Every quarter the Australian Taxation Office (ATO) shares their areas of focus when it comes to small businesses meeting their tax and superannuation obligations. These insights help businesses remain compliant with tax obligations and avoid costly penalties. As we enter the final quarter of the 2024/25 financial year, the ATO has announced three key focus areas for small business owners to be aware of. These include undeclared contractor income, suggested changes in GST reporting frequency and compliance with small business boost measures. Staying informed and aligned with the ATO small business focus areas can help you avoid ATO scrutiny and maintain good standing with the tax office.

Here are the ATO small business focus areas for Q4 of FY 2024/25:

1. Contractors Omitting Income

As part of the taxable payments reporting system (TPRS), businesses must report payments made to contractors for providing the following services.

• building and construction
• courier
• cleaning
• information technology (IT)
• road freight
• security, investigation or surveillance.

If you work as a contractor and provide any of these services, the business you contract to will report those payments to the ATO on their TPAR and you need to include this income on your tax return. Contractors need to be aware that the ATO is using sophisticated data matching techniques to identify contractors reported through the TPRS. This quarter, the ATO will be increasing its scrutiny on contractors who:

• Accept cash payments without reporting the income.
• Fail to include earnings from platforms or digital marketplaces.
• Do not report all contract work, particularly in industries like construction, cleaning, and ride-sharing.

To remain compliant, contractors should ensure all income is accurately declared in their small business tax returns. The ATO uses data-matching technology to detect discrepancies between reported income and what is actually received.

2. Quarterly to Monthly GST Reporting

From March 2025, the ATO is encouraging more small businesses to transition from quarterly to monthly BAS (Business Activity Statement) reporting for GST purposes. If you have a history of failing to comply with your tax and GST obligations you may receive communication from the ATO notifying you of your new monthly reporting cycle effective from 1 April 2025. You are more likely to be migrated to the new reporting cycle if you have not responded to previous communications from the tax office and demonstrate a poor compliance history, for example:

• paying late or not paying the amount due
• not lodging or lodging late
• reporting your tax obligations incorrectly.

The aim is to help businesses:

• Stay on top of their tax obligations.
• Improve cash flow by receiving GST refunds sooner.
• Develop better financial discipline and forecasting.

While not mandatory for all small businesses, monthly GST reporting is highly recommended for businesses that frequently receive GST refunds or are struggling with quarterly reporting accuracy. The ATO is focusing on educating and assisting businesses with this transition during Q4.

If you’re considering switching to monthly GST reporting, speak with your accountant or advisor to determine if it’s the right move for your business.

3. Small Business Boost Measures

The ATO continues to monitor compliance with the recently introduced small business boost measures, which were designed to support digital adoption and skill development. These include:

• The Small Business Technology Investment Boost, which allows eligible businesses to claim an additional 20% tax deduction on expenses that support digitising your operations.
• The Small Business Skills and Training Boost, which provides a 20% tax deduction for eligible training expenses.

The ATO is actively reviewing claims to ensure they meet eligibility requirements. Key risks include:

• Claiming ineligible or unrelated expenses.
• Not retaining sufficient documentation to support deductions.
• Misinterpreting the eligibility timeframes or criteria.

Among the main errors being reported for the Skills & Training Boost program include:

• claiming when you are not in business, or your aggregated turnover is over $50 million
• claiming for training where the person is not an employee of your business
• sole traders claiming the boost deduction for expenditure on training for themselves
• claiming more than the additional 20% deduction for eligible employee training expenditure
• claiming when training is not provided by a registered training provider.

To remain compliant, ensure your claims are accurate, well-documented, and within the guidelines set out by the ATO.

The ATO will also continue to focus on non-commercial business losses, small business capital gains tax (CGT) concessions, business income is not personal income and GST registration and income of taxi, limousine and ride-sourcing services.

Stay Ahead with Expert Guidance

Staying compliant with ATO small business benchmarks and requirements doesn’t need to be overwhelming. By understanding the ATO’s focus areas and keeping your tax records and obligations in check, you can reduce risk and focus on growing your business.

At MGI South Qld, we help small businesses stay on top of their tax administration and compliance requirements. If you’re unsure about your income declarations, GST reporting obligations or small business boost claims, our team is here to support you.

Contact us today to stay ahead of ATO updates and ensure your business remains compliant for Q4 and beyond.

The general transfer balance cap is set to increase to $2 million on 1 July 2025, following the release of quarterly CPI data.

With all groups CPI figure reaching 139.4 for the December 2024 quarter, the general transfer balance cap will be indexed for the 2025–26 year, increasing to $2 million from $1.9 million.

The cap limits the amount of money that can be transferred into the retirement phase in super. The increase means clients commencing their first retirement phase income stream in 2025–26 will start with a personal transfer balance cap of $2 million.

Clients who already have a personal transfer balance cap that they have not fully utilised at any time in the past will see their cap increase on 1 July 2025 by a smaller amount due to proportional indexation.

This increase also affects other superannuation rules and concessions including the total superannuation balance, which will also increase to $2 million.

A member’s total super balance at 30 June 2025 will need to be less than $2 million for them to access the standard non-concessional contributions cap.

The 3-year bring forward rule will be limited against a higher Total Superannuation Balance as per below:

To 30 June 2025

From 1 July 2025

If you have any queries or concerns or need further advice and support about superannuation changes please don’t hesitate to reach out to the team at MGI.

Small businesses, primary producers and not-for-profits impacted by ex-Tropical Cyclone Alfred in South East Queensland can now apply for disaster assistance loans to support their recovery.

Tropical Cyclone Alfred – Exceptional Disaster Assistance Recovery Grants are available to assist directly impacted primary producers, small businesses and non profit organisations with the costs of clean-up and reinstatement.

Disaster recovery grants are now available to primary producers, small business and not-for-profits in 16 local government areas that were impacted by ex-Tropical Cyclone Alfred.

These grants will fund up to $25,000 for clean-up and return to operation costs, including:

• debris removal
• replacing damaged equipment
• building repairs
• safety inspections
• restocking and replanting

For more information on these points below and to apply click here: Disaster Assistance Recovery Grants

• What assistance is available
• How to apply
• How can the assistance help you
• Eligibility criteria
• Defined disaster areas
• What documents do you need
• How to apply

Queensland Rural and Industry Development Authority has opened applications for:

• Concessional loans to help with re-establishing normal operations.
• Essential Working Capital loans to provide assistance with essential working capital for expenses

Disaster Assistance Loans up to $250,000 and Essential Working Capital Loans up to $100,000 are available to eligible operators.

Loans can be used to repair damaged assets, restock supplies, and for the costs of sustaining operations and have been activated for eligible operators across the Local Government Areas of Brisbane, Bundaberg, Fraser Coast, Gold Coast, Gympie, Ipswich, Lockyer Valley, Logan, Moreton Bay, Noosa, Redland, Scenic Rim, Somerset, Southern Downs, Sunshine Coast, and Toowoomba.

• Disaster Assistance Loans up to $250,000 for eligible small businesses and primary producers and up to $100,000 for eligible not-for-profits will cover the repair or replacement of damaged equipment and infrastructure, and restocking.
• Essential Working Capital Loans up to $100,000 are available to help business operations continue, including paying salaries or wages, creditors, rent or rates.
• Freight subsidies up to $5,000 are also available to impacted primary producers to move stock or produce, or to have essential supplies deli

Concessional loans are available provided that certain criteria are met. For further information regarding what assistance is available, loan amounts, terms, interest rates, eligibility and how to apply, visit the QRIDA website.

The links allow you to toggle for criteria for each industry e.g. Primary Producers, Small Business and Not-for-profit organisations.

Should you have any questions or wish to discuss this matter further, please do not hesitate to contact the team at MGI.

Not for profit entities that aren’t registered charities are now required to complete an annual Not For Profit Self Review return.

Lodgement Date Update – Not-for-profit (NFP) reporting requirements for self-assessed income tax exemption

The NFP self-review return due date is approaching. For all NFP’s who have yet to lodge a return with a 30 June 2024 year end the new lodgement date is 31 March 2025.

Non-charitable NFPs with an active Australian business number (ABN) must lodge the return to confirm their eligibility for income tax exemption.

However, an entity that has a different year end date, will need to apply to the ATO to adopt a Substituted Accounting Period (SAP) and be approved.

SAPs may be granted to NFPs where they can demonstrate that an ongoing event, industry practice, business driver or other ongoing circumstance makes 30 June an inappropriate or impractical balance date.

For more information on lodgement due dates and substituted accounting periods please see link: ATO Lodgement Dates

Who will need to lodge? 

Various categories of NFPs will not be included in the new return and will not have a lodgement obligation.

However, if your NFP falls into the below category it will need to self-assess and lodge a return with the ATO:

• Community service organisations
• Cultural organisations
• Educational organisations
• Health organisations
• Employment organisations
• Resource development organisations
• Scientific organisations
• Sporting organisations

Any NFP’s who do not meet the above categories but are either one of the following are considered exempt from lodging the return:

• Government entities
• Taxable not-for-profits
• NFPs with only charitable purposes
• Non-profit sub-entities for GST purposes

What changed for not for profit organisations in 2024? 

The not-for-profit (NFP) self-review reporting is arguably the largest change in this sector since the establishment of the Australian Charities and Not-for-Profit Commission (ACNC) in late 2012. It is important to note that no changes have been made to the legislation allowing entities to self-assess their income tax exempt status. Every organisation that has been appropriately self-assessing its status the Income Tax Assessment Act 1997 will remain eligible to self-assess for the income tax exemption from 1 July 2024.

The new requirement asks these organisations to formally report the specific basis of their assessment, by reference to the category of organisation and the specific eligibility criteria that apply to that category.

It has always been a requirement that these organisations review their eligibility to self-assess for the income tax exemption on an ongoing basis and now it will be a requirement that this assessment is lodged with the Australian Taxation Office (ATO).

We note that there is no requirement to provide detailed financial information outside of disclosing a revenue band into which the organisation falls, which allows the population to be dissected on the basis of size in the future.

How will an organisation know if they need to lodge? 

For those organisations already identified by the ATO, the return will be automatically generated. It will show on the entity’s ‘For action’ page in Online services for business (OSB), which may help identify the requirement for some organisations that lodge periodic activity statements via this method. Tax or BAS agents who assist with meeting GST obligations may be well-placed to identify.

Call to Action

As the Not For Profit self review return reporting regime is relatively new, we would suggest the following actions:

1. Contact the NFP accounting specialists in our Business Services Team to discuss the matter.
2. Allow us to review your reporting obligations and notify you whether you meet the requirements of having to lodge a return and if there is the potential of the organisation meeting a taxable outcome.
3. If you are considered a reporting entity, we would highly suggest that you allow our office to prepare and finalise this return.

Should you have any questions or wish to discuss this matter further, please do not hesitate to contact our office.

In October, MGI staff were proud to support Stepping Stone – one of our valued Not-for-profit clients.

Stepping Stone is a community-based organisation that addresses the serious impact of mental illness giving its members opportunities to grow with friendships, employment, education affordable housing and providing access to the services and supports they need.

Our team including Antonio, Ella and Amy got the opportunity to sit in on the daily task meetings and volunteer to help out in the Café and Kitchen to prepare meals for up to 40 staff and community members. It was a great opportunity to see first-hand, the great work Stepping Stone is doing for its community members at the Coorparoo Clubhouse. With some of our staff also local to Coorparoo, it was a great way for us to ‘give back’ and support this fantastic organisation.

Made in Queensland (MIQ) is a $121.5 million Queensland Government program helping small and medium sized manufacturers to increase international competitiveness, productivity and innovation, and to generate high-skilled jobs for the future. MIQ supports traditional manufacturers to adopt industry leading equipment, technologies, systems and processes.

Applicant guidelines for Made in Queensland round 7 are now available and the online application form is open. Applications will close at 1.00pm on Friday 24 January 2025.

Queensland-based manufacturers looking to adopt industry leading equipment, technologies, systems and processes that include energy efficiency, export, reshoring, supply chain improvements, sustainability and/or advancement of decarbonisation and net zero outcomes are encouraged to apply for matched funding grants of $50,000 to $2.5 million.

In Round 7, up to $2.5 million (excluding GST) of available funding has been set aside for applications which do not involve the purchase of equipment (see Section 2.3.3) and are seeking less than $250,000 (excluding GST) each in funding. These applications will proceed through the same two-stage competitive selection process as all other applications

Successful MIQ applicants will be required to execute a funding agreement with the Queensland Government. An example funding agreement is provided below for information purposes.

MIQ – Round 7 Funding eligibility and application guidelines

Please contact the team at MGI if you have any questions or need assistance in your application.

Round 2 of the Manufacturing Energy Efficiency Grant Program is now open.

The Manufacturing Energy Efficiency Grant (MEEG) Program is a $7.1 million Queensland Government program helping the manufacturing sector to increase their competitiveness in a low carbon future by implementing energy efficiency measures that reduce energy costs and operational emissions.

Applicants should allow up to 12 weeks from submission for assessment of the application.

Queensland-based manufacturers looking to increase energy efficiency measures and technology, reduce energy usage and costs, reduce emissions and increase awareness of energy use are encouraged to apply for grants of up to $50,000. The applicant guidelines provide the full details including eligibility and assessment criteria.

Applications will close on 30 June 2025 or when all funding for this round is allocated.

Round 2 – Manufacturing Energy Efficient Grant Guidelines and Submission Form

Please contact the team at MGI if you have any questions or need assistance with your application for an energy efficiency grant.

Manufacturing grants are available through the Manufacturing Grants Hub Program (MHGP) to assist eligible businesses in the Cairns, Central Queensland, Gold Coast, Mackay and Townsville regions.

These grants are an opportunity for manufacturers to become more productive, build advanced manufacturing capabilities and create the jobs of the future through:

• technology adoption
• skills and training
• business development
• advanced robotic manufacturing hub services.

Grants between $10,000 and $500,000 are available for eligible manufacturing small to medium enterprises.

The Program (MHGP) supports the growth of Queensland’s regional manufacturing industry by helping small to medium enterprises (SMEs) build their advanced manufacturing capabilities.

The program helps regional manufacturing SMEs to:

• improve productivity by building international competitiveness, generating jobs and stimulating private sector investment
• adopt new technologies in equipment, robotics, processes, systems, software, data use and analytics
• improve energy efficiency and sustainability, and progress energy and carbon footprint management
• create and maintain high performing workplaces through increased management capability, leadership, and the development of skilled employees including advanced manufacturing apprenticeships and traineeships

Round 4 of the MHGP will be open to eligible applicants until 30 June 2025 or until all funding has been allocated.

For more information on how to apply and program guidelines visit the Queensland Government Manufacturing Hub Grant Program website.

If you have any questions or need assistance with your application, please reach out to the team at MGI.

The Lord Mayor’s Women in Business Grant will provide funding to support women-owned businesses to grow and develop. Eligible businesses can apply for a grant of up to $5,000 (excluding GST) to build their business capability and also boost local economic impact.

This Women In Business grant opportunity has already opened and applications close at 4pm on 14 October 2024.

Eligibility Criteria:

• To have an active ABN and be registered in Queensland
• Headquarters/business outlets based in the Brisbane Local Government Area
• Must be an Australian Resident/Citizen
• Must be a woman in business with a minimum of 50% ownership of the business
• Applicants must be 18 year of age (proof of ID) at time of application
• The business needs to be operating/trading for the full financial year of 2023/24
• Not be insolvent or have owners/directors that are an undischarged bankrupt
• Annual turnover between $75,000 and $500,000

More information can be found on the Brisbane Business Hub but don’t hesitate to contact the team at MGI for any assistance.

The Business Basics grant program provides support to businesses to increase core skills and adopt best practice. This round of Business Basics (Round 6) is focused on business enhancement. The program is administered by the Department of Employment, Small Business and Training (DESBT).

This program is applicable for businesses with less than 5 employees and a turnover of less than $300,000. With increased funding to $7500, start planning your registration of interest in the latest round of small business grants, Business Basics.  Applicants can apply for funding for grant funded activities under the following priorities:

• Professional business advice
• Strategic marketing services
• Website build and upgrades.

Opening Date: Registration of Interest (ROI) opens at 9am, Monday 30 September 2024.

Closing Date: Stage 1: Registration of Interest (ROI) closes at 5pm, Friday 11 October 2024

Access to supporting documentation and eligibility criteria is available on the Queensland Government Business website.

Please reach out to the team at MGI, if you need support in preparing your application.