June 2019 Newsletter

SINGLE TOUCH PAYROLL IS COMING

Single Touch Payroll (STP) is a change to the way you report your employees' tax and super information to the ATO.

From 1 July 2019 every time you pay your employees, you will need to report their salary and wage, pay as you go (PAYG) withholding and super information through STP ready payroll software any time from 1 July to 30 September 2019. You can choose to start reporting earlier if you have an STP ready product.

If you do not use payroll software there will be available No-cost and Low-Cost payroll solutions. Contact us if you require further information.

The basics of STP reporting.

With STP reporting, employers will:

• No longer need to provide payment summaries to employees for payments reported through STP;

• No longer be required to provide payment summary annual reports to the ATO at the end of the financial year;

• Need to report employee's super liability information for the first time through STP. Super funds will then report to the ATO when the employer pays the super amounts to the employee's funds; and

• Will be required to complete a finalisation declaration at the end of each year.

Employees will be able to view their year to date payment information using the ATO's online services, which is accessible through their myGov Account or they can ask the ATO for a copy of this information.

From 2020, the ATO will prefill some activity statement information for small to medium withholders with the information reported through STP.

Alternatively, you can find out more information about STP, including a list of STP software providers at ato.gov.au/singletouchpayroll

END OF YEAR SUPER DEDUCTIONS

If you are using electronic superannuation through an accounting package and are wanting to claim a deduction on super accruals for the 2018-2019 financial year, make sure you’ve allowed enough time for the contributions to reach the super funds. We recommend that electronic superannuation requests be submitted and approved no later than 20 June 2019 to allow them to be processed prior to 30 June 2019.

SUPER GUARANTEE COMPLIANCE: TIME TO TAKE ACTION

The government's latest initiatives targeting non-compliance with superannuation guarantee (SG) obligations give businesses plenty to think about. With Single Touch Payroll being implemented all employers should take time to review their arrangements for paying employees' super.

The government is proposing a 12 month "amnesty" for employers to voluntarily disclose and correct any historical underpayments of SG contributions for any period up to 31 March 2018 without incurring penalties or the usual administration fee. This is provided the ATO has not already commenced a compliance audit of that employer. Additionally, employers will be entitled to claim deductions for the catch-up payments they make under the amnesty.

2019/2020 BUDGET UPDATE

The Government handed down the 2019/2020 Federal Budget on Tuesday, 2 April 2019.

Some of the important points are as follows:

• Increasing the instant asset write off threshold from $25,000 to $30,000. The threshold applies on a per asset basis, so eligible business can instantly write-off multiple assets.

• The instant asset write-off will be available to medium sized business (with aggregated annual turn-over of $10 million or more, but less than $50 million).

It is proposed, however not legislated at this time, to allow individuals aged 65 and 66 to:

• Make voluntary superannuation contributions (both concessional and non-concessional) without meeting the "work test" from 1 July 2020; and

• Make up to three years of non-concessional contributions under the "bring forward" rule (without satisfying the work test).

ATO REVIEWS LAUNDRY CLAIMS

The ATO will be targeting false clothing and laundry work-related expense claims this tax time. In order to claim "you must have spent the money you re claiming on buying or cleaning eligible clothes". While you do not need to keep a receipt for claims up to $150 the ATO can ask how you calculated your claim. They may even ask your employer if you have a required uniform.

The ATO has also revealed it is concerned about people claiming deductions for conventional clothing, in particular retail workers claiming normal clothes because their boss told them to wear a certain colour. An office dress code does not qualify as a uniform and you cannot make a claim for normal clothing.

The ATO also cautioned that its sophisticated data analytics is constantly improving and can identify unusual claims by comparing claims to others in similar occupations.

If a taxpayer is unable to substantiate their claim they should expect to have them refused, and could also be penalised for failing to take reasonable care when submitting a tax return.

INCREASE TO MOTOR VEHICLE SET RATE

The ATO have advised that the cents per kilometre rate has increased to $0.68 per kilometre from 1 July 2018.

ATO PAYMENT PLANS

Business eligibility

When assessing if a business or individual is eligible for a payment plan, the ATO focuses on the ability of the taxpayer to pay its debts and meet ongoing commitments. To assess this, the ATO considers various indicators including asset/liability position, gross margin and cash flow.

The ATO might also ask you other questions relating to how you intend to pay the instalments and how often you can pay, what have you done to avoid further debt, how the debt arose and your average monthly income and expenses.

Conditions to payment arrangements

Once an arrangement has been reached with the ATO there are several conditions that apply. General interest charges will accrue until the debt is paid.

Please be aware that all ATO payment plans are conditional upon you meeting your future obligations on time and in full.

Setting up a payment plan

If you are an individual or a sole trader and you have an income tax or activity statement debt of $100,000 or less, you may be able to set up a payment plan using online services (/General/Online-services/Individuals-and-sole-traders/)

Alternatively, you can use the 24/7 automated phone service on 13 72 26 for businesses or 13 28 65 for individuals or you can phone the ATO on 13 11 42 during available hours to discuss a payment plan.