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1.
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Proposed new instant tax deduction for work-expenses
From 1 July 2026, eligible individuals may be able to claim a flat $1,000 instant deduction for work-related expenses without substantiation, following the release of exposure draft legislation by Treasury.
Under the draft Bill, the income tax law will be amended to:
- introduce a standard deduction of up to $1,000 for Australian tax residents who derive income from employment from 1 July 2026;
- retain the existing work-expenses deduction rules for taxpayers who:
- incur more than $1,000 in work related expenses; or
- earn only business or investment income
- allow certain deductions to be claimed in addition to the standard deduction, including investment expenses, charitable donations, and union and professional association membership fees;
- prevent taxpayers from obtaining a double benefit, including by salary packaging expenses covered by the standard deduction; and
- update substantiation requirements and capital allowance rules to support the new regime.
Where a taxpayer chooses to claim and substantiate actual work related expenses exceeding $1,000, the instant deduction is reduced to nil.
Consultation on the draft legislation recently closed on 1 May 2026. If enacted, the instant tax deduction will apply from the 2026-27 income year.
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Instant tax deduction – exposure draft - Consult hub
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2.
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Proposed reforms to TPB sanctions regime
The Tax Practitioners Board (TPB) may soon have significantly expanded regulatory and enforcement powers, following the release by Treasury of exposure draft legislation proposing major amendments to the TPB sanctions regime.
The draft legislation proposes to:
- introduce criminal penalties for unregistered tax return preparers;
- increase the maximum civil penalty amounts;
- allow the issue of infringement notices for alleged breaches of certain civil penalty provisions;
- enable the TPB to accept enforceable voluntary undertakings;
- allow contingent and interim suspensions of registration in specified circumstances;
- introduce new civil penalties for:
- breaches of the Code of Professional Conduct by registered tax practitioners; and
- false or misleading statements by unregistered preparers; and
- extend the maximum period before a terminated practitioner may reapply for registration from 5 years to 10 years.
The draft legislation builds on the 2019 independent review of the TPB and the Tax Agent Services Act 2009, and the 2025-26 Federal Budget announcement to strengthen tax practitioner regulation and compliance, and the TPB's own review in July 2025 of its sanctions and registration framework. These reforms represent a material expansion of the TPB's enforcement toolkit and tax practitioners should review the exposure draft closely.
The proposed measures are intended to apply to conduct occurring on or after commencement of the enabling legislation, which will commence on the first 1 January, 1 April, 1 July or 1 October following Royal Assent.
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Tax Practitioners Board sanctions reforms – draft legislation - Consult hub
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3.
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ATO issues Interim Decision Impact Statement following Full Federal Court decision in FCT v Hall – WFH Expenses
On 29 April 2026, the ATO issued an Interim Decision Impact Statement (DIS) following the Full Federal Court’s decision in FCT v Hall [2026] FCAFC 43 (Hall). In Hall, the Federal Court confirmed that an employee required to work from home during COVID-19 lockdowns was not entitled to deductions for occupancy expenses (a portion of rent) or car expenses for travel between home and his employer's studios.
Facts
The taxpayer was employed by ABC as a sports presenter and producer. During COVID19 restrictions he performed 75% of his duties (the production role) from home during mandatory lockdowns, and the remaining live broadcast duties at the ABC studios. The Administrative Review Tribunal (ART) had previously allowed deductions for occupancy expenses and car expenses for travel between home and the studios. However, the Full Federal Court allowed the ATO’s appeal on both issues.
Federal Court decision
The Court denied the taxpayer's deductions for rent on the basis the that the essential character of the rent was to secure domestic accommodation, and it was not permissible to apportion rent by reference to a bedroom used for work. The Court also rejected the argument that the taxpayer was "at work the entire time" when travelling between home and the studios, confirming that the travel expenses remained private in nature.
ATO view
In the Interim DIS, the ATO confirms that Hall supports its existing views in TR 93/30 (home office expenses), TR 2021/1 (employee travel expenses) and the Employees guide for work expenses.
The DIS also emphasises that:
- setting aside a room for work during COVID19 lockdowns does not of itself entitle an employee to deduct part of their rent; and
- performing some work duties at home does not render travel to a regular workplace deductible.
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Commissioner of Taxation v Hall [2026] FCAFC 43 (Published 29 April 2026) | Legal database
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4.
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Key superannuation rates and thresholds for 2026-27
The ATO has published the superannuation rates and thresholds applying for the 2026-27 income year. The key figures relevant to employers, employees and advisers are summarised below.
Contribution caps and limits
- Superannuation guarantee (SG) rate: 12%
- Maximum superannuation contributions base: $270,830
- Concessional contributions cap: $32,500
- Non concessional contributions cap: $130,000
- General transfer balance cap: $2.1 million
- Capital gains tax (CGT) cap amount: $1.935 million
Bring-forward rule thresholds
- Total superannuation balance (TSB) less than $1.84 million: $390,000 over three years
- TSB $1.84 million to $1.97 million: $260,000 over two years
- TSB $1.97 million to $2.1 million: $130,000
- TSB $2.1 million or more: non-concessional contributions not permitted
Government cocontribution
- Maximum cocontribution: $500
- Lower income threshold: $49,293
- Upper income threshold: $64,293
Employment termination and redundancy payments
- ETP cap (life benefit and death benefit termination payments): $270,000
- Tax free redundancy and early retirement scheme limits:
- Base amount: $13,598
- Plus $6,801 for each completed year of service
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Key super rates and thresholds | Australian Taxation Office
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ART largely denies pharmacist’s work related expense claims
The ART has largely rejected a regional Queensland pharmacist’s claim for mobile phone, travel, vehicle, accommodation and meal expenses, allowing only a limited deduction for mobile phone costs.
The taxpayer lived in Brisbane and worked weekdays in Eidsvold and weekends in Gympie, with accommodation provided in Eidsvold during the week. The taxpayer sought to argue that his weekend work was temporary locum employment and that associated travel and living costs were deductible. The ART rejected this characterisation, finding the Gympie engagement was ordinary employment and that travel between locations occurred before duties commenced, making the expenses private in nature.
The ART accepted that the taxpayer’s mobile phone was used for work, given his hearing impairment and reliance on databased communication. However, due to inadequate evidence of work-related usage, the ART allowed only 36% of mobile phone expenses, consistent with other expenses previously accepted by the Commissioner. Claims for car expenses were denied after the ART found the logbook unreliable and overstated, and accommodation and meal expenses were denied as private or domestic in nature.
The decision highlights the importance of clear substantiation, accurate records, and the limited scope for deductions where travel is undertaken to commence, rather than in the course of, employment.
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Hui and Commissioner of Taxation (Taxation and business) [2026] ARTA 570 (24 March 2026)
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6.
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ATO flags key focus areas for Tax Time 2026
Ahead of Tax Time 2026, the ATO has flagged a compliance focus on work related deductions and omitted income.
Taxpayers claiming working from home deductions can use either the actual cost method (with full records) or the fixed rate method of 70 cents per hour, which covers common running expenses including internet, phone usage, electricity and stationary. The ATO recommends using the myDeductions feature in the ATO app to simplify recordkeeping and lodgement.
The ATO is also reminding taxpayers to declare all income, including side hustles, cash earnings, interest and rental income. With Payday Super commencing from 1 July 2026, taxpayers should also check that their super details and contributions are up to date.
Finally, the ATO has warned against relying on misleading tax advice, particularly from online sources, AI tools and ‘finfluencers’, urging taxpayers to rely on trusted and authoritative guidance. The ATO has emphasised that taxpayers remain accountable for ensuring the accuracy of their returns regardless of where advice was sourced.
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From 'hacks' to half-truths: ATO warns of tax time misinformation and reveals focus areas | Australian Taxation Office
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