Category: Tax Return

Every company registered in Australia must lodge a company tax return each year, whether it traded, made a loss or sat dormant. The return works differently from an individual’s: the company pays tax at a flat rate, assesses itself, and has its own set of due dates. This guide covers the company tax return due date for 2026-27 lodgements, the current company tax rates and what needs to be in order before the return is prepared.

Company tax rates

Company type	Tax rate
Base rate entity: aggregated turnover under $50 million and no more than 80% of income is passive (rent, interest, dividends, royalties, net capital gains)	25%
All other companies	30%

Most trading companies in Melbourne’s west are base rate entities and pay 25%. A company that mainly holds investments usually fails the passive income test and pays 30%. The rate also sets the franking rate on dividends the company pays, so getting it wrong flows through to shareholders’ returns.

When the company tax return is due

Situation (30 June balancer)	Lodgement due
Company lodges its own return	28 February after the end of the financial year
Lodged through a registered tax agent (most small companies)	15 May after the end of the financial year
One or more prior year returns were outstanding at 30 June	31 October
Total income over $2 million in the prior year	31 March
Large or medium taxpayer (prior year taxable)	31 January, with payment due 1 December

Companies are full self-assessment taxpayers, so the tax is due on the same day as the return for the 28 February, 31 March and 15 May dates. Small companies lodging through an agent whose current and prior year returns are non-taxable or produce a refund have until 5 June under an ATO concession, but the 15 May date is still the official due date. A company must be on an agent’s client list by 31 October to get the agent due dates.

PAYG instalments

Once a company has lodged a return showing tax payable, the ATO puts it into the pay as you go instalment system. The company then pays tax in advance each quarter (or annually for very small amounts) on its activity statement, and the instalments are credited against the final assessment. Instalments can be varied down if profit has fallen, but a variation that leaves the company more than 15% short attracts an interest charge.

What the return needs

• Financial statements for the year, reconciled to the bank, with debtors, creditors, stock and fixed assets supported
• A tax reconciliation: accounting profit adjusted for non-deductible items, depreciation differences, prepayments and the instant asset write-off
• Loans to and from directors and shareholders, reviewed for Division 7A
• Dividends paid during the year and the franking account balance
• Wages, super and contractor payments reconciled to Single Touch Payroll and the taxable payments annual report where it applies
• Losses carried forward and whether the company still passes the continuity of ownership or business continuity test to use them
• Director details, shareholder details and the registered office, which must match ASIC’s records

Common mistakes

• Treating a dormant company as not needing a return. It still must lodge, or formally advise the ATO that a return is not necessary
• Applying the 25% rate to a company that earns mostly rent or interest
• Paying personal expenses from the company and leaving them in a loan account at year end
• Forgetting the ASIC annual review fee and solvency resolution, which are separate from the tax return
• Lodging late. Failure to lodge penalties for companies are higher than for individuals and increase with the size of the entity

Frequently asked questions

Does a company get the tax-free threshold?

No. Companies pay tax on every dollar of taxable income at their flat rate. The tax-free threshold applies only to individuals.

Can a company carry a loss back?

The temporary loss carry back measure ended with the 2022-23 year. Losses are now carried forward and offset against future profits, subject to the ownership and business continuity tests.

When is the company tax actually paid?

For most small companies, any balance after PAYG instalments is due on the return’s due date: 28 February if self lodged or 15 May through an agent. The ATO issues a notice of assessment but the payment date is not tied to it.

Company tax returns in Melbourne’s west

Kennedy Tax & Business Services prepares financial statements and tax returns for companies across Footscray, Williams Landing and Melbourne’s west, along with BAS lodgement, company set-up and ASIC compliance. Contact us before 31 October to be added to our lodgement program.

This article is general information only and does not take into account your personal circumstances. Due dates are from the ATO lodgement program for 30 June balancers and can differ for individual companies. Speak to a registered tax agent before acting.

If you run your business through a company and have ever taken money out of it that was not salary or a dividend, Division 7A applies to you. It is the most common problem we find when a new business client brings in their books. This guide explains what a Division 7A loan is, the 2026-27 benchmark interest rate, how a complying loan agreement works, and how to fix a problem before the ATO finds it.

What Division 7A does

A private company’s profits are taxed at the company rate (25% for most small companies). If a shareholder or their associate could simply take that money out as a loan, they would avoid paying personal tax on it. Division 7A of the Income Tax Assessment Act 1936 stops this by treating certain payments, loans and forgiven debts from a private company to a shareholder or associate as an unfranked dividend, taxable in the hands of the recipient at their marginal rate, with no franking credit for the tax the company already paid.

Associates include spouses, children, family trusts and other companies the shareholder controls. The rules also catch a company’s unpaid distributions from a trust in some circumstances, and loans made through an interposed entity.

Common situations that trigger it

• Drawing money from the company account for personal expenses and recording it as a “director’s loan”
• The company paying a private bill, such as a home mortgage, car or holiday
• Using a company-owned asset, such as a boat or holiday house, for free
• The company lending money to a family trust or a related company that then pays it to the shareholder
• Writing off or forgiving a debt owed by a shareholder

How to avoid a deemed dividend

A loan does not become a deemed dividend if, before the company’s lodgement day (the earlier of the due date and the actual lodgement date of the company’s tax return for that year), it is either repaid in full or put under a complying written loan agreement. A complying agreement must:

• Be in writing and signed before the lodgement day
• Charge interest at or above the ATO benchmark rate for each year
• Have a maximum term of 7 years for an unsecured loan, or 25 years if secured by a registered mortgage over real property worth at least 110% of the loan
• Require a minimum yearly repayment of principal and interest, worked out with the ATO’s formula, starting in the year after the loan is made

Benchmark interest rate

Income year	Division 7A benchmark rate
2026-27	8.77%
2025-26	8.37%
2024-25	8.77%

The rate is set each year from the RBA’s indicator rate for standard variable housing loans. The interest charged on a Division 7A loan is income for the company and, unless the borrowed money was used to produce assessable income, is not deductible to the shareholder. A 7-year loan at 8.77% is expensive money, which is why repaying the loan with a franked dividend is often the better path.

Repaying with a dividend

The most common way to make the minimum yearly repayment is for the company to declare a franked dividend to the shareholder and set it off against the loan balance. The shareholder declares the dividend and the franking credit in their personal return. Repayments made with money that is then re-borrowed from the company do not count. The company also needs enough retained profits and franking credits to do this, which is why year-end planning matters.

Distributable surplus

A deemed dividend is capped at the company’s distributable surplus, broadly its net assets less paid-up capital, measured at the end of the year. A company with little or no retained profit may have a small or nil deemed dividend, but relying on this is risky because the ATO can review the valuation of the company’s assets.

If you already have a problem

Where a loan was not put under a complying agreement in time, the ATO can exercise its discretion to disregard the deemed dividend if the failure was an honest mistake or inadvertent omission and the parties take corrective action, usually by putting a complying agreement in place and catching up the repayments. The request is made in writing with a full explanation, and the chances are much better if you approach the ATO before an audit does.

Frequently asked questions

Does Division 7A apply to a sole trader or partnership?

No. It applies to private companies, and to trusts in limited situations where a company is entitled to a trust distribution that is left unpaid.

What if the company lends money to me and I lend it back?

Repayments funded by new borrowings from the same company are ignored, so the loan balance is treated as never having been repaid.

Can the loan be interest free in the first year?

Interest and the first minimum repayment are required from the income year after the loan is made, so a loan made in 2026-27 needs its first repayment in 2027-28, calculated at that year’s benchmark rate.

Division 7A help in Melbourne’s west

Kennedy Tax & Business Services reviews company and trust accounts for Division 7A exposure, prepares complying loan agreements and dividend documentation, and plans year-end repayments. See our company tax return guide and tax planning and structuring service, or contact our Footscray or Williams Landing office.

This article is general information only and does not take into account your personal circumstances. Benchmark rates are from the ATO. Speak to a registered tax agent before acting.

From 1 July 2026, employers must pay superannuation at the same time as wages, not quarterly. Payday super is the biggest change to employer super obligations since the super guarantee began, and it catches out small businesses that were used to paying super once a quarter from whatever cash was left. This guide explains what has changed, what the ATO now does when super is late, and how to set your business up so nothing is missed.

The new rule in one sentence

Super guarantee contributions must be received by the employee’s super fund within 7 business days of payday. It is not enough to send the payment on day 7; it has to arrive, with enough information for the fund to allocate it to the member. The super guarantee rate itself is unchanged at 12%.

What else changed on 1 July 2026

• Qualifying earnings: super guarantee is now calculated on “qualifying earnings”, a new term that brings together ordinary time earnings, salary sacrifice amounts, commissions and other payments that previously counted for super guarantee purposes
• Small Business Superannuation Clearing House closed: the ATO’s free clearing house closed to new users on 1 October 2025 and shut completely on 30 June 2026. Employers who used it must now pay through payroll software, a commercial clearing house or their default fund’s clearing service
• Super guarantee charge is assessed by the ATO: employers no longer lodge a super guarantee statement. The ATO works out the charge from payroll (Single Touch Payroll) and fund reporting
• The charge is now tax deductible, but it includes daily compounding interest at the general interest charge rate plus an administrative uplift, and penalties of 25% or 50% of the charge can apply
• Exceptions for new employees: a longer deadline applies to the first contribution for a new starter, giving time to collect fund details or request a stapled fund from the ATO

What this means in practice

If you pay staff weekly, you now pay super weekly. If you pay fortnightly, super goes fortnightly. For most small businesses this is a cash flow change more than an administrative one: super that used to sit in the business account for up to four months now leaves with each pay run. Businesses that relied on that float need to re-plan their working capital.

Setting up for payday super

• Use payroll software that pays super automatically with each pay run (Xero, MYOB, QuickBooks and similar all do this). Manual bank transfers to multiple funds will not keep pace with a 7 business day window
• Check fund details for every employee now. A contribution rejected by the fund because of a wrong member number or USI has not been “received” and will be late
• Allow for processing time. Clearing houses and funds can take several business days to process a payment, so paying super on the same day as wages is the safe habit
• Request stapled fund details from the ATO for new employees who do not nominate a fund, before their first pay
• Reconcile monthly. Compare super paid per employee against Single Touch Payroll reporting so any missed or rejected payment is picked up before the ATO does

Who is covered

Every employer with at least one employee entitled to super guarantee, including family businesses paying wages to family members and companies paying directors. Contractors paid mainly for their labour are also entitled to super in many cases, which is a separate trap worth reviewing while you are updating payroll.

Frequently asked questions

Can I still pay super quarterly if I pay it early?

You can pay super in advance for the quarter, as long as every payday’s super has reached the fund within 7 business days of that payday. Paying a lump sum at the end of the quarter no longer complies.

What if the fund rejects a payment?

A rejected or returned contribution has not been received. Fix the details and resend it immediately; if it lands outside the 7 business day window, the super guarantee charge applies to that payday.

Is a late super payment still deductible?

From 1 July 2026 the super guarantee charge is deductible, unlike the old charge. The interest and penalty components still make a late payment far more expensive than paying on time.

Payroll and super support in Melbourne’s west

Kennedy Tax & Business Services runs payroll and super for small businesses across Footscray, Williams Landing and Melbourne’s west through our bookkeeping and BAS services, including moving businesses off the old clearing house onto payroll software. Contact us if your super process has not changed since July.

This article is general information only and does not take into account your personal circumstances. Based on ATO payday super guidance current at October 2026. Speak to a registered tax agent before acting.

After years of one-year extensions, the $20,000 instant asset write-off is now a permanent feature of the tax system for small businesses. From 1 July 2026 a business with turnover under $10 million can immediately deduct the full cost of each eligible asset costing less than $20,000, instead of depreciating it over several years. This guide explains who qualifies, what counts, and how to time purchases to get the most from it.

What changed from 1 July 2026

The $20,000 threshold applied to 2023-24, 2024-25 and 2025-26 under three separate temporary measures, each legislated late in the year it applied to. In the May 2026 Budget the Government announced that the $20,000 threshold would be made permanent from 1 July 2026, and the ATO confirms the measure is now law. Small businesses can finally plan equipment purchases without waiting to see whether the threshold will fall back to $1,000.

Who is eligible

• You carry on a business and your aggregated turnover is under $10 million (your turnover plus that of connected and affiliated entities)
• You use the simplified depreciation rules for small business. If you opted out of them in a previous year, the usual five-year lock-out is suspended until 30 June 2027, so you can opt back in
• The asset is used, or installed ready for use, for a taxable purpose in the year you claim it

How the $20,000 limit works

• The limit applies per asset. A business can write off several assets in the same year as long as each one costs less than $20,000
• The cost includes delivery and installation. If you are registered for GST and can claim the GST credit, the threshold is tested on the GST-exclusive price; if you are not registered, it is the GST-inclusive price
• Only the business-use portion is deductible. A $15,000 ute used 70% for business gives a $10,500 deduction, but the whole asset must still cost less than $20,000 to qualify
• New and second-hand assets both qualify

Assets costing $20,000 or more

Assets at or above the threshold go into the small business general pool and are depreciated at 15% in the first year and 30% each year after that, regardless of how long the asset will actually last. If the pool balance falls below $20,000 at the end of the year, the whole balance can be written off. This is where the real planning happens for businesses buying vehicles and larger equipment.

What is excluded

• Assets leased out to others for more than half the time
• Horticultural plants, software allocated to a software development pool, and capital works such as buildings and structural improvements, which have their own rules
• Cars are eligible, but the car limit still caps the depreciable cost of a passenger vehicle, and the luxury car rules apply to anything above it
• Assets bought for a business that has not started trading yet

Timing and cash flow

The deduction is claimed in the year the asset is first used or installed ready for use, not the year you pay for it. An asset ordered in June but delivered in July belongs to the following year. A deduction only saves tax if the business has taxable income to offset, so buying equipment you do not need in order to “get the write-off” leaves you with less cash, not more. The write-off reduces the tax bill by the deduction multiplied by your tax rate; it is not a refund of the purchase price.

Frequently asked questions

Does the write-off apply to sole traders?

Yes. Sole traders, partnerships, companies and trusts can all use it if they carry on a business with aggregated turnover under $10 million. Employees cannot.

Can I claim a $19,999 asset bought on finance?

Usually yes if it is bought under a chattel mortgage or similar loan where you own the asset. Assets under an operating lease are owned by the lessor, so the lease payments are deducted instead.

Does it affect my BAS?

No. GST credits on the purchase are claimed on your BAS in the usual way. The write-off is an income tax deduction claimed in the business tax return.

Small business tax advice in Melbourne’s west

Kennedy Tax & Business Services prepares tax returns, depreciation schedules and BAS for small businesses across Footscray, Williams Landing and Melbourne’s west. See our business advisory and BAS lodgement services, or contact us before making a large purchase so it is timed correctly.

This article is general information only and does not take into account your personal circumstances. Based on ATO guidance current at October 2026. Speak to a registered tax agent before acting.

Once an SMSF member starts an account based pension, the fund must pay them at least a minimum amount every financial year. Miss it, even by a small amount, and the fund can lose its tax exemption on the pension assets for the whole year. This guide explains the SMSF minimum pension payment rates, how the minimum is calculated, and the rules trustees get wrong most often.

Minimum pension rates by age

The minimum is a percentage of the pension account balance at 1 July (or at the start date for a new pension), based on the member’s age at that time. The rates below have applied since 1 July 2023, when the temporary COVID-era halving ended, and apply for 2026-27.

Age at 1 July (or pension start date)	Minimum annual payment
Under 65	4%
65 to 74	5%
75 to 79	6%
80 to 84	7%
85 to 89	9%
90 to 94	11%
95 or older	14%

Example: a member aged 68 with a pension balance of $600,000 on 1 July 2026 must receive at least $30,000 (5%) by 30 June 2027. The minimum is rounded to the nearest $10. There is no maximum for an account based pension, although transition to retirement pensions are capped at 10% a year.

Pensions that start part way through the year

If a pension starts after 1 July, the minimum is pro-rated for the number of days remaining in the financial year, based on the balance on the start date. If the pension starts on or after 1 June, no payment is required for that financial year. This is why many pensions are commenced in June.

What counts as a pension payment

• Payments must be made in cash from the fund’s bank account to the member. A transfer of shares or property to the member (an in specie payment) does not count towards the minimum
• The money must leave the fund by 30 June. A payment dated 30 June that clears on 1 July belongs to the next year
• Lump sum withdrawals and partial commutations do not count towards the minimum
• Payments can be made weekly, monthly or in one amount, as long as the annual total is reached

What happens if the minimum is not paid

If the fund underpays, the pension is treated as having stopped at the start of the financial year. The fund loses its exempt current pension income for that year, so earnings on the pension assets are taxed at 15% instead of 0%, and the payments that were made are treated as lump sums. The pension has to be formally recommenced, which can also affect the member’s transfer balance cap position.

The ATO allows trustees to self-assess a small, honest shortfall and keep the pension going if the underpayment is no more than one-twelfth of the minimum, it was caused by an honest mistake or matters outside the trustees’ control, the shortfall is paid as soon as practicable in the following year, and the concession has not been used before. Anything outside those conditions needs a written request to the ATO.

Reporting the pension to the ATO

Starting a pension, commuting one or rolling it to another fund are transfer balance account events. All SMSFs must report them on a transfer balance account report (TBAR) within 28 days after the end of the quarter in which the event happened. The amount that can be moved into pension phase is limited by the member’s transfer balance cap, which is $2.1 million for pensions started on or after 1 July 2026. Ordinary pension payments do not need to be reported on a TBAR.

Common mistakes

• Using the wrong balance: the minimum is based on the 1 July balance, not the balance when the payment is made
• Using the wrong age: the age on 1 July sets the rate, even if the member has a birthday during the year that moves them into a higher band
• Forgetting a second pension: each pension account has its own minimum
• Paying the pension from a personal or business account and reimbursing the fund later
• Not having pension documents in place: the trustee minute, pension agreement and, where needed, an actuarial certificate

Frequently asked questions

Can I take more than the minimum?

Yes, for an account based pension there is no maximum. Payments are tax free for members aged 60 and over.

Does the fund need an actuarial certificate?

Only if the fund has both pension and accumulation balances at some point in the year and is not using the segregated method. If every member is in full pension phase for the whole year, no certificate is needed.

What if the fund does not have the cash?

The trustees must sell assets or arrange liquidity in time. The investment strategy is required to consider the fund’s ability to pay pensions, so a fund made up entirely of property with no cash buffer is a problem the auditor will raise.

SMSF pension administration in Melbourne

Kennedy Tax & Business Services calculates minimum pensions, prepares pension documentation and lodges TBARs as part of our SMSF accounting service, and we also provide independent SMSF audits for funds administered elsewhere. Contact our Footscray or Williams Landing office to discuss your fund.

This article is general information only and does not take into account your personal circumstances. Speak to a registered tax agent or licensed financial adviser before starting, changing or stopping a pension.

The superannuation contribution caps went up on 1 July 2026 for the first time in two years. This guide sets out the super contribution caps for 2026-27, the bring-forward and carry-forward rules that let you contribute more, and the traps that lead to excess contributions tax. The figures apply to all super funds, including SMSFs.

2026-27 caps at a glance

Cap	2026-27	2025-26
Concessional (before-tax) contributions	$32,500	$30,000
Non-concessional (after-tax) contributions	$130,000	$120,000
Non-concessional bring-forward (3 years)	Up to $390,000	Up to $360,000
General transfer balance cap	$2.1 million	$2.0 million
CGT cap (small business retirement contributions)	$1,935,000	$1,865,000
Super guarantee rate	12%	12%

Concessional contributions: $32,500

Concessional contributions are taxed at 15% inside the fund and include employer super guarantee, salary sacrifice and personal contributions you claim a tax deduction for. The cap counts all of these together, so an employee on a high salary can reach $32,500 through super guarantee alone. High income earners with combined income and contributions above $250,000 pay an extra 15% on some or all of their concessional contributions under Division 293.

Carry-forward rule: if your total super balance was under $500,000 on 30 June of the previous year, you can use any unused concessional cap from the previous five financial years on top of this year’s cap. Unused amounts expire after five years. This is one of the most useful and least used rules for business owners with uneven income.

To claim a deduction for a personal contribution you must give your fund a notice of intent and have it acknowledged before you lodge your tax return or start a pension with the money. Members aged 67 to 74 must also meet the work test (40 hours in 30 consecutive days) to claim the deduction.

Non-concessional contributions: $130,000

Non-concessional contributions come from after-tax money and are not taxed on the way into the fund. You can make them up to age 75 without a work test. The cap depends on your total super balance (TSB) at the previous 30 June:

Total super balance at 30 June 2026	Non-concessional cap in 2026-27
Under $1.84 million	$390,000 over 3 years (bring-forward)
$1.84 million to under $1.97 million	$260,000 over 2 years
$1.97 million to under $2.1 million	$130,000 (no bring-forward)
$2.1 million or more	Nil

The bring-forward is triggered automatically when you contribute more than the annual cap in a year, and it locks in the caps that applied in the year it was triggered. If you triggered the bring-forward in 2025-26, your three-year total stays at $360,000 even though the cap has since increased.

Transfer balance cap: $2.1 million

The transfer balance cap limits how much super can be moved into tax-free retirement phase pensions. Anyone starting their first pension on or after 1 July 2026 has a personal cap of $2.1 million. People who already had a pension before that date have a personal cap somewhere between $1.6 million and $2.1 million, depending on how much of their cap they have used. The ATO tracks this through transfer balance account reporting, which SMSFs must lodge quarterly.

Other contributions that sit outside the caps

• Downsizer contributions: up to $300,000 per person from the sale of a home owned for at least 10 years, available from age 55, and not counted against the non-concessional cap
• Small business CGT contributions: proceeds from selling business assets under the small business CGT concessions can be contributed up to the lifetime CGT cap of $1,935,000
• Personal injury settlements: structured settlement contributions are excluded from the caps if the paperwork is lodged in time

What happens if you exceed a cap

Excess concessional contributions are added to your taxable income and taxed at your marginal rate, with a 15% offset for the tax the fund already paid, plus an interest charge. Excess non-concessional contributions can be withdrawn along with 85% of the associated earnings, which are then taxed at your marginal rate. If you leave the excess in the fund it is taxed at the top marginal rate. The ATO calculates all of this from your fund’s reporting, which is why contributions must be reported accurately in the SMSF annual return.

Frequently asked questions

When does a contribution count?

When the fund receives it, not when you send it. A contribution made by bank transfer on 30 June that lands on 1 July counts in the new financial year. For SMSFs, the ATO looks at when the money reached the fund’s bank account.

Do the caps apply per fund or per person?

Per person. Contributions to all of your funds are added together.

Can my spouse contribute for me?

Yes. Spouse contributions count against the receiving spouse’s non-concessional cap, and the contributing spouse may be eligible for a tax offset of up to $540 if the receiving spouse’s income is low.

Contribution planning for SMSF members

Kennedy Tax & Business Services tracks contributions against the caps as part of our SMSF accounting service and prepares the SMSF annual return that reports them to the ATO. Contact our Footscray or Williams Landing office before 30 June if you are planning a large contribution.

This article is general information only and does not take into account your personal circumstances. Figures are from ATO published rates and thresholds for 2026-27. Speak to a registered tax agent or licensed financial adviser before acting.

A self managed super fund (SMSF) puts you in charge of your own retirement savings: what the fund invests in, who manages it and how much it costs to run. It also makes you legally responsible for keeping the fund compliant every year. This guide explains how to set up an SMSF in Australia, what it costs, how much you realistically need, and the steps from decision to first contribution.

Is an SMSF right for you?

There is no legal minimum balance for an SMSF, but most of the running costs are fixed. Accounting, the independent audit, the ATO supervisory levy and ASIC fees cost roughly the same whether the fund holds $150,000 or $1.5 million, so the smaller the fund, the bigger the bite those costs take out of returns. An SMSF tends to make sense when:

• You and up to five other members have enough combined super for the fixed costs to be a small percentage of the balance
• You want to hold assets a retail or industry fund cannot, such as direct property, business real property or a specific portfolio of shares
• You are prepared to spend time on the fund each year and to follow the superannuation rules, or to pay an accountant to keep it on track

An SMSF is not a way to access super early, pay off a home or fund a business. The sole purpose test requires every decision to be made for the members’ retirement benefits, and the ATO treats breaches seriously.

Step 1: choose individual or corporate trustees

Every member must be a trustee (or a director of the corporate trustee), and every trustee must be a member. You can have individual trustees, which costs nothing to set up but requires at least two people, or a company as trustee, with the members as its directors. A corporate trustee costs more up front (the ASIC registration fee for a company is around $636 from 1 July 2026, plus a reduced annual review fee of about $70 for a special purpose SMSF trustee company) but it makes changing members, holding assets and dealing with a member’s death much simpler. Most accountants recommend a corporate trustee, especially for single-member funds.

Step 2: prepare the trust deed

The trust deed is the fund’s rule book. It sets out who can be a member, how benefits are paid, what the trustees can invest in and how the fund is wound up. It must be prepared by a lawyer or a reputable document provider, signed and dated by all trustees, and kept up to date as the super laws change. The deed is the first thing an auditor asks for, so an old or generic deed causes problems later.

Step 3: sign the trustee declaration

Each new trustee or director must sign the ATO trustee declaration within 21 days of being appointed. It confirms you understand your duties, and the fund must keep it for at least 10 years. Anyone who has been convicted of dishonesty offences, is an undischarged bankrupt or has been disqualified by the ATO cannot be a trustee.

Step 4: register the fund with the ATO

Once the deed is signed and the fund holds an initial asset, the fund applies for an ABN and TFN and elects to be regulated by the ATO. The election must be made within 60 days of the fund being established. Without it the fund is not a complying fund and cannot receive rollovers or employer contributions, and it loses the 15% concessional tax rate. If the fund will hold commercial property or run a business activity it may also need to register for GST.

Step 5: open a bank account and electronic service address

The fund needs its own bank account in the fund’s name, kept completely separate from members’ personal and business accounts. It also needs an electronic service address (ESA) so it can receive contributions and rollovers through SuperStream. Your accountant or an SMSF administration provider can supply an ESA.

Step 6: write the investment strategy

Trustees must prepare a written investment strategy before investing and review it regularly. It should cover the fund’s investment objectives, the risk and expected return of each asset class, diversification, liquidity (the fund must be able to pay pensions and expenses as they fall due), and whether to hold life insurance for members. A strategy that simply says “the trustees may invest in anything” does not satisfy the rules.

Step 7: roll over existing super and start contributing

With the fund registered and the bank account open, members can ask their existing funds to roll their balances across through SuperStream, and employers can be given the fund’s details for super guarantee contributions. Check the contribution caps before making personal contributions, and consider whether to keep some insurance in the old fund before closing it.

What an SMSF costs to run each year

Cost	Typical amount
ATO supervisory levy	$259 a year ($518 in the first year, covering two years)
ASIC annual review (corporate trustee)	About $70 for a special purpose company
Independent audit	Varies by fund; every SMSF must be audited every year
Accounting and annual return	Depends on the number and type of investments
Actuarial certificate	Only where the fund has both pension and accumulation balances
Investment costs	Brokerage, property management, valuations, insurance

Frequently asked questions

How many members can an SMSF have?

Up to six. All members must be trustees or directors of the corporate trustee, and a member cannot be an employee of another member unless they are relatives.

Can trustees be paid for running the fund?

No. Trustees cannot be paid for their trustee duties. The fund can pay professionals such as accountants, auditors and advisers at arm’s length rates.

Can I live overseas and keep my SMSF?

Only with care. The fund must remain an Australian superannuation fund, which includes tests on where the trustees make their decisions and where the active members live. Get advice before any extended move overseas.

How long does set-up take?

Usually two to four weeks from signing the deed to having an ABN, bank account and ESA ready to receive rollovers, depending on how quickly the ATO processes the registration.

SMSF set-up in Melbourne’s west

Kennedy Tax & Business Services helps trustees in Footscray, Williams Landing and across Melbourne decide whether an SMSF suits them, set the fund up correctly and keep it compliant through our SMSF accounting service. Contact us to book an appointment.

This article is general information only and does not take into account your personal circumstances. Setting up an SMSF is a significant financial decision; speak to a registered tax agent and, where appropriate, a licensed financial adviser before acting.

Driving for Uber, DiDi, Ola or another ride-sourcing platform makes you a business in the ATO’s eyes, even if you only drive on weekends alongside a full-time job. That brings GST, BAS and income tax obligations that catch many drivers out. This guide explains how a rideshare tax return works, what you can claim and what you cannot.

ABN and GST: the rule that surprises most drivers

Most small businesses only need to register for GST once turnover reaches $75,000. Ride-sourcing is different. You must have an ABN and be registered for GST from the day you start driving, regardless of how much you earn. The only exception is if you are an employee of the platform, which is rarely the case. GST applies to every dollar of fares, and penalties and interest can apply if you do not register.

BAS lodgement

Once registered, you lodge a business activity statement (BAS) monthly or quarterly. In it you report GST collected on fares and claim GST credits on the business portion of your costs. You cannot claim GST credits on purchases for personal use. Passengers can also ask you for a tax invoice for fares over $82.50 including GST.

What income to declare

All money earned from ride-sourcing is assessable income, including fares, tips and bonuses from the platform. Report the gross amount and claim the platform’s fees or commission as a deduction, rather than reporting only the net amount paid into your bank account. Ride-sourcing income goes in the business section of your individual tax return, alongside any wages from other work.

Deductions you can claim

• Fees or commission charged by the platform
• Car running costs for the business portion of your driving, using the cents per kilometre method (up to 5,000 business kilometres a year) or the logbook method (a minimum 12-week logbook, valid for five years)
• Fuel, car lease payments, parking fees and tolls where the passenger did not pay them
• Passenger amenities such as bottled water, mints and tissues
• Wipes, sanitiser and cleaning products for the vehicle
• State commercial licences and accreditation, including driver accreditation, registration, medical tests and police checks
• The business portion of your mobile device and plan
• Depreciation on assets you own, such as the car under the logbook method or a phone mount
• Tax agent fees

Only the business portion is deductible. Driving to and from your main job is private, and you are only “on the job” while collecting and transporting passengers. If you claimed a GST credit on a cost, the income tax deduction is the amount excluding GST.

What you cannot claim

• Speeding, parking or other fines
• Getting or renewing your ordinary driver licence
• Meals bought while on a break
• The private portion of car costs
• Trips where the main purpose was private
• Ownership costs, such as depreciation, on a car you borrow from someone else

Records to keep

• Platform income summaries and weekly statements
• Receipts for all expenses (fuel can be estimated from odometer readings under the logbook method)
• Your logbook and odometer readings if you use the logbook method, or diary records showing how you worked out business kilometres under the cents per kilometre method
• Bank statements for the account your earnings are paid into

Keep records for five years after you lodge. The platforms report drivers’ income to the ATO, so what you declare needs to match what they send.

Frequently asked questions

I only drive a few hours a week. Do I still need GST registration?

Yes. The GST registration requirement for ride-sourcing applies from your first fare, no matter how little you earn.

Can I claim my whole car?

No. You can only claim the business-use percentage, worked out with a logbook, or up to 5,000 business kilometres under the cents per kilometre method.

Does this apply to food delivery?

Delivery drivers also declare their income and can claim business expenses, but the GST-from-day-one rule is specific to transporting passengers. Delivery-only drivers follow the normal $75,000 GST threshold.

Rideshare tax returns in Melbourne’s west

Kennedy Tax & Business Services prepares tax returns and quarterly BAS for rideshare drivers across Footscray, Williams Landing and Melbourne’s west, including GST registration for new drivers. See our tax return preparation and BAS lodgement services, or contact us to book an appointment.

This article is general information only and does not take into account your personal circumstances. Figures are from ATO ride-sourcing guidance. Speak to a registered tax agent before acting on it.

A partnership is one of the simplest ways for two or more people to run a business together, but its tax reporting trips up many owners. The partnership lodges its own return, yet it pays no tax itself. Each partner then pays tax on their share through their personal return. This guide explains how the partnership tax return works, what goes in it, when it is due and the traps to avoid.

Does a partnership pay tax?

No. The ATO treats a partnership as a reporting entity, not a taxable one. The partnership lodges a partnership tax return each year showing its income, expenses and net income or loss, and how that result is split between the partners. Each partner then includes their share in their own individual tax return and pays tax at their marginal rate.

Partners must declare their share whether or not the money was actually paid out to them during the year.

What the partnership tax return reports

• Business income, including sales, fees and other assessable amounts
• Allowable deductions, such as materials, rent, wages to employees, vehicle and equipment costs
• Net income or loss for the year
• Each partner’s share of the net income or loss, and of any capital gains, as set by the partnership agreement
• Partnership details, such as the ABN, business activity and partner information

When is the partnership tax return due?

If the partnership lodges its own return, it is due by 31 October after the end of the financial year. If a registered tax agent lodges it, the agent will advise the due date under the tax agent lodgment program, which is usually later. The partners’ individual returns depend on the partnership figures, so the partnership return is normally prepared first.

Partnership losses

Where a partnership makes a net loss, each partner may claim a deduction for their share of the loss in their own return. Whether that loss can be offset against other income, such as a salary, depends on the non-commercial loss rules, so get advice before relying on a partnership loss to reduce your personal tax.

Capital gains in a partnership

Partnership assets are treated as owned by the partners in proportion to their interests. When an asset is sold, each partner works out their own capital gain or loss on their share, rather than the partnership reporting one combined gain.

When a partner joins or leaves

A change in partners technically dissolves the partnership. If the business continues with at least one common partner, no gap in trading and a continuity clause in the partnership agreement (written or implied by conduct), the ATO will generally treat it as a reconstituted partnership. It keeps its ABN and TFN and lodges one return for the year. If the change amounts to a wind-up, a new partnership is formed, new registrations are needed, and two returns are lodged: one up to the dissolution date and one from the new formation date. The ATO must be told of a change within 28 days.

Common mistakes

• Partners only declaring what was paid to them, instead of their full share of net income
• Splitting profits differently from what the partnership agreement says
• Claiming private costs through the partnership
• Forgetting that GST registration is required once turnover reaches $75,000
• Lodging the individual returns before the partnership return is finalised, then having to amend them

Frequently asked questions

Do partners pay tax separately?

Yes. Each partner reports their share of the partnership’s net income or loss in their own tax return and pays tax at their individual rates.

Does a partnership need an ABN and TFN?

Yes. A partnership has its own TFN and ABN, separate from the partners’ personal ones, and uses them for its return and any GST registration.

Can a partnership pay a partner a salary?

Partners are not employees of their own partnership, so amounts paid to a partner for their work are generally treated as part of the distribution of partnership income rather than wages. Ask your accountant how to treat these payments in your partnership agreement and returns.

Partnership tax returns in Melbourne

Kennedy Tax & Business Services prepares partnership and partner returns together, so the figures match and nothing is declared twice or missed. We also advise on business structures if a partnership is no longer the right fit, and handle BAS lodgement. Contact our Footscray or Williams Landing office to book an appointment.

This article is general information only and does not take into account your personal circumstances. Speak to a registered tax agent before acting on it.

Every self-managed super fund (SMSF) must lodge an SMSF annual return (SAR) each year. It is more than a tax return: it also reports regulatory information and member contributions, and it is how the fund pays the ATO supervisory levy. This guide covers what the SMSF tax return includes, the due dates, the levy and the audit that must be completed before you lodge.

What the SMSF annual return reports

• Income tax: the fund’s assessable income, deductions and tax payable
• Regulatory information: details the ATO uses to supervise the fund
• Member contributions: contributions and account balances for each member
• Supervisory levy: the annual levy is paid through the return

If a member’s opening or closing balance at 30 June is zero, it still needs to be reported as zero on the return.

The audit comes first

Before you lodge, the fund’s annual audit must be finalised. The audit must be carried out by an approved SMSF auditor, who checks both the financial statements and the fund’s compliance with super law. Leave enough time: the auditor needs the fund’s financial statements, bank statements, investment records, minutes and member details.

Kennedy Tax & Business Services provides independent SMSF audits for trustees and accountants.

SMSF tax return due dates

Situation	Due date
Self-lodger, newly registered fund or overdue prior-year return	Lodge by 31 October, pay by 1 December
Self-lodger, all other returns	28 February, unless the ATO sets a different date
Lodged by a tax agent	The date set under the tax agent lodgment program
First year, or first return after a “return not necessary”	28 February (31 October if the fund was reviewed at registration)

If a due date falls on a weekend or public holiday, you can lodge and pay on the next business day.

The SMSF supervisory levy

• Continuing funds: $259, which goes towards the next financial year
• Newly registered funds: $518, covering the current and the next financial year
• Funds being wound up: no levy is required if it was paid in the previous financial year

What happens if you lodge late

Failing to lodge by the due date can result in penalties and the loss of the fund’s tax concessions. The fund’s status on Super Fund Lookup may also change to “regulation details removed”, which can stop the fund receiving rollovers and employer contributions. Paper returns can take up to 50 days to process, so lodge electronically where possible.

A simple timeline for trustees

1. After 30 June: collect bank statements, investment reports, contribution details and property records.
2. Prepare the accounts: your accountant prepares the financial statements and member statements.
3. Audit: send the complete file to your approved SMSF auditor and respond to any queries.
4. Lodge: once the audit is finalised, lodge the SAR and pay the tax and levy by the due date.

Frequently asked questions

Is the SMSF annual return the same as a tax return?

It includes the fund’s income tax return, but it also covers regulatory information, member contributions and the supervisory levy, so it is broader than a standard tax return.

Can I lodge the SMSF return before the audit is done?

No. The audit must be finalised before the annual return is lodged.

How much is the SMSF levy?

$259 for continuing funds. Newly registered funds pay $518 on their first return, covering two years.

SMSF accounting and audit in Melbourne

Kennedy Tax & Business Services helps trustees across Melbourne with SMSF accounting and annual returns and independent SMSF audits. Contact our Footscray or Williams Landing office to discuss your fund.

This article is general information only and does not take into account your personal circumstances. Figures and due dates are from the ATO’s SMSF annual return guidance. Speak to a registered tax agent or SMSF specialist before acting on it.