Practice Updates - September 2025

Tax Time 2025: updates on lodgment activity and refunds 

As of late August, more than 6.1 million Australians have lodged their 2025 income tax returns. The Australian Taxation Office (ATO) has already processed over 4.5 million refunds, worth a total of $12 billion, with the average refund sitting at $2,639. 

With the 31 October lodgment deadline approaching, the ATO is reminding taxpayers to lodge on time and ensure accuracy in their claims to avoid delays or compliance issues. Engaging early with our tax adviser remains the best way to maximise entitlements and stay compliant. 

Tasmanian payroll tax relief extended for apprentices 

The Taxation and Related Legislation (First Home Owner and Payroll Relief) Bill 2025 (the Bill) has been introduced to amend the Payroll Tax Rebate (Apprentices, Trainees and Youth Employees) Act 2017 (TAS), (Payroll Tax Rebate Act), to extend the Payroll Tax Rebate Scheme for eligible apprentices from 1 July 2025 to 30 June 2026. In addition, the Bill proposes to delay the repeal date of the Payroll Tax Rebate Act from 30 June 2028 to 30 June 2029. The amendments will commence retrospectively from 30 June 2025.

ATO to include tax 'debts on hold' in taxpayer account balances 

From August 2025, the ATO progressively includes ‘debts on hold’ in taxpayer account balances. 

A ‘debt on hold’ arises where the ATO has previously paused recovery because collection was not considered cost-effective. While these debts have always been offset against future refunds or credits, they have not historically appeared on account balances. 

Going forward, taxpayers (or their agents) with debts of $100 or more will receive written notice before the amount is added. Smaller debts will be included without prior notification. Balances can be viewed via ATO online services or in a statement of account. 

The ATO has confirmed it will remit the general interest charge (GIC) for past periods when debts were not visible. However, once added, GIC will begin to accrue six months after inclusion. 

Bill to reduce student debt is now law  

Legislation has been passed to reduce the impact of student debt. A one-time 20% cut will be automatically applied to all eligible student loan balances incurred on or before 1 June 2025, including: HELP loans (HECS-HELP, FEE-HELP, STARTUP-HELP, SA-HELP, OS-HELP); VET Student Loans; Australian Apprenticeship Support Loans; Student Start-up Loans; Student Financial Supplement Scheme. 

The minimum income threshold for compulsory repayments will rise from $54,435 in 2024–25 to $67,000 in 2025–26 and will continue to increase annually in line with wage growth. In addition, a new marginal repayment system will be applied, where repayments are calculated only on income above the $67,000 threshold, rather than as a percentage of total repayment income. 

These changes will provide immediate relief for borrowers and ensure a fairer, more manageable repayment system for Australians with student debt. 

Getting the CGT main residence exemption right 

The ATO reminds taxpayers to review their circumstances carefully when applying the main residence exemption for capital gains tax (CGT): 

• Consider whether you bought or sold property during the past income year. If you sold a property, determine whether it was your primary residence, used to earn income (e.g. rental or business), or vacant land. 

• Ensure you meet the record-keeping requirements for property transactions. 

• Note that the exemption does not apply to vacant land, even if you intended to build your main residence there. 

• The 6-year absence rule is available only if the property was genuinely your main residence before being rented out. 

• In most cases, you can only claim one main residence at a time – except for the 6-month overlap when moving between homes. 

Cooking the books? Darwin food businesses under investigation 

The ATO and FWO have launched Operation Sentinel in Darwin, with more than 30 surprise visits to restaurants, cafés, and fast-food outlets. Regulators are investigating suspected shadow economy activities such as underpaying wages, cash-in-hand payments, poor record-keeping, and alcohol excise avoidance. Authorities warn of serious penalties for non-compliant employers and urge workers, including visa holders and young staff, to report concerns about pay or entitlements. 

The ATO is ramping up its efforts to recover an enormous A$50 billion in unpaid taxes 

Australia taxpayers owe the ATO a staggering $50 billion in unpaid tax, much of it already self-reported and including GST and wages withheld but not passed on. ATO Commissioner Rob Heferen said firmer action is underway, with 22,000 taxpayers owing $11bn singled out. Measures include statutory demands, wind-up processes, director's penalty notices, and travel bans. With tax season underway, over 4.5 million refunds worth $12bn have already been issued. 

Speak with Lynden Group today to safeguard your business, minimise penalties, and stay ahead of ATO recovery action. 

Office: 03 91157406   

Direct: 03 85481843  

Email: info@lyndengroup.com