Effective from 1 April 2026, these measures are designed to provide immediate financial relief and improved cash flow flexibility for eligible businesses impacted by increased fuel expenses. Alongside a temporary reduction in fuel excise and adjustments to fuel tax credit rates, the ATO has launched a dedicated Fuel Response Plan to help affected taxpayers manage their tax obligations during this period of heightened cost pressure.

ATO options for impacted taxpayers

The ATO is offering streamlined access to a new temporary Fuel Response Plan in response to the impact of higher fuel prices on businesses.

Who may be eligible

Your business may qualify if you are an ABN holder and meet the following criteria:

• operating costs have increased directly due to higher fuel costs, or indirectly due to higher transport, logistics, or other supply chain costs
• you have incurred a new tax debt or are finding it difficult to meet existing payment arrangements
• you can demonstrate a reduced capacity to pay specifically as a result of increased fuel costs (separate to a general downturn in business or ordinary cash flow issues)
• all tax lodgements are up to date or will be brought up to date within three months.

Key features of the plan

The Fuel Response Plan includes a number of flexible support measures designed to assist with cash flow management, including:

• no upfront payment required
• up to 36 months to repay
• possible remission of General Interest Charges (GIC), subject to satisfying conditions
• equal monthly instalments to assist with cashflow management.

How SW can help

Navigating ATO support measures and determining eligibility can be complex, particularly where multiple financial pressures are involved. Our team can work with you to assess whether your business qualifies for the Fuel Response Plan, taking into account your specific circumstances and cash flow position.

We can also assist in preparing and lodging the applications with the ATO, including remissions of GIC, liaising on your behalf to streamline the process and improve the likelihood of a successful outcome. In addition, we can help you review your broader tax position, manage existing payment arrangements, assisting with cashflow forecasts and implement strategies to reduce business overhead costs, support cash flow and ongoing compliance during this period.

If your business is experiencing pressure from rising fuel costs, we encourage you to contact one of our experts to discuss how we can support you.

Contributors

Dee Newman

Nuwani Jayaweera

The post How the ATO’s Fuel Response Plan can support your business in 2026 appeared first on SW Accountants & Advisors.

On 15 December 2023, the ATO released the following two draft publications for public comment:

• Draft TR 2022/D3 – Income Tax – PAYG withholding – Who is an employee
• Draft PCG 2022/D5 – Classifying workers as employees or independent contractors – ATO compliance approach.

Draft TR 2022/D3 replaces TR 2005/16 from 15 December 2022 and has mainly been updated to reflect recent court cases.

Key features of ATO draft publications

A business’ employment tax obligations can vary based on how a worker is classified. Correct classification is important to ensure that both the business and the worker satisfy their tax and superannuation obligations correctly.

TR 2022/D3 – Who is an employee?

The draft TR 2022/D3 explains the meaning of “employee” for PAYG withholding purposes. In accordance with the earlier High Courts cases, the Commissioner states:

• the totality of the contractual arrangement between parties will determine the classification of the worker, and
• the substance of the contractual arrangement, rather than the labels used in it, will be of primary importance.

The Commissioner has emphasised that even if a worker is an independent contractor, Superannuation Guarantee (SG) may be payable if the worker satisfies the extended definition of an employee under SG rules.

PCG 2022/D5 – Classification of workers

The draft compliance guide PCG 2022/D3, provides the Commissioner’s approach to audit activity based on a business’s risk profile, where he believes that the classification of workers is not being applied correctly. The key components considered by the Commissioner when determining the risk profile are:

Very Low risk – arrangements that satisfy all the following criteria will be considered low risk and will not attract ATO compliance activity:

• the parties agree on and understand the intended classification
• the substance of the arrangement agrees to the contractual terms
• the classification has been supported by advice from a qualified professional.

It will also be considered very low risk when an employer decides to voluntarily treat all workers as employees.

Low risk – Arrangements that satisfy all the following criteria will be considered low risk and will not attract ATO compliance activity:

• The parties agree on the intended classification.
• The substance of the arrangement agrees to the contractual terms.
• The classification has been supported by advice from a qualified professional.

Medium risk – Arrangements that satisfy the following criteria will be considered medium risk

• The parties agree on the intended outcome.
• The classification has been supported by advice from a qualified professional.

High risk – All arrangements that do not satisfy very low, low or medium risk criteria will be considered high risk. They will also be considered high risk if one of the parties coerced the other to accept the arrangement or one of the parties made false or misleading representations to the other party.

Key takeaways to minimise risk of ATO review

1. It is important for businesses to discuss the tax implications of being an independent contractor with the worker.
2. Obtain professional advice to support the position adopted for the class of workers.
3. When an arrangement with a worker changes, businesses should re-assess their classification.
4. Where disgruntled worker lodge an unpaid superannuation query and the ATO determines that the arrangement is considered:
   • very low risk – they will advise the worker accordingly and not take any further action
   • low risk – the ATO will apply compliance resources to test if that worker satisfied the definition of an employee
   • medium risk – the ATO will apply compliance resources to an arrangement (e.g. for a group of workers)
   • high risk – Compliance resources will be given the highest priority to an arrangement (e.g. for a group of workers) and businesses may be subject to higher penalties.
5. This PCG does not provide employers protection from payroll tax and workcover classification of workers.

How SW can help

Reach out to your SW contact or our team to assist in ensuring your employees are classified correctly to minimise the risk of an ATO review.

Contributors

Rahul Sanghani

Sabrina Camilleri

The post Employees vs Contractor ATO risk ratings now out appeared first on SW Accountants & Advisors.