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Cash flow is the lifeblood of any small business. And for many businesses — particularly in hospitality, trades and personal services — that includes a mix of card and cash payments.

From time to time, headlines hit the stands, reminding business owners not to “hide” cash income. While those messages can sound heavy-handed, the underlying issue is important. As your accountant, our role isn’t to alarm you – it’s to help you understand the risks and make sure your business is protected.

Cash Is Still Income

It doesn’t matter whether a customer pays you via EFTPOS, direct transfer or a $50 note across the counter. If it’s income earned in your business, it must be recorded and reported.

Where businesses run into trouble is when cash payments are treated differently — not entered into the accounting system, used to pay expenses informally, or simply not banked. Even if the intention isn’t dishonest, inconsistent record-keeping can quickly create discrepancies in your numbers.

Over time, those discrepancies become visible.

Why Is This A Growing Risk Area?

Today’s compliance environment is very data-driven. Reported income is often compared against industry benchmarks, supplier data, contractor reporting and even lifestyle indicators. If your reported figures fall significantly outside what would be expected for your industry and turnover, that can raise questions.

In addition, employees, competitors and even customers sometimes report suspected under-reporting. That means relying on cash being “invisible” is no longer a realistic assumption.

For small businesses, the consequences of getting this wrong can be significant — reassessments of prior years, penalties, interest, and the stress of a review or audit. Even where there was no deliberate wrongdoing, poor systems can be costly to unwind.

It’s not just about sales

When we talk about cash income, we’re also talking about:

Cash wages paid without PAYG withholding

Superannuation is not being processed correctly

Contractors paid “off the books”

Personal expenses are being paid from business takings

These practices don’t just create tax risk — they create employment law and superannuation exposure as well.

Practical Steps To Protect Your Business

The solution isn’t complicated, but it does require discipline.

First, ensure every sale is recorded, regardless of how it’s paid. Your point-of-sale system or accounting software should capture the full picture of daily takings.

Second, keep business and personal finances completely separate. Cash taken from the till for personal use without proper recording creates accounting distortions and tax risk.

Third, reconcile regularly. Matching your sales records to bank deposits and merchant facility reports helps identify discrepancies early.

Finally, get advice early if something isn’t clear. If your margins look lower than expected, or your cash flow doesn’t align with the reported profit, your accountant can review it together with you before it becomes a bigger issue.

The Bigger Picture

Running a business is hard enough without the added stress of compliance concerns. Accurate reporting isn’t just about meeting obligations — it protects the value of your business, strengthens credibility with lenders, and gives you reliable data to make decisions.

If your systems aren’t as tight as they could be, that’s not a criticism — it’s an opportunity to improve them. A proactive review now is always far easier than dealing with problems later.

If you’d like to review your record-keeping processes or cash controls, let’s have that conversation.

The fringe benefits tax year runs from 1 April to 31 March — and if your business provided any non-cash benefits to employees or their family members during that period, an FBT return may be due. The lodgement deadline is 21 May, so now is the time to check whether this applies to you.

What is fringe benefits tax?

Fringe benefits tax, or FBT, is a tax paid by employers on certain benefits they provide to employees, associates of employees, or directors — in addition to, or instead of, salary and wages. The current FBT rate is 47%, which is aligned with the top marginal income tax rate. It is separate from income tax and is calculated on the grossed-up taxable value of the benefits provided.

It is worth noting that FBT is an employer obligation, not an employee one. The employee receives the benefit, but it is the employer who is responsible for calculating, reporting, and paying the tax.

Which benefits commonly trigger FBT?

The most common fringe benefits that create an FBT liability include company cars used for private purposes, car parking provided at or near a workplace, entertainment such as meals, functions, and tickets to events, low or no-interest loans to employees, and living away from home allowances. Housing provided to employees is also a common trigger, particularly in remote locations or when relocating staff.

Not all benefits are subject to FBT. Some are exempt — for example, certain work-related items such as laptops, mobile phones, and tools of trade used primarily for work. Minor benefits with a taxable value under $300 may also be exempt, provided they are provided on an irregular and infrequent basis. Understanding which benefits fall in or out of the FBT net is essential before you conclude that no return is required.

Reportable fringe benefits on payment summaries

If an employee receives fringe benefits with a total grossed-up taxable value exceeding $2,000 in the FBT year, the employer must record a reportable fringe benefits amount on the employee’s income statement. This amount does not increase the employee’s income tax liability directly, but it is taken into account for certain income tests — affecting things like Medicare Levy Surcharge eligibility, HECS-HELP repayments, and government benefit calculations. Employees should be aware of this if it applies to them.

What you need to do before 21 May

If your business has provided fringe benefits during the 2025–26 FBT year, you need to calculate the taxable value of those benefits, prepare and lodge your FBT return, and pay any FBT owing by 21 May 2026. If you are lodging through a registered tax agent, an extended due date of 25 June 2026 may apply. Even if you do not owe any FBT — for example, because all benefits were exempt — it is worth reviewing your position to ensure you are not inadvertently missing an obligation.

If your business has not provided any fringe benefits and you have previously lodged an FBT return, you may need to advise the ATO that you are no longer required to lodge. Your accountant can help you confirm this and make sure your obligations are fully met before the deadline.

FBT is one of the more complex areas of tax compliance — the rules around what is and is not taxable can be tricky, and the cost of getting it wrong can be significant. If you are not sure whether you need to lodge a return, get in touch with us before the 21 May deadline.

Inheriting a home can be both an emotional and practical experience.

Alongside the personal significance, there are important tax considerations to be aware of  –  particularly if you decide to live in the property for a period and then sell it.

Understanding how the Australian tax rules apply can help you avoid surprises and make informed decisions.

From a tax perspective, the key issue is capital gains tax (CGT). Whether CGT applies  –  and how much  –  depends on how the property was used both before and after you inherited it.

If the deceased person lived in the property as their main residence and it was not being rented out at the time of death, the starting point is generally favourable. In many cases, the property can be sold CGT-free if it is sold within two years of the date of death. This two-year period is an important concession and often provides flexibility for beneficiaries while estates are being finalised.

However, things can change if you move into the inherited home, live in it, and later sell it. Living in the property does not automatically reset the tax clock or create a new CGT exemption.

The CGT outcome will depend on:

When the property is sold,

Whether it was ever used to produce income (such as being rented), and

The deceased’s original cost base and ownership history.

If the property is sold after the two-year window, a partial CGT exemption may still apply. The capital gain is generally calculated based on the period from the deceased’s date of death to the date of sale, with exemptions applied for periods where the property was treated as a main residence. Importantly, your time living in the property can help reduce or eliminate the taxable gain  –  but it doesn’t guarantee a full exemption.

If the deceased had rented the property out or never lived in it as their main residence, the CGT position can be more complex. In these cases, the property may be fully subject to CGT, and the starting cost base may trace back to when the deceased originally acquired the property  –  sometimes decades earlier.

Another common trap is assuming that no records are needed. In reality, keeping documentation such as probate valuations, ownership dates, and details of any improvements made to the property is critical. These records form the foundation of an accurate CGT calculation.

Inheriting property brings with it both opportunity and responsibility. Before making decisions about moving in or selling, it’s worth getting tailored advice. A short conversation early on can help you understand your options, manage tax exposure, and make choices that align with both your personal and financial goals.

In today’s digital world, people are accumulating assets in more forms than ever. 

Some are obvious, such as shares or property, while others exist quietly online and are often forgotten until tax time. 

Yet even if you haven’t thought about them in months – or years – these digital assets can still have tax implications that matter to your annual return and your financial wellbeing.

What Counts As A Digital Asset?

When most people think of digital assets, cryptocurrency is the first thing that comes to mind. But the landscape is broader than just crypto. Other examples include:

• Non-fungible tokens (NFTs) and other blockchain-based collectibles
• Digital rights or licences you hold online
• Domain names or websites you own that generate revenue
• Earnings from online platforms or advertising
• Loyalty points or rewards with monetary value
• Digital artwork, licences, or content that generates revenue

These assets – even if they sit idle or you forgot you owned them – can trigger tax consequences when you sell, exchange, swap, or otherwise dispose of them.

Why Forgotten Digital Assets Still Matter

Digital assets are often overlooked because they’re new, intangible, or stored in wallets and accounts separate from traditional financial systems. But tax law treats them like any other asset.

1. They Can Trigger Taxable Events
   Even if you haven’t “cashed out,” actions like trading one token for another, using crypto to buy goods, or receiving rewards can create taxable events. These may result in capital gains or ordinary income.
2. Record Keeping Is Essential
   You need records showing when you acquired the asset, what you paid, and what you received when it was sold or exchanged. Without proper documentation, you risk miscalculating gains or losses, which can lead to underpaying or overpaying tax.
3. Many Owners Are Unaware Of Obligations
   A significant number of digital asset owners are uncertain about their tax obligations. This applies not only to cryptocurrency but also to other online assets with potential income or value.

Common Digital Asset Tax Traps

• Lost or forgotten wallets, leaving you unsure what you own
• Rewards, airdrops, or staking returns counted as income even if never converted to cash
• Swaps or trades triggering capital gains tax, even without a cash exchange
• Selling NFTs or receiving royalty income is treated like business income

How to Be Better Prepared

• Maintain comprehensive records for all digital transactions
• Regularly review all wallets, exchange accounts, and platforms
• Seek professional advice for guidance on reporting and compliance

Don’t Let Hidden Assets Haunt Your Tax Return

Digital assets have become a normal part of many Australians’ financial portfolios. Whether intentionally held or forgotten in an old wallet, they still matter at tax time. Keeping clear records and understanding your obligations can make tax season smooth and stress-free.

Need Help Navigating Digital Assets at Tax Time?

Digital assets can be complex, and tax rules are evolving. If you’re unsure how your crypto, NFTs, or other digital holdings should be reported, a qualified accountant can provide clarity. Contact us today to review your digital asset positions, ensure compliance, and safeguard your financial future.

Fringe Benefits Tax (FBT) is a tax that applies to most non-cash benefits provided to employees in addition to their salary or wages. 

For employers, understanding FBT is essential to stay compliant, avoid penalties, and manage the financial implications of providing benefits.

What Is Fringe Benefits Tax?

FBT is separate from income tax and is paid by the employer, not the employee. It covers benefits like company cars, low-interest loans, entertainment, or housing provided to employees or their associates. The tax is calculated on the grossed-up taxable value of the benefit, meaning the actual cost of providing the benefit is adjusted to reflect the gross salary an employee would need to earn to buy the same benefit after income tax.

The purpose of FBT is to ensure fairness in the tax system. Without it, non-cash benefits could allow employees to receive untaxed value, giving them a financial advantage over those receiving only a cash salary.

Common FBT Scenarios

Employers often encounter FBT in situations such as:

• Company cars: Personal use of a work vehicle can attract FBT.
• Entertainment: Meals, event tickets, or staff functions may be subject to FBT, depending on the circumstances.
• Loans: Low-interest or interest-free loans provided to employees.
• Housing or property: Accommodation provided to employees as part of their employment package.

Why Employers Should Care

FBT can have significant cost implications if not managed properly. In addition to the tax itself, failing to comply with FBT reporting requirements can result in penalties or interest charges. Planning and record-keeping are crucial to ensure benefits are recorded accurately and reported correctly in your annual FBT return.

Practical Tips for Employers

1. Keep accurate records: Document all benefits provided, their value, and the dates.
2. Understand exemptions and concessions: Some benefits, such as minor benefits under $300 or certain work-related items, may be exempt.
3. Communicate with employees: Ensure employees understand which benefits are taxable and how they affect remuneration.
4. Review your policies regularly: Update benefit policies to reflect changes in business operations or FBT legislation.
5. Use software or a professional adviser: Automated systems or accountants can help calculate FBT and lodge returns accurately.
   

A Simple FBT Checklist for Employers

• Identify all benefits provided to employees (cash and non-cash).
• Determine the taxable value of each benefit.
• Check for any exemptions, concessions, or rebates that apply.
• Keep detailed records of dates, amounts, and recipients.
• Calculate FBT liability using the current FBT rate.
• Lodge the FBT return by the due date (usually 21 May for the FBT year ending 31 March).
• Adjust employee remuneration packages if needed to manage FBT costs.
• Review policies and benefits annually to ensure ongoing compliance.

By understanding which benefits are taxable, maintaining accurate records, and following a simple checklist, employers can confidently manage FBT obligations while providing value to employees. Proactive planning not only prevents costly errors but also supports clear communication and transparency between employers and staff.

After a proper break, getting back into business mode can feel tough. January can feel like one long Monday, making your vacation seem further away by the day. But for businesses, it’s imperative. 

Between catching up on emails, reconnecting with clients and getting your team back into routine, it’s easy for tax and compliance obligations to slip through the cracks. 

To help you start the year on the right foot, here are the key tax-related responsibilities every business should stay on top of when returning from a holiday shutdown.

• Reconfirm Your Payroll And PAYG Withholding Settings
  

  If your business processes were paused over the break, give your payroll system a quick health check before the first pay run. 

Make sure employee details, pay rates, leave balances, and PAYG withholding settings are correct – especially if any pay rises or role changes took effect from 1 January. This is also a good time to check that STP reporting is functioning properly to avoid late lodgment issues.

• Catch Up On BAS And IAS Deadlines
  

  It’s surprisingly common for businesses to lose track of upcoming activity statement due dates when the holidays disrupt normal workflows. Review the next BAS or IAS deadline as soon as you reopen and set reminders for your team –  for many businesses, this should be 28 February 2026. If cash flow is tight after the break, plan ahead to meet your GST and PAYG instalment obligations without scrambling.

• Review Superannuation Contributions
  

  This is a good time to confirm that contributions from pre-Christmas pay runs have been paid and cleared on time. The next quarterly super guarantee (SG) contribution deadline is 28 January 2026. If you missed a deadline, address it promptly to minimise Super Guarantee Charge exposure.

• Stay Alert For ATO Correspondence
  

  ATO letters and notices may have arrived while your office was closed. Make sure someone checks the business mailbox and myGovID inbox early in the new year to avoid missed correspondence. Missing an ATO request – especially one related to overdue lodgments or verification checks – can lead to penalties or payment complications.

• Restart Good Record-Keeping Habits

  Holiday mode sometimes means receipts pile up or bookkeeping gets put on hold. 

A clean reset in January helps avoid errors later in the year. Updating your reconciliations, lodging any outstanding documents, and reviewing financial workflows will help restore order quickly. 

Returning from a break is the perfect opportunity to reset, regroup, and make sure your tax affairs are starting the year tidy, compliant, and stress-free. Taking the time now to review where things stand can help you avoid last-minute pressure and unexpected issues later on.

If you’re unsure about upcoming obligations, reporting requirements, or deadlines, having the right support can make all the difference.

Working with an accountant can help you prioritise what needs attention, stay on top of compliance, and ease the transition back into business – allowing you to focus on the year ahead with greater confidence and clarity.

As the year winds down, many businesses are preparing to celebrate with end-of-year parties, staff gifts, and client events. 

While these celebrations are a great way to recognise your team’s hard work, it’s important to understand the Fringe Benefits Tax (FBT) implications that can arise. 

Getting it wrong can lead to unexpected tax bills – so here’s what you need to know before the festive season kicks off.

When Does FBT Apply to Christmas Parties?

The good news is that not all Christmas party costs are subject to FBT. The tax applies only when a benefit is considered “entertainment” and exceeds certain thresholds or does not fall under available exemptions.

A Christmas party held on the business premises on a working day is usually exempt from FBT for employees. This is because it typically qualifies as a minor benefit or falls under the property benefit exemption.

However, if your party is off-site – for example, at a restaurant or venue – FBT may apply depending in the cost per person, who attends, and whether the minor benefits exemption applies.

The Minor Benefits Exemption

One of the most commonly used exemptions for Christmas events is the minor benefits exemption. Costs under $300 per person, including GST, may be exempt from FBT if the benefit is infrequent and irregular.

This $300 threshold applies to each person individually. So, an off-site Christmas dinner costing $150 per employee and $120 per partner would generally fall under the exemption.

Note: The exemption applies separately to party costs and gifts. This means an employee could receive a party benefit under $300 and a gift under $300, and both may still be exempt.

What About Clients?

FBT does not apply to entertainment provided to clients. However, the cost is typically not tax-deductible, nor can you claim GST credits. So while inviting clients won’t cause FBT issues, you should be aware of the deduction limitations.

FBT on Gifts vs Entertainment

Gifts for employees can be tricky. Items such as gift cards, hampers, wine, or store vouchers may be considered minor benefits if under $300 per person. In that case, they are not subject to FBT, but you also can’t claim a deduction or GST credits.

Entertainment-type gifts – like theatre tickets or holiday vouchers – are more likely to attract FBT unless under the minor benefits threshold.

Best Practices for a Compliant Festive Season

• Keep detailed records of attendees and costs
• Check whether each benefit is under the $300 minor benefits limit
• Separate costs for employees, associates, and clients
• Consider holding events on business premises to reduce FBT risk
• Speak to your accountant early if planning gifts or multiple events

With a bit of planning, your business can celebrate the festive season while avoiding FBT surprises – and ensuring everyone enjoys the end-of-year cheer.

No one enjoys the idea of an Australian Taxation Office (ATO) audit, but it’s a reality that both individuals and businesses should be prepared for.

The good news is that most audits are triggered for specific reasons — and staying honest and transparent with your accountant can make all the difference if the ATO ever comes knocking.

How Often Does The ATO Conduct Audits?

While not every taxpayer will face an audit, the ATO regularly reviews data and conducts targeted compliance activities across Australia. Thousands of reviews and audits are performed each year, particularly in industries or areas where discrepancies are more common — such as cash-heavy businesses, high-value property transactions, or unusually large deductions.

With data-matching technology improving every year, the ATO now automatically cross-checks information from banks, employers, super funds, and even online platforms like Airbnb and Uber. This means inconsistencies in reported income, deductions, or business activity are far easier to spot than in the past.

Who Might Be Audited?

The ATO uses data analytics to identify potential red flags, such as:

• Income that doesn’t match third-party data (like employer-reported earnings).
  
• Unusually high deductions compared to others in your occupation or industry.
  
• Sudden or unexplained changes in business income or expenses.
  
• Failure to lodge returns or BAS statements on time.
  
• Participation in schemes or arrangements that appear to artificially reduce tax.
  

Even if your records are accurate, you can still be randomly selected for review — so it pays to keep everything above board.

Why Full Disclosure To Your Accountant Matters

Your accountant’s advice and reporting are only as accurate as the information you provide. If you withhold or misrepresent income, expenses, or assets — even unintentionally — you may face serious consequences if an audit reveals discrepancies.

Importantly, your accountant cannot be held liable for errors or penalties resulting from incomplete or false information supplied by the client. When you disclose openly, you give your accountant the best chance to prepare accurate returns and ensure compliance with tax law — and to protect you in the event of an ATO review.

The real cost of an audit

An audit isn’t just stressful — it can also be costly. Depending on the scope and duration, professional fees, time spent gathering records, and potential penalties can add up quickly. If the ATO finds that you’ve underpaid tax, you could face interest charges, penalties, and repayment obligations stretching back several years.

Some businesses choose to protect themselves with audit insurance, which covers the professional fees incurred during an ATO review or audit. It’s worth discussing whether this option suits your circumstances.

Staying on the safe side

The best way to avoid audit trouble is simple — keep thorough records, stay compliant, and communicate openly with your accountant. Double-check your information before lodging, seek professional advice before making unusual claims, and never ignore ATO correspondence.

By maintaining transparency and good record-keeping, you can face any ATO scrutiny with confidence — and stay focused on running your business, not defending your books.

If you haven’t yet lodged your tax return, you’re not alone. With the 31 October deadline fast approaching, now’s the time to get everything in order so you can lodge on time and avoid penalties. 

A little organisation in these final days can save you stress and ensure you don’t miss out on legitimate claims.

1. Gather Your Income Records

Start by collecting all records of your income for the year, including:

• PAYG payment summaries or income statements from your employer (available in myGov).
• Bank interest statements.
• Dividend statements from shares.
• Any rental property income.
• Income from side hustles, freelance work, or the gig economy.

Even small amounts matter—missing income can raise red flags with the ATO.

2. Pull Together Your Deductions

Deductions reduce your taxable income, so make sure you’ve got evidence for what you plan to claim. Common deductions include:

• Work-related expenses (tools, uniforms, protective gear).
• Home office expenses (if you worked from home).
• Vehicle expenses where travel was directly related to your job.
• Self-education expenses tied to your current employment.

Remember: you must have spent the money yourself, and it must relate directly to earning your income.

3. Review Investment Records

If you hold investments, gather:

• Dividend and distribution statements.
• Records of any shares or assets sold (for capital gains tax).
• Rental property expenses such as interest, rates, insurance, repairs, and agent fees.

These ensure your return captures both income and deductions accurately.

4. Check Your Private Health Insurance

If you have private health insurance, make sure you’ve received your annual statement. This helps determine whether you qualify for the rebate and whether the Medicare levy surcharge applies.

5. Make Sure You’re Lodging on Time

If you’re lodging yourself, the deadline is 31 October. Missing it may result in penalties. If you’re working with a registered tax agent, you may be eligible for an extended lodgement period—but you need to be on their client list before the deadline.

A last-minute dash doesn’t need to be stressful. By pulling together the essentials—income records, deduction evidence, and investment details—you’ll be ready to lodge with confidence.

Need help getting everything in order before 31 October? You can still reach out to an accountant or tax adviser today. With professional support, you can be sure your return is accurate, compliant, and takes advantage of all legitimate deductions available to you. Plus, as an added bonus, if you engage an accountant, we can take the stress out of your hands, and may be able to lodge a return for you after the deadline. 

If you run your business from home, you’re not alone—and you may be entitled to valuable tax deductions. 

The ATO allows deductions for the portion of your home expenses that relate directly to your business. 

Let’s break down the essentials so that you know what you might be able to claim on your tax return.

1. What Counts as a Home-Based Business?

A home-based business is one where a part of your home is used for business—whether that’s a dedicated study or even a corner in your living space. 

The key rule is: only the business-use portion of expenses is deductible.

2. Two Types of Expenses

• Running expenses cover day-to-day costs like electricity, internet, phone, cleaning, and repairs. You can claim these even if your workspace isn’t a distinct “office” room.
• Occupancy expenses include rent, mortgage interest, council rates, and insurance. These are only deductible if your workspace acts like a true “place of business”—for example, it’s used exclusively, clearly separate from your personal living space, or used by clients.

3. How to Calculate Your Expenses

The ATO offers a few easy-to-use methods—choose whichever best suits your situation:

• Fixed-rate method: Claim 70 cents per hour worked from home. This covers energy, phone, internet, stationery, and computer consumables. Just keep a record of your working hours.
• Actual cost method: Claim your actual expenses (but only the business portion), provided you have the receipts to back it up.
• Floor area method: If you have a designated workspace, apportion occupancy costs based on the floor area used for business and the time it’s used.

4. Other Important Considerations

• Depreciation: You can separately claim depreciation for business-use items like laptops, phones, or office furniture—regardless of whether you use the fixed-rate method.
• Capital Gains Tax (CGT): If you sell your home and have claimed occupancy expenses, a portion may not be covered by the main residence exemption.
• Records: Keep detailed records—including diaries of hours worked (if using fixed-rate), receipts, and calculations—for at least five years.
  

Understanding and claiming the right home-based business deductions can mean real savings—if you do it the right way. Keep it simple: choose the method that works best for your business, track everything, and only claim your fair share of the expenses.

Your accountant can help you choose the best method for your situation and ensure you’re both compliant and maximising your entitlements. Why not speak with one of our trusted team, and find out how we can help you and your business today?