to jail over GST fraud 

The ATO has intensified its efforts against GST fraud, resulting in the sentencing of a Melbourne man to 2 years and 11 months imprisonment. The individual fraudulently obtained over $390,000 in GST refunds and attempted to claim an additional $330,000 through 31 false business activity statements between June 2021 and June 2022. 

This case is part of the ATO's Operation Protego, which has led to over 100 convictions and the issuance of approximately $300 million in penalties and interest. The ATO emphasizes that GST fraud is a serious offense with significant consequences. 

To ensure your business remains compliant and to avoid severe penalties, it's crucial to maintain accurate records and submit truthful tax information.

Key Takeaways from Draft GST Revisions 

The ATO has released draft updates for two significant Goods and Services Tax (GST) rulings: 

• GSTR 2005/6: This ruling guides determining when a supply is connected with Australia, particularly concerning cross-border transactions. The draft update aims to clarify the application of GST to supplies involving non-resident entities and the criteria for establishing a connection with Australia. 

• GSTR 2007/2: This ruling addresses the application of GST to supplies of rights or options for use outside Australia. The draft update seeks to refine the interpretation of when such supplies are considered GST-free, focusing on the effective use and enjoyment of the rights or options outside Australia. 

Both draft updates are open for public consultation, with submissions due by 9 May 2025. These updates are part of the ATO's ongoing efforts to modernize GST guidance in light of evolving international business practices. 

Working from home deduction fixed rate increased 

The ATO has finalized Practical Compliance Guideline (PCG) 2023/1, introducing a revised fixed-rate method for claiming work-from-home (WFH) expenses, effective from 1 July 2022. 

Key Highlights: 

• Revised Fixed Rate: Taxpayers can claim 67 cents per hour for additional running expenses incurred while working from home.  

• Covered Expenses: The rate covers electricity and gas, internet, mobile and home phone usage, and stationery and computer consumables.  

• Record-Keeping Requirements: From 1 March 2023, detailed records of actual hours worked from home and evidence of incurred expenses are mandatory.  

• Eligibility Criteria: The work performed must be substantive and directly related to income-producing activities.  

• Alternative Method: Taxpayers not meeting the criteria must use the actual cost method for claiming WFH deductions. 

  
  

Lynden Group is here to help you understand how these proposed changes may impact your business and help you navigate the details and adapt with confidence.

Office: +61 3 91157406 

Direct: +61 3 85481843

Email: info@lyndengroup.comauinfo@lyndengroup.com.au