Deloitte Private partner Liz Westover has said it is very important that employers allow up to 10 days when using superannuation clearing houses to make contributions to a super fund.
Being the end of June, if clients had previously relied on a particular clearing house, it might be worthwhile finding another method of paying those contributions.
Ms Westover said at the Chartered Accountants Australia and New Zealand SMSF Day 2019 Workshop that “I always warn people about the use of clearing houses. They can be very useful for processing or distributing monies, it’s one payment and they disseminate all the information and monies to the super fund, but the fine print states that it can take up to 10 days to actually process those contributions.”
“I have seen people getting caught out by this one. They think that their Super Guarantee (SG) obligations are met on payment to the clearing house; it’s not. Your obligation for SG is met when the money hits the super fund.”
“So, if you’re relying on clearing houses, make sure you’re allowing for these 10 days. If you’re talking about the 28th day after the end of the quarter, you’ll actually need to meet those obligations by the 18th to make sure you’re meeting those obligations.”
In the lead-up to end of the financial year, Ms Westover said it is also important for SMSF members to confirm their employer contributions if they’re thinking of making personal super contributions so that they don’t inadvertently breach their concessional contributions cap.
“The real catch is that if you’ve got an employer who needs another tax deduction. So, I’ve seen situations where they will bring forward the contribution that they would normally make in July and they bring it forward to June so that they get the additional tax deduction in June; that will impact on people’s ability to make personal contributions,” Ms Westover explained.
“In previous years, it probably didn’t matter so much because people were ineligible to make personal super contributions due to the old 20 per cent rule, but now that they can, you need to be a little bit more alert to how those employer contributions are going in and what cap space you actually have for personal contribution.”
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Helen Feulufai, a 27 year old Crestmead chef, was convicted in the Brisbane Magistrates Court for falsifying her income tax return when she claimed refunds over three years amounting to more than $45,000 from the ATO.
Ms Feulufai was employed as a chef at a Queensland hospital when she was convicted of three criminal offences for fraudulently claiming charity donations in her 2016 to 2018 financial year income tax returns. Equipment including a full work uniform including personal protective equipment and tool were supplied by her employer and in her capacity as a chef, Ms Feulufai was not required to travel or use her own motor vehicle.
The information Ms Feulufai provided showed total claims for $16,970 in the 2016 financial year, $14,417 in the 2017 financial year and $13,691 in the 2018 financial year.
Ms Feulufai has been ordered to repay the refunds, as well as a $3,000 fine and an additional $20,000 to the tax commissioner and to cover court costs.
Ms Feulufai had previously undergone two audits in 2012 and 2014 for attempting to claim similar deductions. Both occasions, she was sent audit finalisation letter and provided education with regard to the valid deductible expenses for travel, vehicle and charitable donations.
ATO assistant commissioner Peter Vujanic states that “this case also serves as an important reminder that you must be able to provide valid deductible expenses in your income tax return, including travel and clothing expenses as well as any charitable donations.”
“Taxpayers who can’t substantiate their claims should expect to have them refused, and may be penalised for failing to take reasonable care when submitting their tax return.
“Even if you lodge through a tax agent, your claims must be legitimate and you must be able to justify them if you asked to by the ATO. If you intend to push the boundaries, or perhaps fudge some parts of your return, the ATO has you in it’s sights.”
The ATO will be extra careful this year after they revealed an $8.7 billion gap caused by incorrect claims for deductions for work-related expenses and omitted income.
In 2018, over 3.6 million people made a work-related car expense claims totaling more than $7.2 billion. In addition, around six million people claimed work-related clothing and laundry expenses totalling nearly $1.5 billion.
PaysOnline’s outsourced payroll solution can help you and your employees remain as compliant as possible. Contact us today to see how payroll should be.
The Australian Taxation Office has announced that any unreported cash in hand payments made to workers from the 1 July 2019 will not be tax deductible.
In addition, any payments made to a contractor who has not provided an ABN and does not withhold tax will also not be tax deductible from 1 July.
Matthew Addison, an executive chair for the Institute of Certified Bookkeepers said that the “focus does not mean cash payments are no longer allowed but is rather about unreported payments.”
“If it is for wages then PAYG must be considered and super must be considered but you are allowed to pay in cash, as long as it is reported according to the law,” said Addison.
“The issue is about unreported cash payments. If you don’t withhold when you should, and if you don’t report when you should then no deduction.”
PaysOnline’s outsourced payroll system can help you remain compliant. Contact us today for a tailored solution for your business.
Cybercrime is something that should be taken seriously, particularly in businesses that handle important and personal data. As the internet becomes easier to access and we begin sharing more information online it is integral to have security measures in place, for many this includes the data your business creates and store, plus the information your customers share.
Steve Ingram, an Asia Pacific Cyber Lead at PWC describes in their 2018 report that while “technology has been an agent for us improving the efficiency of our economy.” It has also become a “great tool for organised crime” with criminals using technology to steal identities and use the information in a fraudulent manner.
The data from the PWC’s report presents a picture of Australian companies engaged in a constant struggle to prevent data breach attacks. It’s a “neck and neck race,” Steve Ingram commented. “The thing with crime is that you rarely get ahead of the curve. You have to keep pace. There’s no end game here. We just need to be forever vigilant.”
David Simmon in his article, “Are Businesses taking the threat of cybercrime seriously?” echoes the sentiment, showcasing how the recent attacks on sites including Princess Polly, Canva and Kathmandu are just a few prime examples of how businesses keep falling victim to these sophisticated cybercriminals exploiting vulnerabilities in digital systems.
Businesses need to consider how being victims of cybercrimes can negatively affect their reputation and the immediate effect of losing customer trust and revenue. At PaysOnline, data security is a number one priority. With access to you and your employees personal data, we believe it’s integral to take every step available to secure your most valuable information; as such, we have become ISO 27001 certified for Information and Data Security.
Business News Australia believes cybercrime will cost the world in excess of US$6 trillion annually by 2021, up from US$3 trillion in 2015. So, considering all the detrimental effects of cybercrime, are businesses taking the threat of cybercrime seriously? Apparently not.
According to the board director of international IT governance association ISACA Greg Touhill cybercrimes are being vastly underreported but growing in volume.
“Underreporting cybercrime even when disclosure is legally mandated appears to be the norm, which is a significant concern,” says Touhill, referencing the ‘2019 State of Cybersecurity Study’ commissioned by ISACA.
“Half of all survey respondents believe most enterprises underreport cybercrime, even when it is required to do so.”
According to an ASACA Report, the top three threat factors are cybercriminals, hackers and non-malicious insiders and Refinitiv details that, “almost 75 per cent of Asia Pacific organisations have been the victims of financial crime over the past 12 months.
This high rate is due to a lax approach to due diligence checks when onboarding new customers, suppliers, and partners.
New vulnerabilities arise every day and can often prove extremely difficult for those who don’t know, or spend time researching about cyber security. Cybersecurity and it’s blind spots are very important to be aware of if your business is going to survive in this technologically progressive environment. No one is immune to cyber security, so taking the steps to prevent it and stay one step ahead is key. PaysOnline take the responsibility of handling your most personal information extremely seriously.
Contact us today for a tailored and secure payroll system.
A Queensland electrical contracting company and it’s director have been penalised $40,000 for ignoring a Fair Work Commission order to compensate an employee who was unfairly dismissed, following action by the Fair Work Ombudsman.
Unfair dismissal, as described on the the Fair Work Ombudsman website, is when an employee is dismissed from their job in a manner deemed harsh, unjust or unreasonable. To apply for unfair dismissal, employees must apply to the Commission within the first 21 days of the dismissal taking effect. If you think you have been unfairly dismissed, you need to contact the Commission as soon as possible.
The Federal Circuit Court charged the employer, Logan City Electrical Division Pty Ltd $32,760. The company’s sole director Peter Burnitt was also charged a further $6,552. The penalty was ordered after the termination of a 26 year old refrigerator and air conditioner mechanic in 2017 after five years of employment.
An order to pay the employee $19,640 and 9.5% commission has set in 2017, however this was not paid to the employee prompting assistance from the Fair Work Commission.
Fair Work Ombudsman Sandra Parker said that ignoring order of the Fair Work Commission is not an option.
“The Fair Work ombudsman has secured penalties against several employers for failing to pay unfair dismissal compensation ordered by the Fair Work Commission,” Ms Parker said.
“It is fundamental to the integrity of the workplace relations system that commission orders are enforced and we will take court action, particularly when they involve compensation for vulnerable employees,” Ms Parker said.
Employers and employees can seek assistance at www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94.
All businesses in Australia are required, by law, to keep records and documents related to how their business operates (business.gov). Maintaining financial records enable you to track cash flow, prepare tax returns and understand your overall financial position. A former Caltex franchisee has found himself in hot water, landing himself a total of $77,708 in penalties for falsifying wage records for migrant workers.
The Federal Circuit Court penalised Mohammad Arif Rana $11,540 and his family’s company, Abdul Wahid and Sons Pty Ltd, a further $66,168 for breaching the Fair Work Act.
Abdul Wahid and Sons Pty Ltd was formerly the franchisee of several Caltex service stations, including two outlets north-west of Sydney at Dural and Ermington.
Mr Mohammad Arif Rana and the company admitted that they knowingly provided false and misleading records to Fair Work inspectors, they also contravened the laws which require issuing payslips to employees within one day of payday.
Fair Work Ombudsman Sarah Parker has sent a reminder to business operators that they now face increased penalties of up to $126,000 per breach for serious false-and-misleading-records contraventions since the new laws came into effect.
“The Fair Work Ombudsman is also enforcing new reverse onus of proof laws that require employers to disprove underpayment allegations in court when they have failed to keep accurate time and wages records. We urge any workers who are receiving incorrect information about time and wages on pay slips, or not receiving them, to contact us.”
The court determined that the absence of accurate time and wages records prevented the inspectors from completing a thorough audit into whether the employees are the Dural and Ermington stores had been paid their full lawful entitlements.
As an outsourced managed payroll provider, PaysOnline helps you maintain and keep compliant records. Don’t risk noncompliance – ensure you’re meeting all your obligations as an employer with PaysOnline fully managed payroll. Contact us today for a quote.
Any employers or employees can contact the Fair Work Infoline on 13 13 94 or search www.fairwork.gov.au.
Source: Fair Work Ombudsman
Single Touch Payroll will officially be rolled out to employers with 19 or less staff from 1 July 2019 as legislation passes in both houses of federal parliament.
The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 secured passage on Tuesday 12th February after it was referred back to the House of Representatives last December due to proposed amendments to other measures contained in the same bill.
This means that all employers, including those with 19 or less employees will have to report under Single Touch Payroll (STP) rules from 1 July 2019. Substantial businesses (those with 20 or more employees) began reporting under the STP system on 1 July 2018.
According to ABS data, there are approximately 781,908 businesses with 19 or less employees. This equates to about 36.8% of Australian businesses. Broken down, microbusinesses with one to four employees account for 584,744 of that total, and the remaining 197,164 are businesses with five to 19 employees.
Small and microbusiness need not worry about the change, as the ATO pre-empted the passage of the legislation, contacting small business clients and informing them that they can start reporting if they have STP ready software. PaysOnline as a managed payroll solution is single touch payroll ready and have been lodging reports for substantial employers since July 2018.
The ATO Commissioner Chris Jordan has asked business leaders not to panic and has pledged to ease micro businesses into the STP regime. He states that they will not be forced into purchasing payroll software, with a number of alternate options set to be available, including the option of allowing their registered tax or BAS agent to report quarterly, rather than each time they run their payroll. Exemptions to STP reporting will also be available to businesses that have no internet or unreliable connection.
For a managed payroll solution that is Single Touch Payroll ready – contact PaysOnline today.
In an Australian Taxation Office media release, it has been reported that the Taxable Payments Reporting System or TPRS has protected a sum of $2.7 billion from being lost to the black economy within the building and construction industry throughout 2015-2016.
What is the Black Economy?
The Black Economy refers to people who operate entirely outside of the tax and regulatory system who are known to authorities but do not correctly report their tax obligations (Australian Government, 2019). It includes a number of practices such as understatement of takings, the payment and acceptance of cash wages off the books, welfare fraud, sharing economy contractors not declaring their income, moonlighting and phoenixing (where businesses deliberately liquidate to avoid paying employees and creditors).
The data collected by the TRPS allows the ATO to identify contractors who fail to lodge returns or activity statements, fail to register for GST, use false ABNs or fail to report all of their income to the ATO. Deputy Commissioner Deborah Jenkins believes the TPRS is key in fighting the black economy.
“The significant revenue increase we’ve seen from the building and construction industry as a result of the TPRS shows how effective it is in improving tax compliance in an industry.”
“TPRS strengthens our ability to match income tax returns from contractors against what businesses report paying, allowing us to detect those trying to hide income and evade tax. The success of this system proves that if you’re trying to evade your obligations it won’t go unnoticed.”
“Businesses who are doing the right thing don’t need to worry, however if you’re not meeting your tax obligations there will be consequences.”
A recommendation from the Black Economy Taskforce now sees the TPRS being extended to cleaning, courier, road freight, information technology, security, investigation and surveillance services. These industries have been identified as high risk.
Ms Jenkins said the ATO is focused on supporting businesses in these industries to meet their reporting requirements.
“For the financial year 2018-19, businesses that supply courier or cleaning services need to report payments made to contractors they use to deliver those courier or cleaning services using the Taxable payments annual report (TPAR). This will need to cover all relevant transactions from 1 July 2018 to 30 June 2019. The annual report for these businesses is due by 28 August 2019.”
“If your current record keeping isn’t accurately capturing this, I urge you to review the way you keep records or contact your professional advisor immediately to assist you.”
“If a contractor provides you with an invoice which includes labour and materials, you are required to report the total amount of the payment regardless of whether it’s itemised or combined.”
As a managed payroll provider, PaysOnline enables you to correctly report and record your information making it easier for you to reach your obligations. Don’t risk being caught out – for a customised solution fit to streamline your business’s payroll practices, contact us for a quick quote.
For more information on the extension of TPRS or to access educational resources, visit ato.gov.ay/TPAR
Source: Australian Taxation Office
The Australian Taxation Office will shortly begin contacting small businesses already using payroll software in a bid to get them to start Single Touch Payroll (STP) reporting before the 1 July deadline.
In an effort to get small businesses to report STP reporting before the 1 July deadline, the ATO will inform these businesses that they need not wait for the legislation to pass before they begin reporting.
“If their payroll software offers STP, they can update their software and start reporting now,” the ATO said in an online update.
According to Australian Bureau of Statistics there are currently, ‘781,908 businesses with 19 or less employees in Australia’ and that is around 36.8% of all Australian businesses. Micro businesses with one to four employees account for 584,744 of that total, and the remaining 197,164 are businesses with five to nineteen employees.
As a fully managed, outsourced payroll provider PaysOnline is ready and waiting to help you meet your Single Touch Payroll obligations. Contact us today for a quote and see how PaysOnline can streamline your business processes.
Source – My Business
Payroll compliance issues are no joke and being caught out can cost you a considerable amount in fines and back pay. Outsourcing your payroll to a company such as PaysOnline means that you will have access to the correct tools and knowledge to help you fulfil your obligations as an employer. Many business owners may try to reduce the fees associated with book keeping, however, having your books maintained by a trained professional may save you a considerable amount in the future.
Accountants Daily recently spoke to Laurus Bookkeeping director Cassandra Scott. Scott said she has seen marketing by certain software providers which seem to target clients perpetuating that bookkeeping “can be done over a cup of coffee or on your smartphone”.
She goes on to state that, “One of the big things we’re seeing is clients trying to reduce fees on bookkeeping support services and often that’s coming off the back of comments by software providers that it is easy and you can do it yourself,” said Ms Scott.
Ms Scott believes that many business owners starting out have the perception that it is quite easy to do their own bookkeeping and states that, “we’ve got the compliance environment which is becoming more stringent – you’re increasing the industries now covered by Taxable Payments Annual Reports (TPAR), you’re looking at the Single Touch Payroll (STP) regime, and it is becoming more and more complex for businesses.
“There is a real dichotomy there between the software providers saying it is easy, but the compliance drivers are saying it is actually getting more difficult.”
It is important to also take note of the recent examples of payroll non-compliance that have been cropping up in the media, including Lush’s $2 million payroll error, as an example of why bookkeeping should not be taken lightly.
“There is a real mixed message going out there at the moment between the compliance authorities and the Australian Taxation Office (ATO) and the Fair Work Ombudsman, and the message that is being pushed out to the client base through the software providers,” said Ms Scott.
“Businesses thinking it is very easy because the software providers tell them it is easy will be potentially caught out with those sorts of compliance requirements,
“It’s like somebody going around saying, ‘Here’s a pair of scissors; it is really easy to use and you can now go out and cut somebody’s hair now.”
By outsourcing your payroll to PaysOnline you will have access to the expert guidance required to maintain your payroll compliance. Don’t risk being caught out – contact PaysOnline today for a managed and compliant payroll solution.
Source: Accountants Daily