Recent Tax Updates
SINGLE TOUCH PAYROLL – ARE YOU ON BOARD?
Some employers are still not aware that as of 1 July 2019 all employers other than closely held payees were required to use Single Touch Payroll (STP) to report tax and super information to the ATO.
Closely held payees are defined as small employers (19 or less employees) with closely held employees. A closely held employee is one who is not at arm’s length for example family members of a family business, directors or shareholders of a company and beneficiaries of a unit trust. They will need to be reported through STP from 1 July 2020 and will have the option of reporting their closely held payee information quarterly.
The ATO also has options to assist micro businesses who have 1-4 employees and need more time to move to the STP system. If this is you, you are able to report through your registered tax agent on a quarterly basis until 30 June 2021.
If you have any questions or need assistance setting up your Single Touch Payroll system, please contact our office.
PROPOSED REFORM OF DIRECTOR PENALTY NOTICES (DPN) AND ESTIMATES FOR GST
In early 2019 the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 (Phoenixing Bill) was introduced into Parliament proposing to extend existing director liability and DPN provisions for unpaid PAYG withholding amounts and SGCs to GST debts.
The proposed changes will allow the Commissioner to make an estimate of an entity’s net amount in their Business Activity Statement. If the Commissioner makes an estimate, the entity is liable to pay that amount to the Commissioner and the director has 21 days to ensure the amount is dealt with to avoid becoming personally liable.
Company directors will be obligated to pay a Commissioner assessed net amount on the day the relevant tax period ends. Directors that cease to be directors after this date are subject to this obligation even if they cease to be directors before the due date. Any new directors appointed will also become subject to the penalty if the obligation remains unsatisfied for a further 30 days.
Directors who fail to lodge a BAS within three months of the lodgement due date will receive a lockdown DPN. This means the directors are automatically liable to the ATO for the unpaid GST and will not be entitled to remittance of a DPN penalty if the company then goes into liquidation.
If you receive a notice you should obtain immediate advice to understand what options are available to you. Given the strict time limits that apply, failure to act upon receipt may mean the option for remission is lost.
To deal with this new level of personal risk, directors should take the necessary steps now to ensure that the GST affairs of their companies are in order and identify any potential exposure. We recommend that directors seek specialist advice where issues are complex, and the GST treatment is uncertain.
Please contact our office if you have any queries.
ATO HIT LIST FOR 2019
The ATO annually releases a list of areas of particular interest when reviewing income tax returns for the relevant financial year. This year on the ATO hit list is work-related expenses. These expenses often have a small individual price tag, but given the volume of individual tax returns, this compounds heavily, and it is reported that the tax gap between taxes paid and taxes owed but not paid is as high as $8.7 billion dollars for individuals.
The ATO has listed the following deductions as being high on the ATO’s agenda this year:
· Claims for work-related clothing
· Deductions for home office use
· Overtime meals claims
· Union fees and subscriptions
· Mobile phone and internet costs
· Motor vehicle claims where taxpayers take advantage of the 68 cent per km flat rate for up to 5,000km
· $300 dollar or less deductions without receipts
To ensure that you are claiming your deductions correctly, please do not hesitate to contact our office for assistance.