Penalties for Outstanding Superannuation Obligations

Penalties for Outstanding Superannuation Obligations

Penalties for Outstanding Superannuation Obligations

Are your Superannuation Obligations up to date?

With the introduction of Single Touch Payroll, the ATO will receive live data of your employee obligations and will be aware of any unpaid Superannuation Guarantee Contributions (SGC).

The ATO proposed to waiver penalties under their Superannuation Guarantee Amnesty which has not yet passed parliament and is yet to become law.

The Amnesty would allow employers who have unpaid (SGC) between 1 July 1992 and 31 March 2018, to make a voluntary disclosure prior to the 23rd of May 2019 without penalty.

If you have unpaid SGC for this period, you should consider making a voluntary disclosure to reduce your risk of penalties.

Employers who don’t make a voluntary disclosure prior to the 23rd of May 2019 will face severer penalties, with the introduction of new legislation being passed earlier this month.

The new legislation will allow the commissioner to issue a direction to an employer to;

  • Pay their outstanding superannuation obligations
  • Complete an approved education course
  • And receive penalties or imprisonment for 12 months (in serious cases), or both.

Below is an example (provided by the ATO), of the potential penalties an employer may face for unpaid SGC obligations;

Key Note:

  • The above example does not include ATO penalties as these vary case by case.
  • The SGC was calculated on the full wage, not just ordinary time earnings.
  • The SGC paid is non-deductible to the business because it is paid late.
  • The ATO may issue a Director Penalty Notice making the Director personally liable for the debt.

We strongly recommend that employers rectify an unpaid SGC obligations as soon as possible, to avoid any potential penalties in the future.

If you are unsure how to determine the amount outstanding or how to go about payment, please contact us; we are more than happy to assist you.

We are here to help you through the process!

The new legislation is awaiting Royal Assent, with the legislation to take effect from 1 April 2019, but will apply to SGC obligations arising from 1 July 2018.

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Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
E: info@plus1group.com.au

March Practice Update

March Practice Update

Practice Update – March 2019 Edition

Changes to the Small Business Instant Asset Write-Off

On 29 January 2019, the Prime Minister announced that legislation will be introduced to:

  • extend the small business instant asset write-off by 12 months to 30 June 2020; and
  • increase the write-off threshold from less than $20,000 to less than $25,000 (effective immediately).

The current threshold of $20,000 has applied since 7.30pm AEST on 12 May 2015 and was due to revert to $1,000 on 1 July 2019. 

Under the proposed changes, from 29 January 2019 until 30 June 2020, small businesses with an aggregated annual turnover of less than $10 million may claim an immediate deduction for the business-use portion of each depreciating asset costing less than $25,000.

Example

To illustrate, assume an individual acquires a van for $22,000 (excluding GST entitlements) on 1 February 2019.

The individual is a small business entity and estimates the van will be used 90% for the business and 10% for private purposes.

Under the current rules, while the business-use portion of the cost of the van is less than $20,000 (i.e., $22,000 x 90% = $19,800), an immediate deduction is not available because the entire cost is $20,000 or more. 

However, the van may be depreciated as part of the taxpayer’s SBE small business pool.

In contrast, an immediate deduction of $19,800 may now be claimed under the proposed changes, as the entire cost of the van is below the new threshold of $25,000. 

This measure is expected to benefit more than 3 million eligible small businesses.

Editor: On 13 February 2019, the Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 was introduced in the House of Representatives.

Once this Bill becomes law, it will open up opportunities for small businesses to claim an immediate deduction for depreciating assets (where they cost less than $25,000) up until 30 June 2020.


Tax Scammer Alert

The ATO has again warned taxpayers to be alert for scammers impersonating the ATO, as it appears they have changed tactics in 2019.

Specifically, the ATO is seeing the emergence of a new tactic where:

“scammers are using an ATO number to send fraudulent SMS messages to taxpayers asking them to click on a link and hand over their personal details in order to obtain a refund”.

The ATO has received reports of scammers maliciously manipulating the calling line identification so the phone number that appears is different to the number from which the call originated.

This is referred to as “spoofing” and is a common technique used by scammers to appear legitimate.

It appears these scams aim to steal taxpayers’ personal details and identities.

The ATO has advised it will not:

  • Send an email or SMS asking a taxpayer to click on a link to provide login, personal or financial information, or to download a file or open an attachment;
  • Use aggressive or rude behaviour, or threaten taxpayers with arrest, jail or deportation;
  • Request payment of a debt via iTunes or Google Play cards, pre-paid Visa cards, cryptocurrency or direct credit to a personal bank account; or
  • Request a fee in order to release a refund owed to taxpayers.

Editor: If you are unsure about a call, text message or email purportedly received from the ATO, the best advice is not to reply.

Should you have any concerns, please contact our office directly, or alternatively you can call the ATO on 1800 008 540 to check if the contact was legitimate or to report a scam.

Non-Compliant Payments to Workers

The rules for claiming deductions for payments to workers are changing.

From 1 July 2019, businesses can only claim deductions for certain payments made to workers where they’ve met the Pay As You Go (‘PAYG’) withholding obligation for that payment.

Specifically, a business can only claim a deduction for the following payments if it complies with the relevant PAYG withholding rules:

  • Salary, wages, commissions, bonuses or allowances to an employee.
  • Directors’ fees.
  • Payments to a religious practitioner.
  • Payments made under a labour hire arrangement.
  • Payments made for a supply of services (except from supplies of goods and real property) where the contractor has not provided their ABN.

Where the PAYG withholding rules require an amount to be withheld, the business must:

  • Withhold the amount from the payment before they pay their worker; and
  • Report that amount to the ATO.

Importantly, a deduction will not be lost if an incorrect amount is withheld (or reported) by mistake.

What’s New for Australian Business

The ATO has recently reminded small businesses of the expanded tax concessions potentially available to them, as outlined below:

  • The pending increase in the small business instant depreciating asset write-off to less than $25,000 (as discussed in further detail above).
  • Accelerated depreciation deductions for primary producers for eligible fodder storage assets, as well as for fencing and water facilities.
  • Assistance for primary producers impacted by drought at Drought Help, or by contacting the ATO on 1800 806 218.
  • A lower company tax rate of 27.5% for companies qualifying as a Base Rate Entity (‘BRE’).
  • Increased Small Business Income Tax Offset (‘SBITO’) for eligible sole traders and individual partners and beneficiaries.

Finally, the ATO has reminded taxpayers that more businesses are now eligible for most small business tax concessions.

Specifically, from 1 July 2016, a range of small business tax concessions became available to all businesses with an aggregated turnover of less than $10 million (i.e., the turnover threshold).

Previously the turnover threshold was less than $2 million.  The $10 million turnover threshold applies to most concessions, except for:

  • The SBITO – which has a $5 million turnover threshold from 1 July 2016; and
  • The small business CGT concessions – which continue to have a $2 million turnover threshold.

Note: The relevant turnover threshold for accessing the lower company tax rate is $50 million from  the 2019 income year (increased from $25 million in the 2018 income year).

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
E: info@plus1group.com.au

Drought Infrastructure Grant

Drought Infrastructure Grant

Drought Infrastructure Grant

A grant of up to $5,000 is available per farm business to assist farmers to make on farm infrastructure improvements to help with the management of drought or enhance the longer-term viability of the farm. Eligible businesses will be required to provide dollar for dollar co-contribution.

Examples of Eligible Improvements Include

  • Construction or upgrade of stock containment areas i.e. fencing/gates.
  • Reticulated water systems using pumps, piping, tanks and troughs for livestock.
  • Irrigation system upgrades.
  • Permanent repairs to fixed infrastructure i.e. irrigation pumps, repairs to piping, replace troughs, upgrade tanks.
  • Improved water infrastructure for stock management i.e. consolidating/enlarging farm dams.
  • Farm development to improve drought management efficiencies to farm production systems i.e. soil moisture monitoring, weather stations, telemetry sensor equipment.
  • Grain and fodder storage i.e. silos, silage bunkers, hay sheds.
  • Internal re-fencing to better match property layout with land capacity.
  • Fencing for the exclusion of wildlife to protect and manage crops and pastures.
  • Addition of shelter belts for shade and associated fencing.
  • Upgrading of areas to deliver to deliver better productivity and profitability i.e. laneway upgrades.
  • Feeding system upgrades i.e. feed pads or feed troughs.
  • Adoption of precision farming techniques i.e. auto-steer tramlining, yield mapping and weed-seeker technology.

To be Eligible you are Required to

  • Own, share or lease a farm business located in the following shires (Wellington, East Gippsland, Swan Hill, Gannawarra, Loddon, Campaspe, Greater Bendigo, Greater Shepparton, Moira, Strathbogie, Benalla, Wangaratta, Wodonga, Indigo, Alpine, Towong, Mildura, Hindmarsh, Yarriambiack, Buloke, Horsham or Northern Grampians).
  • Be registered as a primary producer with the ATO and have an ABN and be registered for GST.
  • Have a right or interest in the land for the purpose of primary production.
  • Contribute more than 51% of his/her labour to the farming enterprise.
  • Derive 51% of gross annual income from the farm business OR made a minimum farm related capital investment of $50,000 (excluding land) in the farm business.
  • As a guide farm turnover would exceed $50,000 per year under normal business conditions.

Please contact us if you would like further information or for us to complete an application form on your behalf. Please keep in mind this grant will close once all funding has been allocated.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
E: info@plus1group.com.au

Single Touch Payroll Update

Single Touch Payroll Update

Single Touch Payroll Update

Single Touch Payroll (STP) was introduced on 1st July 2018 for all businesses with 20 or more staff (substantial employers).

The Bill to extend the Single Touch Payroll (STP) reporting requirements to all employers, regardless of the number of employees has now passed the Senate and will be Law.

Smaller organisations with less than 20 employees are now required to comply with STP as of 1 July 2019.

What you need to know

STP will require you to report your payroll transaction data to the ATO each time your employees are paid.

The payroll or reporting system must be STP Compliant, so that the below details can be reported to the ATO every pay run.

  • Each employee’s name and tax file number (TFN)
  • Gross amount paid
  • Tax withheld on the gross
  • Ordinary time earnings for the period, and
  • Any superannuation guarantee obligations.

Concessions

Further concessions apply for employers with four employees or less (micro employers). These employers will be allowed to rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each payroll period.

The ATO recognises that some smaller clients may not have software systems currently in place. Therefore the ATO have granted a 3 month transition period until the 30th September 2019, to allow small employers (less than 20 employees) to find the right solution for their business.

The ATO have compiled a list of cost effective STP Solutions for micro employers and can be found here.

What to do now

If your software is already automated that can provide the above listed information every per pay cycle, all you need to do is confirm if your product is STP compliant.

If your system is still manual it is now time to discuss your reporting options to avoid any penalties in the future.

In the event that you need a software solution or want to review your current reporting system, we are happy to discuss the most cost effective solution for you.

We are here to help you through the process, so please do not hesitate to contact us.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
E: info@plus1group.com.au

Bank Details Scam

Bank Details Scam

Bank Details Scam

SCAM ALERT – Changes to bank details sent by email

Fraudsters are now monitoring websites or emails and using tricks to mimic usernames & signatures.  These spoofing tools to make it appear as if the email has come from you/your business.
They then send emails out advising that the bank details have changed and that the customer needs to update the records urgently.

There have been a number of cases locally where businesses have been caught up in these scams. The emails appear legitimate and may even have the name of a company employee, Director or Owner.

We strongly recommend that you always verify any information sent in this way. The most secure way to do this is a quick phone call to the supplier asking them to confirm their details. Often, they may not even be aware their emails have been compromised in this way.

Scammers now changing business invoices containing bank details

Fraudsters are constantly making their crimes sophisticated. Their latest efforts involve phishing emails allowing them to hack your personal or business email accounts.

They then monitor your email account for an opportunity to intercept an invoice. For example, when you are purchasing goods and awaiting on an invoice or email, or if your business is sending an invoice by email.

The scammers intercept the email, change the bank details on the invoice and send it on for payment. In many cases, they use spoofing to make the email address seem credible and trustworthy. Spoofing changes a letter or domain in the email address to make it appear legitimate.

The recipient pays the invoice thinking it comes from a legitimate source, when in fact the money is paid into the scammer’s account.

Advice from Plus 1 Group regarding bank details

Please be aware that should our banking details change we will NEVER communicate this via email.

Should you ever receive any email announcing a change in bank details or notice that our details have changed on our invoice, please contact us immediately to verify you are sending payment to the correct bank before you pay.

We have taken this step to secure our business and strongly recommend to our clients that they do likewise. One of the simplest steps your business can take is to always verify any change of bank details for employees, customers or suppliers by phone. If you reply to the email sent to you to verify the request, you would just be sending it back to the scammers.   

If you would like any further information, please contact our office on 5833 3000.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
E: info@plus1group.com.au

Fuel Tax Credits Update

Fuel Tax Credits Update

Fuel Tax Credits Update – February 2019

The fuel tax credit rates below have changed, effective 4 February 2019. Different fuel tax credit rates will need to be claimed for fuel acquired before and after February 4.

Fuel purchased for on-road use in eligible heavy vehicles
New rate: 15.8 cents per litre (previously 15.4 c per litre).

Fuel purchased for powering auxiliary equipment
New rate: 41.6 cents per litre (previously 41.2 c per litre).

For fuel tax credit rates lists please click here.
For the ATO fuel tax credit calculators please click here.

Please call our office should you have any queries.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
E: info@plus1group.com.au