Starting 1 January 2025, large Australian businesses and financial institutions will be required to produce annual sustainability reports, including climate-related financial disclosures, under new legislation recently passed by Parliament.

The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 received Royal Assent on 17 September 2024, mandating these climate reporting obligations. ASIC Commissioner Kate O’Rourke encourages impacted entities to actively engage with these requirements, emphasising the importance of setting up effective governance and sustainability processes before the new rules take effect.

“This reform has substantial implications for our stakeholders, and ASIC acknowledges the transition period needed for businesses to build their reporting capabilities,” said Commissioner O’Rourke. “Our approach to supervision and enforcement will consider this adjustment phase, ensuring a balanced and practical implementation.”

To aid in this transition, ASIC is maintaining standards for voluntary disclosures and protecting against misleading conduct. Additionally, a dedicated sustainability reporting resource is available on the ASIC website to support reporting entities, with updates and regulatory guidance to be added over time.

ASIC also plans to consult with stakeholders to develop specific guidance on meeting these reporting obligations and how these will align with current legal requirements.

As more stakeholders factor environmental sustainability into financial decision-making, the importance of climate disclosure continues to grow. Enhanced climate reporting will benefit entities, providing them with insights into their climate-related risks and opportunities over varying timeframes.

Phased Reporting Rollout
The new climate reporting will phase in across three groups over the next three years:

• Group 1: Entities with $500 million in revenue, $1 billion in assets, or 500+ employees, starting their reporting from 1 January 2025.
• Group 2: Entities with $200 million in revenue, $500 million in assets, or 250+ employees, beginning from 1 July 2026.
• Group 3: Entities with $50 million in revenue, $25 million in assets, or 100+ employees, commencing from 1 July 2027.

ASIC advises all reporting entities, including those in later groups, to start preparing for these requirements now. Visit ASIC’s sustainability reporting page for more information on the new regime and ongoing guidance.

The ATO has been responsible for the administration of the early release of superannuation on compassionate grounds since 1 July 2018. It will only approve a release of superannuation on compassionate grounds if the applicant meets all the conditions set out in the regulations, including that the applicant has no other means to pay the expenses.

The five main grounds of eligibility are:

• medical treatment or transport (i.e., to treat a life-threatening illness or injury, or alleviate acute or chronic pain or mental illness) for the applicant or their dependant;
• accommodating a disability for the applicant or their dependant;
• palliative care for a terminal illness for the applicant or their dependant;
• funeral expenses for a dependant of the applicant; or
• preventing foreclosure or forced sale of the applicant’s home.

With the holiday season kicking off, you may be planning a celebration with your staff.

Before you hire a restaurant or book an event, make sure you work out if the benefits you provide your employees are considered entertainment related and if they’ll attract fringe benefits tax (FBT).

This will depend on:

• the amount you spend on each employee
• when and where your celebration is held
• who attends – is it just employees? Or are partners, clients and suppliers also invited?
• the value and type of gifts you provide.

If you do provide entertainment-related fringe benefits, keep the right records to support this so you can calculate their taxable value.

It’s important to get on top of how FBT works before you provide perks and extras. Otherwise, you may end up with an unexpected FBT liability.

You can find more fringe benefits tax and entertainment information on the ATO’s website.

From 1 April 2025, a plug-in hybrid electric vehicle (‘PHEV’) will not be considered a zero or low emissions vehicle under fringe benefits tax (‘FBT’) law and will not be eligible for the electric car FBT exemption. However, an employer can continue to apply the electric car exemption if:

• use of the PHEV was exempt from FBT before 1 April 2025; and
• they have a financially binding commitment to continue providing private use of the vehicle to an employee or their associate on and after 1 April 2025 (note that any optional extension of the agreement is not considered binding).

If there is a change to a pre-existing commitment on or after 1 April 2025, the FBT exemption for the PHEV will no longer apply from the date of that new commitment.

An employer is not entitled to an exemption from FBT after 1 April 2025 if there was no binding financial commitment to provide the car to a particular employee in place before then.

The ATO has provided guidance about when an individual not carrying on an investment business may be entitled to a deduction for fees paid for financial advice.

An individual is entitled to a deduction for fees for financial advice to the extent that the loss or outgoing is incurred in gaining or producing assessable income unless the loss or outgoing is of a capital, private or domestic nature.

Fees for financial advice an individual incurs may also be deductible to the extent that the advice relates to managing their ‘tax affairs’ (e.g., fees for advice in relation to salary sacrifice arrangements). However, fees for financial advice on a proposed investment prior to the acquisition of an asset, or about how to invest additional funds to grow an investment portfolio, will not be deductible.

The individual must also have sufficient evidence of the expenditure to claim the expense as a deduction, such as a properly itemised invoice.

As the festive season approaches, employers that hire new employees to help with their business should remember the following when it comes to their employer tax and super obligations:

• Employers should make sure they are withholding the right amount of tax from payments they make to their employees and other payees, especially as this will help their employees meet their end-of-year tax liabilities;
• Employers must pay super guarantee (currently at 11.5%) to all eligible employee’s super funds in full and on time to avoid paying the super guarantee charge; and
• If employers are still not reporting through single touch payroll (‘STP’) and they do not have an approved exemption, deferral or concession in place, they should start reporting now.  If they have just started a business or recently employed staff, they will need to report through STP from their first payday.

Individual taxpayers can take the following steps right now to ensure the correct amount of tax is being put aside throughout the year:

• let their employer know if they have a study or training support loan, such as a HECS or HELP debt;
• check they are only claiming the tax-free threshold from one employer;
• consider whether the Medicare Levy Surcharge may affect them this financial year (i.e., whether they have the appropriate private health insurance);
• check their income tier is correct for their private health insurance rebate; and
• consider voluntarily entering PAYG instalments and pre-paying tax throughout the year to avoid a large tax bill at tax time for investment or business income.

If you would like to discuss or implement any of these steps and strategies in more detail, please feel free to contact our office.

One of the many responsibilities SMSF trustees have every income year is valuing their fund’s assets at market value.

The market value of an asset is the amount that a willing buyer and seller would agree to in an arm’s-length transaction.  These valuations will be used  when preparing the fund’s accounts, statements and SMSF annual return (‘SAR’).

Asset valuations will be reviewed by an approved SMSF auditor as part of the annual audit prior to lodgment of the SAR.  The auditor will check that assets have been valued correctly and assess and document whether the basis for the valuations is appropriate given the nature of the asset.  The auditor is not responsible for valuing fund assets.

Taxpayers should ensure that they have their valuations done before going to the auditor.

It is the responsibility of the SMSF trustee to provide objective and supportable evidence to their auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund.  Failure to do so could result in a potential late lodgment of their annual return or a contravention if mistakes have been made.

SMSF trustees should start researching now to find what type of evidence they need to support the valuation as this can take time.  For some asset types valuations must be undertaken by a qualified independent valuer.

Where a taxpayer has been the victim of identity, tax or super fraud, the ATO may apply security safeguards to their account to prevent further harm.  This may require the impacted taxpayer to contact the ATO each time they need to access their information and cause inconvenience for the taxpayer as well as their tax agents.

The ATO has recently enhanced processes to improve ongoing access to ATO online services.  Impacted taxpayers must contact the ATO for initial access and then set a Strong online access strength.

To set a Strong online access strength, taxpayers need to:

• set up their myGovID to a Strong identity strength using their Australian passport;
• connect their myGovID to their myGov account;
• sign in to myGov with their myGovID; and
• go to ATO online services.

Once set, taxpayers no longer need to contact the ATO every time they access their information.

Impacted taxpayers must continue to use their Strong myGovID whenever they access ATO online services, or account access will be restricted to maintain ongoing protection of client information

The digital identity app ‘myGovID’ will soon be changing its name to ‘myID’.  While the name is changing, the login and security will not change. The new name aims to reduce the confusion between myGovID and myGov.

Taxpayers who have already set up their myGovID and use it to access government online services will not need to do anything when the app changes to myID.  They will still have:

• the same details — there is no need to set up a new myID.  Their login details (including email address) and identity strength remain the same;
• continued use — once available their existing app should automatically update to myID or they can manually update it from the APP Store or Google Play; and
• access to services — they can still use the app to securely access government online services.