Fuel Tax Credit Rate Changes from 1 April 2026
The ATO has updated the fuel tax credit rates that will apply from 1 April 2026, following a temporary 60.9% reduction in fuel excise. From 1 April to 30 June 2026, the heavy vehicle road user charge will be set to 0. Clients who use fuel in heavy vehicles for travel on public roads can claim fuel tax credits equal to the excise duty payable on that fuel.
ATO Payment Plans in Response to High Fuel Costs
The ATO is offering targeted support to eligible businesses that cannot meet their tax payment obligations due to high fuel costs. Applications are available until 30 June 2026.
Eligibility requirements:
To be eligible, you need to be an ABN holder and demonstrate that:
- Their increased business costs are directly or indirectly due to high fuel prices (including logistics, transport, or supply chain costs).
- They have a new or existing tax debt that they cannot pay.
- Their reduced capacity to pay is usually caused by high fuel prices, not a general business downturn.
- Their tax lodgments are up to date within 3 months of the plan starting.
Features of the payment plan:
- No upfront payment
- 36 equal monthly instalments over three years
- GIC remission from the date of application to the third instalment, if the first three payments are made and the lodgments are up-to-date.
How to apply:
- Via Online services for business, or
- By a registered tax or BAS agent with the client’s written authority
Practitioners with clients in fuel-sensitive industries should assess eligibility and consider applying before the 30 June 2026 deadline.
Payday Super
The ATO has released guidance on Payday Super changes that apply from 1 July 2026, including information on the concept of qualifying earnings (QE). Total QE for a pay period is calculated by adding up all qualifying payments made to or for an employee on the relevant day, which forms the basis for calculating superannuation guarantee contributions. From 1 July, employers need to ensure that super contributions reach super funds within 7 business days of the relevant payday, depending on the QE amount. Super funds will have 3 business days to allocate contributions or return any contributions that cannot be allocated.
The ATO also remind employers of their obligations under super fund stapling, aiming to reduce multiple super accounts and unnecessary fees by ensuring an employee’s existing super fund follows them between jobs. Employers need to offer new employees a choice of a super fund. If the employee doesn’t make a choice, the employer should request the employee’s stapled fund details from the ATO before making any SG contributions. Where a stapled fund is identified, contributions should be paid into that fund; if no stapled fund exists, contributions may be made to the employer’s default super fund.
Inherited Main Residence – Extensions to Two-Year Limit
The ATO has updated guidance on extensions to the 2-year time limit for the main residence exemption on inherited property.
Automatic extension (safe harbour, up to 18 months):
- Most of the first 2 years were spent sorting out issues like disputes over the will, legal interests that delayed the sale, or other estate complexities.
- The property was put on the market after these issues were resolved and actively managed until sold.
- The sale was completed within 12 months of listing.
- The delay was not caused by things like waiting for the right market conditions, inconvenience, renovating the property, or the executor’s inaction.
- The extension requested is no longer than 18 months.
If the automatic extension conditions are not met, a discretionary extension can be requested, but it is only approved in exceptional circumstances beyond the taxpayer’s control. The request should include supporting documents and a time from the date of death to settlement, explaining why the 2-year limit was not met. Practitioners must review estates where the 2-year limit is approaching or has passed and check if the automatic 18-month extension applies before asking for a discretionary extension.
Increased Visibility for Family Trust Elections
The ATO has improved Online Services for Agents to make it easy to monitor family trust elections and interposed entity elections. You can now see:
- The date the ATO received the election
- The type of form, such as a new election, a revocation, or a variation
- For revoked elections, the final year of the election and the date it ended.
Base Rate Entity Status
The ATO has noted that companies usually apply base rate entity (BRE) status incorrectly in their tax returns. A company can only qualify as a BRE if both of these conditions are satisfied:
- Total turnover is under $50 million (for 2018-19 onwards)
- Base rate entity passive income is no more than 80% of the company’s assessable income
Common mistakes to watch for:
- Connected and affiliated entities: All related entities must be included when calculating total turnover.
- Capital gains: Net capital gains should be considered passive income, even from active assets. Only gains that are excluded from net capital gain calculations can be left out.
- Passive income types: Income such as royalties, rent, certain dividends, and interest must all be included; these are often overlooked.
- Annual reassessment: BRE status should be reviewed every year, since changes in turnover, income mix, group structure, or shareholders can affect eligibility.
- Passive income test required even under $50 million: Even if turnover is clearly below the threshold, companies must still calculate passive income to confirm BRE eligibility.
Modernisation of Tax Administration Systems (MTAS) Program
The ATO has issued guidance on the Modernisation of Tax Administration System changes, which apply from 1 July 2026 for tax agents, beneficiaries, and trustees. Some additional changes have been announced but are not yet law.
- New labels in trust tax returns: The labels (B1, U2, H1) will capture amounts from managed investment schemes, franking credits from investments, and foreign source income from financial investments. This helps calculate net financial investment loss in beneficiary returns.
- Better pre-lodgment checks: The system will flag common errors before lodgment, reducing the chance that the ATO needs to contact trustees.
- Simpler lodgment: Less additional information will need to be lodged separately from the trust return.
- Pre-fill for beneficiaries: Trust distribution data will be available in pre-fill for individual beneficiaries once the trust return is processed. Agents and trustees are encouraged to submit early.
- Beneficiary review: Beneficiaries must check that the pre-fill information in myTax matches their distribution statement.
From Tax Time 2027 (2026–27 returns):
The ATO has introduced further MTAS changes to make trust reporting more accurate.
- New statement of distribution labels to cover unpaid present entitlements and adjustments for franked distributions and capital gains.
- Simpler reporting for non-resident beneficiaries, including interest, unfranked dividends, royalties, and withholding tax, without needing a separate additional information schedule.
- Improved reporting for family trust elections (FTEs) and interposed entity elections (IEEs), requiring specified individual details to be included in the trust tax return.
- Pre-fill extended to non-individual beneficiaries, such as companies, partnerships, trusts, and super funds.
- New online lodgment option in Online Services for Business, allowing self-preparer trusts with an ABN to lodge electronically.
- Future change (subject to legislation): the separate TFN report for closely held trust distributions is proposed to be replaced by reporting the beneficiary TFN directly in the statement of distribution.