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Why It’s Time to Revisit Your Positive Duty Obligations

With new enforcement powers now in effect, employers can no longer rely on “set and forget” compliance. The Australian Human Rights Commission can investigate your workplace even if no complaint has been made, so every business must show active compliance with the positive duty under the Sex Discrimination Act 1984.

What is the positive duty?

Since December 2022, employers have been required to take reasonable and proportionate steps to eliminate unlawful conduct such as sexual harassment, discrimination, and hostile workplace environments. From December 2023, the Commission gained powers to enforce these obligations directly.

Why revisit now?

• The Commission can initiate investigations without a complaint.

• Applicant law firms are increasingly using gaps in employer compliance in disputes.

• Passive compliance (policies, training once-off) is no longer enough.

Key areas to focus on

1. Leadership
Leaders must set the tone for workplace culture and be actively engaged.
Ask: Are leaders aware of recent incidents? Do they understand their role in prevention and response?

2. Training and communication
Refresher training is essential. One-off sessions lose impact quickly. Pair training with consistent communication so expectations are reinforced.
Ask: Have employees received refresher training in the past 12 months? Are managers reinforcing respectful behaviour in team meetings?

3. Risk assessment
This is not a one-time exercise. Review at least annually, engage with staff, and address emerging risks.
Ask: When was the last review? Are risks like harassment or discrimination being mapped and managed?

4. Policies
Out-of-date policies send the wrong signal. Policies should clearly define unlawful behaviours and outline reporting processes and consequences.
Ask: Does your policy include clear definitions and reporting steps? Is it updated regularly?

5. Reporting processes
Employees must know how to report unlawful conduct, and managers must know how to respond. A trauma-informed, person-centred approach is essential.
Ask: Do staff know who to report to? Are those receiving reports trained to handle them properly?

6. Prevention Plan
A Prevention Plan must be a living document, updated to reflect real risks and feedback from staff. It should cover leadership accountability, training, and measurable actions.
Ask: Has it been updated in the past 6–12 months? Is it actively guiding workplace practice?

Final thought

Positive duty compliance is not a tick-box exercise. It’s a continuous, proactive commitment to safety, respect, and prevention. If the Commission asked tomorrow, could your business show what it has done?

If the answer is no—or even “not sure”—now is the time to act. Get in touch for more support with your Positive Duty Obligations.

Deadline Approaching: Register Your Trading Name Before 31 October

In just a few months, unregistered business names will be wiped from ABN Lookup.

If you’re trading under a business name that’s not officially registered with ASIC, changes are coming that could affect your credibility, payments, and client trust.

From 1 November 2025, all unregistered trading names will be removed from ABN Lookup. That means if your business name isn’t registered, it will no longer appear in the public record used to confirm your GST status and business identity.

This is the final step in a long-planned phase-out that began in 2012, when the national Business Name Register was launched to improve transparency and legal certainty.

What is a trading name?

A trading name is any name you use to run your business that isn’t your legal name.

For example:

• A sole trader named Tom Jones trading as Tom Jones Plumbing

• A company called Bright Ideas Pty Ltd trading as Bright Tech Solutions

If you haven’t registered this trading name with ASIC, it will disappear from ABN Lookup on 1 November.

What’s changing on ABN Lookup?

From 1 November 2025, ABN Lookup will only show:

• Your legal name (the name on your ABN or company registration)

• Your GST registration status

• Any business names registered with ASIC

If your trading name is not registered, it will be removed and will no longer appear publicly.

Why it matters

Clients, suppliers, and government agencies use ABN Lookup to:

• Confirm your business identity

• Check your GST registration

• Match your invoices to your ABN

If your name doesn’t show up:

• You risk losing the legal right to use the name if someone else registers it first.

• Clients may delay or withhold payment

• They may be unable to claim GST input tax credits

• Your business could appear non-compliant or untrustworthy

What you need to do now

Review your trading name(s)
If you’re operating under any name other than your legal name, check whether it’s already registered.

Register your trading name with ASIC
Visit asic.gov.au to register your business name. It’s a simple process that protects your business.

Check your ABN details
Make sure your registered name is linked correctly and that your GST status is accurate.

Need help reviewing your business name or getting registered?
We can assist with reviewing your current setup, registering your trading name with ASIC, and making sure your ABN records are up to date. Get in touch now to avoid last-minute issues.

Beware the 47% Tax Trap: Family Trust Distribution Pitfalls Explained

Family trust elections (FTE) can unlock valuable tax concessions – but one misstep could see you hit with a 47% tax bill.

Why Family Trust Elections Matter

Family trust elections (FTE) allow trusts to access certain tax concessions. However, they come with a major risk: triggering the family trust distributions tax (FTDT), which is levied at 47% (top marginal tax rate plus Medicare levy).

Complex Rules can Mean Costly Mistakes

“FTE and FTDT provisions are complex, poorly understood, and can lead to significant tax pitfalls for family businesses and private groups,”
– Nitin Saby, tax advisor and former ATO director

Key complexities include:

• Choosing a ‘test individual’, whose family group defines who can receive distributions.

• Using ATO-approved forms precisely, including elections, revocations, or variations.

Who Counts as ‘Family’?

Under an FTE:

• Distributions can only go to the test individual’s family group.

• The family group includes their spouse, parents, grandparents, siblings, and any companies, trusts, or partnerships where family group members hold fixed interests.

Distributing outside this group triggers FTDT at 47%.

Common Triggers for Family Trust Distribution Tax

• Distributions to non-family group members (via payments, credits, loans, or transfers).

• Poor record-keeping or unclear beneficiary registers.

• Complex family structures or succession issues, especially if the test individual dies and trusts aren’t updated.

ATO Scrutiny is Increasing

“There is a clear trend of the ATO targeting high-net-worth and multi-generational private groups for FTDT compliance,”
– Nitin Saby

This is especially true for longstanding structures involving generational wealth transfers.

How to Stay Compliant

• Carefully considering all implications before making an FTE.
• Maintaining meticulous record-keeping.
• Reviewing trust deeds regularly.
  Seeking professional advice frequently.
• Monitoring legislative and case law changes.

Who Should Receive This Year’s Trust Distributions?

When it comes to trusts, timing is everything.

Under tax law, beneficiaries must be entitled to their share of the trust’s income by 30 June, even though you may not yet know the final income figure.

That means you need to decide who gets what before the numbers are finalised.

Why it matters before 30 June

Distributions don’t need to be paid out immediately, but once you resolve to distribute trust income to someone, they become liable for the tax — regardless of whether they’ve actually received the funds.

That’s why it’s critical to speak with your accountant before year-end. We can help you:

• Estimate the likely trust income and capital gains

• Plan how to distribute it in the most effective way

• Avoid decisions that trigger unnecessary tax or compliance issues

Thinking of distributing to low-income family members?

On paper, distributing income to low-tax-bracket family members sounds smart. But recent ATO rulings have cracked down on this strategy.

To claim their lower tax rate, the beneficiary must receive a genuine economic benefit. That means:

• If your 18-year-old son is allocated $100,000, you need to show how he actually benefited.

• Simply allocating income for tax minimisation purposes — without any real transfer of benefit — won’t hold up under scrutiny.

Makes sure you consider connected entity status

Distributing to someone also makes them a connected entity of the trust for four years.

This may not be an issue now, but it can:

• Affect your eligibility for small business tax concessions

• Have a significant impact if you plan to sell a business or restructure in the near future

Get in touch before 30 June and we’ll help you make confident, compliant decisions about this year’s trust distributions.

Tax Time 2025: Air Fryers, Yachts, and Other Deduction Fails

As tax time approaches, the ATO has shared a list of deduction attempts that definitely didn’t pass the test.

If you’ve ever wondered where the line is between legitimate and laughable tax claims, here’s your answer. The ATO is reminding all taxpayers: if your claim wouldn’t pass the “pub test,” it probably won’t pass with them either.

What You Can’t Claim (No Matter How Creative You Are)

Over the years, the ATO has seen some wild claims, including:

• A mechanic trying to deduct an air fryer, microwave, vacuum cleaners, a gaming console, and TV — all denied as personal expenses

• A truck driver who claimed swimwear, arguing they needed it for a roadside swim during hot transit days

• A fashion industry manager who attempted to write off over $10,000 in designer clothes to “stay well-presented” at events

All were rejected. Why? They were personal in nature and not directly tied to earning income.

🔎 The ATO’s 2025 Focus Areas

This year, the ATO will be paying close attention to:

• Work-related expenses

• Working-from-home deductions

• Multiple income streams (including side hustles and gig work)

ATO Assistant Commissioner Robert Thomson says it simply:

“If it doesn’t pass the pub test — it’s probably not deductible.”

📌 Reminder: What Makes an Expense Deductible?

To claim a work-related deduction, you must be able to show:

• A direct connection to earning income

• Proof you spent the money (receipts, invoices, records)

• You weren’t reimbursed by your employer

Personal expenses like commuting, childcare, and general clothing don’t qualify — even if they help you “feel productive.”

🏠 Working From Home Deductions: Two Options

The ATO has clarified the two ways you can claim working-from-home expenses:

1. Fixed Rate Method

• Claim 70¢ per hour worked from home

• Covers internet, electricity, phone, and stationery

• Requires a record of hours worked

2. Actual Cost Method

• Claim actual costs incurred, backed by receipts

• You’ll need to calculate work-related use of each item

• More accurate but more admin

Declaring All Income Is a Must

Got a side hustle? Sell services through an app? Provide rideshare or freelance work?
You’ll need to declare every source of income in your return.

“Each income stream may come with different eligible deductions — but only if declared,” says Thomson.

Real Claims from the Wild Side

Even outside the ATO, tax agents have seen some “creative accounting”:

• A family tropical island holiday labeled a business trip

• A luxury yacht claimed “in case business came up on the islands”

Chartered Accountants ANZ were clear:

“The ATO will not be laughing. Dubious claims aren’t worth the risk.”

Need Help Getting It Right?

If you’re unsure whether an expense qualifies, don’t guess — penalties and interest apply if you’re wrong. You’re better off to check with us than getting hit with a fine later. 

Government unveils draft legislation for payday super

Overview of the Reforms:

The Australian Government, through Assistant Treasurer and Minister for Financial Services Stephen Jones, has released draft legislation aimed at addressing the billions of dollars in unpaid superannuation each year. The reforms, which will take effect from 1 July 2026, will require employers to pay employees’ superannuation at the same time as their salary and wages.

Key Changes in the Legislation:

• Introduction of ‘Qualifying Earnings’: The proposed legislation introduces a new term, qualifying earnings. This refers to the earnings on which individual Superannuation Guarantee (SG) contributions are calculated.

  • Qualifying earnings will include:

    • Ordinary Time Earnings (OTE) as defined under the current SG framework.

    • Sacrificed OTE in exchange for additional superannuation contributions through salary sacrifice arrangements.

    • Payments considered part of ‘salary or wages’ under the existing law for superannuation purposes.

• New ‘QE Day’: The day that qualifying earnings are paid to an employee will be known as a QE day under the new rules.

Super Contributions and Payment Deadlines:

• Employers will be required to ensure super contributions are received by the superannuation fund within seven days from the day the employee is paid their qualifying earnings.

• SG Charge Calculation: The amendments also recalibrate the SG charge, making it more precise to ensure employees are compensated for lost earnings due to delayed contributions. This change will also include a late payment penalty if the SG charge remains unpaid after the specified period.

What This Means for Employers:

• Simplified Payroll: Employers will now pay super at the same time as salary and wages, simplifying the process and ensuring better compliance with superannuation obligations.

• Increased Penalties: Employers who fail to pay the SG charge on time will face more significant consequences, including penalties for late or missed payments, encouraging prompt action on late contributions.

Benefits for Employees:

• Real-Time Super Growth: The new system will allow more than three million workers to see their superannuation grow in real-time, alongside their wages, reducing the chances of lost super.

• Improved Retirement Outcomes: Employees will benefit from compounding investment returns due to more frequent super contributions. A 25-year-old median income earner could be $6,000 better off at retirement, or 1.5% better off, compared to the current quarterly payment system.

Consultation and Timeline:

• The government is inviting public submissions on the draft legislation, with consultation closing on 11 April 2025.

• The reforms are scheduled to take effect on 1 July 2026.

Industry Reaction:

• ASFA’s Support: Mary Delahunty, CEO of the Australian Superannuation Funds Association (ASFA), welcomed the draft legislation, stating that payday super would help employees build their superannuation in real-time, reducing lost super and improving retirement outcomes.

  “Payday super means over three million workers will see their super build in real-time, alongside their wages,” said Delahunty.
  “It will mean less lost super and better outcomes in preparation for retirement.”

• Commitment to Successful Implementation: ASFA emphasized its commitment to ensuring payday super is implemented smoothly and delivers long-term benefits for Australian workers’ retirement savings.

Next Steps for Implementation:

• ASFA has pledged to engage in the Treasury consultation process and work through the details to ensure the reforms are implemented successfully by 1 July 2026.

What Business Owners Need to Do Now:

1. Prepare for Payment Changes

• From 1 July 2026, super will need to be paid at the same time as wages. Update your payroll system to track qualifying earnings and ensure timely super payments.

2. Review Payroll Systems

• Ensure your payroll can calculate qualifying earnings and handle the new super payment requirements. Work with your accountant or bookkeeper to make necessary updates.

3. Plan to avoid Penalties

• There will be stricter penalties for late super payments. Review your current practices to ensure super is paid on time and avoid these penalties.

4. Manage Cash Flow

• Super will be paid alongside wages, so adjust your cash flow planning accordingly to avoid any disruptions.

5. Stay Informed

• Keep up with the draft legislation and consider submitting feedback before 11 April 2025. Be prepared for any further updates as the legislation moves forward.

6. Communicate with Employees

• Inform your staff about the upcoming changes so they’re aware of how super payments will be made more frequently.

Tax Administration 3.0: Plans for Digital Changes to Reduce Your Compliance Burden

In a move to prevent debt, reduce cost and compliance burdens and ensure businesses have certainty that they’re meeting their tax obligations correctly, The ATO is continuing to develop its “Tax Administration 3.0” initiative. 

Plans to move towards a more digitised future include:

• Encouraging more frequent reporting of tax obligations
• Developing digital solutions to help identify and address errors before lodgement
• Improving the use of third-party data to support compliance
• Streamlining the tax payment experience
• Easier calculation of PAYG installment through software integration

With the ATO actively engaging with the accounting and tax profession to design the future digital tax experience, Michael Morton, Assistant Commissioner at the ATO, emphasised that this transition will be gradual, describing it as a “multi-step, multi-journey approach requiring incremental advancements and continual adaptation.”

The ATO is currently seeking ideas from small businesses and tax professionals about how digital tools could improve record-keeping practices and help navigate tax complexities. Morton encourages businesses and advisors to share thoughts with professional associations or contact the ATO directly.

Electric Vehicle Fleet Funding: Government Incentives Available

The NSW Government is offering funding to help businesses switch to electric vehicles. While their competitive bid round has now closed, their kick-start funding program remains open for applications.

Current Status

• Kick-start funding: OPEN until June 30, 2025 (or until funds run out)
• All evidence must be submitted by June 10, 2025

Are You Eligible?

Your business needs to:

• Operate a fleet of at least 3 vehicles
• Be able to purchase and register vehicles before June 10, 2025

Available Kick-start Funding

Vehicle incentives:

• Small vehicles (under $40,000): $5,000 per vehicle
• Premium vehicles (over $40,000): $7,000 per vehicle
• Commercial vans/utes (2.5-4.5t): $14,000 per vehicle
• Trucks (up to 4.5t): $20,000 per vehicle

Plus charger funding:

• AC smart charger: $4,000 per port
• DC smart charger: $8,000 per port (commercial vehicles only)

Business Benefits

• Save approximately $3,100 in running costs per vehicle annually
• Reduced maintenance costs compared to petrol vehicles
• Support your sustainability goals
• Improved vehicle performance

How to Apply

Visit the NSW Government Energy website to:

1. Complete the eligibility check
2. Review the kick-start funding guidelines
3. Submit your application

For full program details and to apply, visit the NSW Government Energy website or contact us for assistance with your application.

Director Liability for a Company – How Does it Work?

As a director, your responsibilities don’t end when your company ceases trading. Even after a business stops operating or is deregistered, you may still be personally liable for certain obligations. This includes situations where the company has debts or becomes insolvent.

If a company is insolvent—meaning it can’t pay its debts as they fall due—directors can be held accountable. Signs of insolvency often include low cash flow, delayed payments, and legal action from creditors. Directors are legally required to assess the company’s financial position regularly to determine if insolvency is a risk. Failing to take timely action can lead to personal liability for unpaid debts.

Directors can also face personal liability for company losses if they breach their duties. This could lead to civil penalties, criminal charges, or even disqualification from managing companies in the future. Breaching director duties includes failing to act in the company’s best interests or not meeting the required financial obligations.

Under the Director Penalty Regime, directors may be held responsible for unpaid taxes, particularly PAYG withholding and the Superannuation Guarantee Charge. This means that even tax debts can fall on directors personally if not addressed by the company.

Additionally, if directors have provided personal guarantees for company loans, they may be liable to repay those loans if the company defaults. Personal assets, such as a home, could be at risk if the company fails to meet its financial obligations.

In cases where the company acts as a trustee, directors may also be liable for any breaches of trust or if the company acts beyond its powers.

Finally, directors involved in illegal phoenix activity—transferring assets to a new company to avoid paying debts of an old one—may face severe legal consequences, including personal liability and criminal charges.

In short, being a director comes with ongoing responsibilities, and personal liability can extend far beyond the active life of a business. Understanding these obligations is crucial to protecting yourself and your assets. If you’re unsure about the extent of your liabilities as a director or need specific advice tailored to your situation, please don’t hesitate to contact us. Our team is here to help ensure you’re well-informed and protected in your role.

Strategic Planning tips for growth in 2025

As the end of the calendar year approaches, it’s the perfect time to reflect on your business’s progress and set the stage for growth. Strategic planning is essential to ensure your business thrives in the coming year.

Whether you aim to expand your customer base, increase revenue, or streamline operations, here are some key tips to help you get started.

Budgeting for the Year Ahead

A well-structured budget is the foundation of your business’s financial health. Start off by reviewing your current financial statements to understand where your money is going. Look for areas where you can cut costs without compromising quality or efficiency.

Consider forecasting your revenue for the year ahead, considering any anticipated market changes or business developments. This will help you set realistic financial goals and allocate resources effectively.

Don’t forget to create flexibility for unexpected expenses or potential opportunities.

Reviewing and Optimising Operations

Taking a closer look at your day-to-day operations can reveal opportunities for efficiency improvements. Start by evaluating your current processes—are any bottlenecks or outdated practices slowing you down?

Consider investing in technology or tools that can automate routine tasks, freeing up your time to focus on strategic initiatives. Review your supply chain and vendor relationships to ensure you’re getting the best value and service.

Setting Clear and Achievable Goals

Goal setting is crucial for driving your business forward. Begin by assessing what you’ve achieved this year and identifying areas for improvement. Your goals should be specific, measurable, achievable, relevant, and time-bound (also known as SMART goals).

For example, instead of setting a vague goal like “increase sales,” aim for something more precise like “increase sales by 15% in the first quarter by expanding our online presence.” This approach gives you a clear target to work towards and a way to measure success.

Engaging Your Teams

Your team plays a vital role in your business’s success. As you plan for the New Year, involve your employees in goal-setting. This fosters a sense of ownership and ensures that everyone is aligned with the company’s vision.

Provide opportunities for professional development and encourage open communication to keep your team motivated and engaged. A committed and skilled workforce is one of your most valuable assets.

Monitoring Progress and Adjusting Plans

Once your plan is in place, it’s essential to monitor your progress regularly. Set a schedule for reviewing your financials, goals, and operational metrics. If things aren’t going as planned, be prepared to make adjustments.

Flexibility is crucial in navigating the challenges and opportunities that the new calendar year will bring.

The new year is a fresh start and an opportunity to set your business on a path to success.

By budgeting wisely, setting clear goals, optimising operations, engaging your team, and staying flexible, you’ll be well-positioned to achieve your business objectives. Take the time to plan strategically now, and you’ll reap the rewards in the coming months.