15 September 2025 to 19 September 2025
Weekly Bulletin Contents
TAX
Monday 15 September 2025
Appeal dismissed – not competent and no question of law
The Federal Court has dismissed a taxpayer’s appeal on the basis that the appeal was not “competent” and that it did not raise a question of law. The decision at first instance involved the taxpayer’s disallowed objection to default assessments for FBT made against the taxpayer in respect of a 2010 Ferrari California vehicle purchased by the taxpayer and used by its director as his work vehicle. In that case, the Tribunal exercised its discretion to refuse leave to the taxpayer to amend its grounds of review to enlarge them beyond those relied upon by the it at the time of the relevant objection decisions.
In dismissing the taxpayer’s appeal from that decision, the Federal Court said that what the taxpayer was attempting to do was to “transmogrify a proceeding which was incompetent, and which has been dismissed into a new and materially different proceeding for judicial review founded on different legislation and governed by different parts of the Rules”. Accordingly, it dismissed the taxpayer’s appeal on the grounds that it was “incompetent” – and on the grounds that the appeal did not raise any questions of law. (RPPL Pty Ltd v Commissioner of Taxation [2025] FCA 1126)
Claims for film tax producer offset dismissed
In two unrelated decisions the ART has confirmed that film making companies were not entitled to the tax producer offset.
In the first matter, the ART confirmed the decision of Screen Australia that the film company had met a mandatory requirement under s 376-65 (1)(a) ITAA 97 for issuing a certificate to a company for a film in relation to the producer offset- namely that “the company either carried out, or made arrangements for the carrying out of, all the activities that were necessary for the making of the film…” (Kane Motion Picture Pty Ltd and Screen Australia (Taxation and business) [2025] ARTA 1771, 4 September 2025).
In the second matter, the ART confirmed the decision of Screen Australia that the film company had not in fact incurred some $7m of alleged qualifying Australian production expenditure paid to a related entity for post-production services. Instead, the ART found that the amount had not been paid and nor was there a presently existing liability that the film company was “definitively committed” to pay – in terms of the relevant agreement between the parties (Little Monster Productions and Screen Australia (Taxation and business) [2025] ARTA 1732, 9 January 2025).
ATO: Tips to help your sole trader clients
The ATO has advised that it is seeing sole traders make mistakes in following areas: not reporting all income (including income earned outside their business, like a side hustle, cash jobs or payments in-kind/barter deals; over claiming expenses (including claiming the portion of an expense related to personal use or overstating the cost of goods sold and other business expenses); calculating business losses; incorrectly claiming and offsetting losses from non-commercial business activities against other income sources; misreporting PSI to gain tax benefits; not registering for GST if they are in the taxi or ride-sourcing industry or when they reach or expect to reach the GST threshold; and not keeping accurate and complete records.
Tuesday 16 September 2025
ATO: New complaint service commitment
The ATO has advised that it will be introducing a new complaint service commitment that sets a clearer expectation of the level of service taxpayers and tax professionals can expect when they lodge a complaint. The new service commitment will be to resolve 80% of complaints within 28 business days (as opposed to the existing commitment to resolve 85% of complaints within 15 days, or within a timeframe negotiated with the complainant). The ATO said that it will continue to keep the complainant informed throughout the complaints process, and that they will receive notification from it if we exceed the service commitment. The ATO said that it will start reporting against this new commitment in late September.
Valuation methods for ESS interests and start-up concession
The Income Tax Assessment (Methods for Valuing Unlisted Shares for the Employee Share Scheme start-up concession) Legislative Instrument 2025 has been made. It replaces the Income Tax Assessment (Methods for Valuing Unlisted Shares) Approval 2015 instrument and continues to provide safe harbour valuation methods that eases the compliance burden for companies accessing the ESS start-up concession. The instrument commences on 1 October 2025. At the same time, the ATO has released ESS 2015/1 “approval” which is used in working out the value of unlisted ordinary shares for the purposes of s 83A-33(5) of the ITAA 1997 at the time when the relevant ESS interests are acquired.
Former ATO employee sentenced for misuse of taxpayer information
The National Anti-Corruption Commission has advised that a former ATO employee has been convicted and sentenced for falsely claiming Victorian and Australian Government payments using the sensitive information and records of 4 taxpayers. She was sentenced to a total effective sentence of 5 months imprisonment. She had previously pleaded guilty to 10 charges, including obtaining financial advantage by deception and aiding and abetting another person to attempt to commit an offence. This conviction and sentencing stems from Operation Hay, a joint investigation commenced by the former Australian Commission for Law Enforcement Integrity and the ATO.
Wednesday 17 September 2025
ATO: Notification when debts on hold are included in account balances
The ATO has advised that if your client has a tax debt on hold included in their account balance, you’ll receive a notification in Online services for agents. The notification will appear on your client’s account. The debt on hold will be shown in your client’s account as ‘Existing debt on hold included in account balance’ and will include more information about their debt on hold.
No entitlement to ITCs after 4 year period for BAS lodgement
A taxpayer has been unsuccessful in seeking an extension of time to lodge BASs outside the prescribed 4 year period for the purpose of claiming input tax credits (ITCs) of $3000. The ART dismissed the taxpayer’s argument that an extension should have been granted because of his deteriorating health, financial hardship and other difficult personal circumstances. Instead, the ART confirmed that an extension could only be granted if the exceptions in s 93-10 of the GST Act applied ie where the supplier to which the acquisition relates is incorrectly assessed as input taxed or the ATO agrees to treat a document as a tax invoice before the end of the 4-year period after that period. (Mangini and FCT (Practice and procedure) [2025] ARTA 1788, 13 September 2025)
GST Determination re global accounting method for 2nd hand goods
The A New Tax System (Goods and Services Tax) (Acquisitions of Second-hand Goods) Determination 2025 has been made. It continues to specify the kinds of second-hand goods to which Subdiv 66-B of the GST Act applies to allow GST registered entities to apply a global accounting method for calculating GST liabilities on acquisitions of such goods. The instrument commences on 17 September 2025.
ATO: Action taken to ensure compliance in the fast food, café industry
The ATO has advised that a recent joint investigation by the ATO and Fair Work Ombudsman under the Shadow Economy Taskforce led to a series of surprise visits to more than 30 fast-food and hospitality businesses suspected of worker exploitation and other shadow economy activities. The ATO also said that if you have clients who run a café, restaurant, or fast-food outlet, you can remind them to make sure their workers are getting their entitlements and the business is meeting its tax obligations.
Thursday 18 September 2025
COVID victim wound up over ATO penalties and interest
A company which ran a number of profitable Domino’s Pizza franchises until the COVID pandemic struck in 2020 has unsuccessfully challenged a Registrar’s winding up order before the Federal Court.
The company owed the ATO some $155,000, which it claimed was more than offset by a claim for damages against Domino’s Pizza it had on foot, Domino’s having allegedly responded to the COVID lockdowns in a manner that was adverse to the financial interests of its franchisees. The amount owing represented penalties and interest, the business having satisfied all its primary tax debts, as well as its employee obligations.
The Court held that the company was insolvent under the Corporations Law, having been duly served with a statutory demand and not having presented any evidence to the contrary. The Liquidator’s Statutory Report to Creditors confirmed this. In the meantime, the company’s claim against Domino’s was unlikely to yield any fruit in the foreseeable future.
The Court rejected the argument that the ATO should have alerted the company about the risk of penalties and interest being applied and held that it never inferred that these charges would not be imposed.
The broad objective of the law in this regard is that insolvent companies should be wound up so as to avoid the risk of them incurring further debts. The Court confirmed the issue of the winding up order.
Deputy Commissioner of Taxation v PAD & Sons Pty Ltd [2025] FCA 1131 (12 September 2025), Owens J
Unregistered tax agent taken to Federal Court
The Tax Practitioners Board (TPB) has advised that it has instituted Federal Court proceedings seeking civil penalties against an unregistered tax agent, Yan Qun Ke. The TPB is also seeking a court order for Ms Ke to cease providing tax agent services without being registered.
The TPB alleges that Ms Ke, whose registration as a tax agent lapsed in November 2017, continued to lodge tax returns for multiple clients for a fee over the period from 2021 to 2024. During this time she was not registered as a tax agent under the Tax Agents Services Act 2009, and was not subject to regulation by the TPB, thereby creating risks for her clients.
FRIDAY 19 September 2025
R&D dispute again decided against the taxpayer
In a case that has seen eight years of litigation already, a company developing a proprietary Health and Fitness System focusing on calorie loss in the context of diet and fitness parameters, while developing an algorithm around the results, is back to where they started in 2019 after an earlier AAT decision that upheld an Industry, Innovation and Science Australia (IISA) ruling that the project was not eligible for the R&D Tax Incentive.
That AAT decision was ultimately overturned by the Full Federal Court, which took a dim view of the Tribunal including verbatim 64 of 67 paragraphs of the IISA final submission in its Reasons for Decision without any attribution. The Full Court decided that such a practice was not a good idea and could lead a fair minded lay observer to conclude that the Tribunal had not fully put its mind to the matter and that its Reasons for Decision were not its own.
The matter was remitted to a differently constituted Tribunal, which has now handed down its own findings, one presumes without any unattributed quotes. In a somewhat prosaic ruling, the reconstituted Tribunal has held that, having regard to all the evidence before it, the core R&D activities described in the Applicant’s detailed project descriptions had not actually been carried out.
For good measure (and perhaps with an eye on yet further appeals), the Tribunal also ruled that, even if the activities described had actually been carried out, they would not have satisfied the eligibility requirements set out in Div 355 ITAA 1997 because:
there was knowledge and experience already in existence before and during the relevant years which would have been known to a competent professional in the field; and
the activities described would not have been employing a scientific method based on the principles of established science.
Australian National Audit Office to conduct SMSF review
The ANAO has announced that it proposes to conduct an audit of the ATO’s regulation of Self-Managed Superannuation Funds (SMSFs).
Listed as a potential project for 2025-26, this audit would examine the effectiveness of the ATO’s regulation of SMSFs, and include a follow-up audit on employer compliance with the Superannuation Guarantee requirements.
ATO App Security Update
The ATO has added new security features to its app, including the ability for taxpayers to unlock their account using the same device they used to lock it. These updates build on earlier features allowing accounts to be locked and suspicious activity identified in real-time.
BAS agents can now view ATO app messages via Online services for agents, and clients with a Strong myID can restore access without contacting the ATO. Factsheets for practitioners and clients are available at ato.gov.au/app.
SUPER & FINANCIAL SERVICES
Facts Trump Labels in SG Employee vs Contractor Test
In a recent private binding ruling, the ATO has confirmed that two individuals engaged as “independent contractors” were in fact employees under both subsections 12(1) and 12(3) of the Superannuation Guarantee (Administration) Act 1992 (SGAA).
Despite the workers being contracted under agreements that explicitly denied an employment relationship, the ATO concluded that the nature of the arrangements – including their integration into the business, the control exercised by the principal, personal service obligations, and how services were paid for, all met the legal definitions of employment.
Merely labelling someone a contractor in a contract does not override the substance of the relationship. If the individual is working in your business, not for their own, superannuation obligations likely apply.
APRA and ASIC Challenge Platform Trustees on Product Oversight and Member Protection
Notes from the recent Superannuation CEO Roundtable have been released. At the event, the regulators made clear that trustee oversight is an expectation.
The key themes were:
- Regulatory concerns: APRA warned that issues with the Shield and First Guardian master funds risk undermining trust in the system. Trustees were reminded that adviser involvement doesn’t remove their obligations under s52 of the SIS Act.
- Fee monitoring: ASIC pushed trustees to disrupt harmful advice models and improve oversight of fee deductions. CEOs cited tools like data triangulation, dashboards, and adviser monitoring.
- Due diligence: Trustees are tightening reviews of MIS governance, related entities, and investment flows.
- Collaboration: Regulators called for industry-wide standards and real-time data sharing to address high-risk structures.
- FSC action: The Financial Services Council is drafting guidance to lift onboarding and monitoring practices across platforms.
Centrelink rates and thresholds change tomorrow
From tomorrow, 20 September 2025, new Centrelink rates and thresholds come into effect.
The maximum Age Pension (including supplements) will increase from $1,149.00 (single) to $1,178.70 per fortnight and from $866.10 (each member of a couple) to $888.50 per fortnight.
The new rates and thresholds that will change the asset and income test thresholds cut-off thresholds as follows.
Asset test – 20 September 2025
| Homeowner | Non-homeowner | |||
| Full pension | Cut-off | Full pension | Cut-off | |
| Single | $321,500 | $714,500 | $579,500 | $972,500 |
| Couple | $481,500 | $1,074,000 | $739,000 | $1,332,000 |
Income test – 20 September 2025
| Full pension | Cut-off | |
| Single | $218 (per fortnight) | $2,575 (per fortnight) |
| Couple (combined) | $380 (per fortnight) | $3,934 (per fortnight) |
Deeming rates
Starting 20 September 2025, deeming rates will rise. The lower rate, applicable to financial assets up to $64,200 for singles or $106,200 for couples, will increase from 0.25% to 0.75%. The rate for assets above these thresholds will rise from 2.25% to 2.75%.
Institute of Financial Professionals Australia (IFPA) Comment
The rise in rates and thresholds could result in clients being eligible for a higher Centrelink benefit or qualifying for a benefit, such as the Age Pension, that they were previously ineligible for. This is an ideal time to review clients’ entitlements and adjust their projected cash flow accordingly.