What are the Pay Slip Obligations & National Employment Standard Entitlements? - March eBrief

Pay Slip Obligations

Pay slips ensure that employees receive the correct pay and entitlements and allow employers to keep accurate and complete records.

When are pay slips given?

Pay slips have to be given to an employee within 1 working day of pay day, even if an employee is on leave.

How are payslips given?

Pay slips have to be in either electronic form or hard copy. Electronic pay slips must have the same information as paper pay slips.

What has to be on a payslip

Pay slips have to cover details of an employee’s pay for each pay period. Below is a list of what to include:

• employer’s and employee’s name
• employer’s Australian Business Number (if applicable)
• pay period
• date of payment
• gross and net pay
• if the employee is paid an hourly rate:
  • the ordinary hourly rate
  • the number of hours worked at that rate
  • the total dollar amount of pay at that rate
• any loadings, allowances, bonuses, incentive-based payments, penalty rates or other paid entitlements that can be separated out from an employee’s ordinary hourly rate
• the pay rate that applied on the last day of employment
• any deductions from the employee's pay, including:
  • the amount and details of each deduction
  • the name, or name and number of the fund / account the deduction was paid into
• any superannuation contributions paid for the employee’s benefit, including:
  • the amount of contributions made during the pay period (or the amount of contributions that need to be made)
  • the name and / or number of the superannuation fund the contributions were made to.

Should leave balances be on payslips?

While it is best practice to show employee’s leave balances on their pay slip, it’s not a requirement. Employers do need to tell employees their leave balance if they ask for it.

Employers who give proper pay slips are able to keep good records that can be easily found if needed.

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – March Activity Statement:  21st April, 2016final date for lodgement and payment.

BAS/IAS Monthly Lodgement – April Activity Statement:  21st May, 2016final date for lodgement and payment.
 
BAS/IAS Monthly Lodgement – May Activity Statement:  21st June, 2016final date for lodgement and payment.

3rd Quarter of FY 2016: BAS Lodgement – MarchQuarter 2016 (including PAYGI) 28th April, 2016 final date for lodgement & payment

4th Quarter of FY 2016: BAS Lodgement – JuneQuarter 2016 (including PAYGI) 28th July, 2016 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia.

Due date for super guarantee contributions, for:
3rd Quarter of FY 2016, January to March 2016 - contributions to be made to the fund by 28th April, 2015.
4th Quarter of FY 2016, April to June 2016 - contributions to be made to the fund by 28th July, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates.  

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

National Employment Standards

All employees who are covered by the Fairwor Act 2009 are entitled to the ten National Employment Standards.  Some of the NES have their own internal eligibility criteria.  Please refer to the dedicated NES Factsheet for detailed information about each of the ten NES

In addition to the NES, an employee’s terms and conditions of employment generally come from an award or agreement. All references to an award or agreement in this newsletterinclude modern awards, enterprise agreements, and award or agreement-based transitional instruments.

What are the 10 NES Entitlements

The NES are set out in the Fair Work Act 2009 and comprise 10 minimum standards of employment. Each standard is covered in detail in Fairwork fact sheets, but in summary, the NES involve the following minimum entitlements:

• Maximum weekly hours of work – 38 hours per week, plus reasonable additional hours.
• Requests for flexible working arrangements – an entitlement allowing employees in certain circumstances as set out in the Fair Work Act 2009 to request a change in their working arrangements because of those circumstances.
• Parental leave and related entitlements – up to 12 months unpaid leave per employee, plus a right to request an additional 12 months unpaid leave, plus other forms of maternity, paternity and adoption related leave.
• Annual leave – four weeks paid leave per year, plus an additional week for certain shift workers.
• Personal/carer’s leave and compassionate leave – 10 days paid personal/carer’s leave, two days unpaid carer’s leave as required, and two days compassionate leave (unpaid for casuals) as required.
• Community service leave – unpaid leave for voluntary emergency activities and leave for jury service, with an entitlement to be paid for up to 10 days for jury service.
• Long service leave – a transitional entitlement for employees as outlined in an applicable pre modernised award, pending the development of a uniform national long service leave standard.
• Public holidays – a paid day off on a public holiday, except where reasonably requested to work.
• Notice of termination and redundancy pay – up to five weeks notice of termination and up to 16 weeks severance pay on redundancy (if applicable, see below Fairwork link), both based on length of service.
• Provision of a Fair Work Information Statement – must be provided by employers to all new employees, and contains information about the NES, modern awards, agreement-making, the right to freedom of association, termination of employment, individual flexibility arrangements, union rights of entry, transfer of business, and the respective roles of the Fair Work Commission and the Fair Work Ombudsman.

Fairwork Link: www.fairwork.gov.au/ending-employment/redundancy/who-doesnt-get-redundancy-pay

How does the NES Apply

The NES apply to all employees covered by the national workplace relations system regardless of the applicable industrial instrument or contract of employment. Terms in awards, agreements, and employment contracts cannot exclude or provide for an entitlement less than the NES, and have no effect.

An employer must not contravene a provision of the NES. A contravention of a provision of the NES may result in penalties of up to $10,800 for an individual and $54,000 for a corporation.

Please Note:  This newsletter is intended to provide general information only.  It should not be relied upon as legal advice.  This information is from the Fairwork Website March 2016

Apple Business Consultancy February eBrief

ATO Accepts Pre-Payment of Tax Bills

Tax Pre-Payment

A pre-payment is a payment made in advance for an expected tax bill. A business can make pre-payments at any time to make it easier to manage its tax. Some tax liabilities qualify for early payment interest when the payment is made more than 14 days before the due date. If you are eligible for interest on early payments, you can calculate how much they should receive using the credit for interest on early payments calculator.

Any payments made towards tax liabilities before they are due will remain on the integrated client account unless you request a refund. If a business has a tax debt, pre-payments may be used to offset against it.

To assist you in making regular pre-payments, we can estimate the amount to pay by using the ATO online tools and calculators. Voluntary payments can be made using any payment method - Bpay, credit card, direct credit, direct debit, cheque or in person at Australia Post outlets.

Early Payment of Tax   

A tax payment made for certain tax debts (as set out below) will qualify for early payment interest if the payment is made more than 14 days before the due date. Early payment interest is payable on the following:

• Income tax (including Medicare levy and Medicare levy surcharge)
• Compulsory Higher Education Loan Program (HELP) repayment amounts
• Student Financial Supplement Scheme assessment debts
• Interest on distributions from non-resident trust estates
• Income tax penalties for late lodgement of returns in the 1999–2000 and earlier income years
• A general interest charge relating to a late tax return for the 1999–2000 and earlier income years
• A general interest charge on increase in tax payable resulting from an amended assessment for the 1999–2000 and earlier income years
• A shortfall interest charge

The following payments do not attract early payment interest:

• Pay as you go (PAYG) withholding amounts including
• amounts withheld from interest, dividends and royalties
• amounts withheld by payers (including those withheld for the purpose of repaying contributions or debts under HECS-HELP)
• PAYG instalments
• Any part of a payment that exceeds the amount that is due and payable
• Activity statement payments

How to Claim Your Interest on Early Payment

There are two ways to claim any credit interest. You can claim it as a credit on your tax return (supplementary section) for the income year in which the entitlement to the interest arises, (if it is 50 cents or more); to do this you will need to calculate the amount of your entitlement.  You can also write to the ATO requesting payment of the interest; the interest will not be paid until after the due date for payment of the relevant tax liability.

A credit for early payment interest may not be claimed if the entity is also entitled to claim interest on overpayment on that early payment.

How to Work out the Period of Which Interest is Payable

For most taxpayers, interest is payable from the later of the date of issue of the tax liability notice or the date payment is made. Interest is payable up to and including the due date for payment, but only up to the value of the tax bill.

More detail and examples are available at the ATO - Early Payment of Tax.

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – January Activity Statement:  21st February, 2016 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – February Activity Statement:  21st March, 2016final date for lodgement and payment.
 
BAS/IAS Monthly Lodgement – March Activity Statement:  21st April, 2016final date for lodgement and payment.

2nd Quarter of FY 2016: BAS Lodgement – DecemberQuarter 2015 (including PAYGI) 28th February, 2016 final date for lodgement & payment

3rd Quarter of FY 2016: BAS Lodgement – MarchQuarter 2016 (including PAYGI) 28th April, 2016 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia.

Due date for super guarantee contributions, for 2nd Quarter of FY 2016, October to December 2015 - contributions to be made to the fund by 28th January, 2015.

3rd Quarter of FY 2016, January to March 2016 - contributions to be made to the fund by 28th April, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates.  

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

Single Touch Payroll is Back on the Agenda

Single Touch Payroll Reporting

(Update: 15th December, 2015)

Modified 23rd December due to Ministers Media Release

ICB Summary: The Mid Year Economic and Fiscal Outlook (MYEFO) from government recommitted the government and the tax office to making STP real. This has been further supported and explained by Media Release on 22nd December, 2015.

New: It will not be compulsory for small business (< 20 employees), for now. Although dates are vague we suggest not until a date after July 2018.

New: If a business with turnover of below $2m chooses to adopt STP, the Government will provide a tax offset (reduction in your tax bill) of $100 in the 2017-18 year, if you buy software or pay a software subscription.

Update: It is compulsory for employers with more than 20 employees from 1st July, 2018

The MYEFO statement did not change any concepts known about how it will work ie

• report every payrun
• option to pay every pay run
• allegedly will simplify Tax File Number Declaration process
• allegedly will simplify SuperChoice election of fund process
• allegedly will simplify the end of year payment summary process
• enhance superannuation compliance as the ATO will know whether super has been paid or not

ICB continue to support the Single Touch Payroll initiative and look forward to an efficient business process built into all our common payroll software to enable an easy system and easy compliance. The devil in the detail is yet to be developed.

Extract From the MYEFO Papers

The Government will simplify the reporting by employers of their Pay As You Go (PAYG) withholding obligations and superannuation contributions by progressively implementing Single Touch Payroll (STP).

Under STP, employers will automatically report individual employee payroll information to the Australian Taxation Office (ATO) using their business management software. STP will also introduce reporting of superannuation contributions information to the ATO when payments are made to super funds. Employers will have the option to pay their PAYG withholding at the same time they pay their staff.

The government will introduce streamlined processes for individuals commencing employment. Individuals will have the option of completing their Tax File Number Declaration and Superannuation Standard Choice forms using myGov or through their employer’s business management software.

This measure will be phased in as follows:

• from January 2017, there will be a voluntary pilot of STP. The pilot will focus on, but is not limited to, targeted small and medium enterprises;
• from July 2017, all businesses may commence STP reporting, with the option to make voluntary payments. In addition, the ATO will commence transitioning employers with 20 or more employees to STP; and
• from 1 July 2018, employers with 20 or more employees will be required to use STP enabled software for reporting to the ATO.

To assist small business that wish to take advantage of the benefits of STP, the government will provide businesses with a turnover of less than $2 million with a $100 non-refundable tax offset for expenditure on Standard Business Reporting (SBR) enabled software. This offset will apply from 1 July 2017, and will be available for software purchases or subscriptions made in the 2017-18 financial year only. This measure is estimated to have a gain to revenue of $267.4 million over the forward estimates period. The Government will provide $189.0 million to the ATO to implement this measure.

ICB Comment

We observe the paper stating that somehow Single Touch Payroll is going to raise $267.4m of revenue for the government. We can only presume this is because the level of compliance by employers will increase.

Apple Business Consultancy January eBrief

Allowing for Private Expenses

The ATO acknowledges that at times it is convenient for a business owner to purchase goods through their business that are in fact for private use, and also that there are goods that are purchased that may legitimately be used for both home and work purposes.

There is no problem with you paying for such goods through your business; however, you cannot claim the GST or the purchase amount as a business-related expense where it relates to private usage, unless Fringe Benefits Tax applies.

You may only claim a GST credit for the portion that relates to business usage. Generally a business would report the private usage adjustment on each BAS quarterly.

How to Work out the Private Portion of Expenses

• Estimate or calculate accurately the portion of private use
• Calculate the percentage of private use cost and the corresponding GST amount
• Adjust the GST claim on each BAS

Annual Private Apportionment  

A small business may elect to account for private usage annually rather than quarterly in some circumstances:

• Your annual turnover is less than $2 million
• You must assess eligibility for annual reporting by 31 July each year.

This means that you only make one adjustment either at the end of the financial year or in conjunction with the preparation of your income tax return, to account for private usage throughout that year.

Criteria for Claiming a GST Credit in Relation to Private Expenses

• The purchase must be at least partly for business use
• GST is included in the purchase price
• The business has paid (or will pay) for the expense
• You have a valid tax invoice for the purchase

Common Examples of Private Expense Adjustments  

• Purchase of a laptop computer for use at both home and office
• Purchase of vehicle for both leisure and work use
• Percentage of contractor’s invoice where work was performed at home office

Hospitality Industry Stock Used for Private Use  

The ATO will accept an estimate of the value of goods taken from trading stock for private use in certain hospitality/food related businesses. The ATO publishes a schedule of private use amounts for each financial year. See below for detail if relevant to your business.

What you Can't Claim

You may not claim expenses that are solely private or domestic in nature, for example, childcare fees, clothing, or paying a cleaner for your home. Nor can you claim expenses that are not legally tax deductible such as parking fines, loans undertaken to pay off an ATO debt, or penalties imposed by court order.

Entertainment expenses are in their own category. You may be able to claim some entertainment expenses where it relates to employees and associates, however, these may also be considered for Fringe Benefits Tax. You will need to check before claiming the cost of any entertainment related expenses.

Bookkeeping and BAS Preparation

As your bookkeeper/BAS agent, I will make any necessary adjustment on your BAS according to your instructions regarding specific percentages related to the following expenses:

• Vehicle use
• Laptop use
• Contractor XYZ
• Other..

You may need to provide the accountant with verification for your claims at the end of the financial year.

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – December Activity Statement:  21st January, 2015 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – January Activity Statement:  21st February, 2016final date for lodgement and payment.

BAS/IAS Monthly Lodgement – February Activity Statement:  21st March, 2016final date for lodgement and payment.

2nd Quarter of FY 2016: BAS Lodgement – DecemberQuarter 2015 (including PAYGI) 28th February, 2016 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia.

Due date for super guarantee contributions, for 2nd Quarter of FY 2016, October to December 2015 - contributions to be made to the fund by 28th January, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates. 

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

What it Means to be a Director of a Company

A company is a separate legal entity with its own rights and obligations.  Company assets, liabilities, income and expenses belong to the company entity, not to the individual directors.

Directors are bound by certain rules that govern your behaviour.  You must carry out your duties as a director in good faith, in the interests of the company (even if that conflicts with your personal interest), and for a proper (legal) purpose.

The Corporations Act 2011 imposes legal obligations on company directors and sets out how directors must perform their duties and how they are expected to manage the affairs of the company.

Directors Key Responsibilities

• To act in good faith in the best interests of the company and for a proper purpose
• To exercise care and diligence
• To avoid conflicts between the interests of the company and your personal interests
• To prevent the company trading while insolvent (i.e. while it is unable to pay its debts as and when they fall due)
• If the company is being wound up, to:
  • report to the liquidator on the affairs of the company
  • help the liquidator (e.g. by giving the liquidator the company books and records that you may have in your possession)

It is expected that a director can guide and monitor the management of their company.  A director’s responsibilities are not changed or limited by previous experience (or lack thereof).

Directors have a duty to act with honesty and diligence according to your legal obligations as set out in the Corporations Act 2011, and any other relevant laws such as Superannuation Guarantee Act 2009 and Goods and Services Tax Act 1999.

Company Responsibilities

• Must have a registered office in Australia
• If the company operates from an address other than the registered office, ASIC must be notified of the principal place of business
• The company must notify ASIC of personal details of all directors - name, date of birth and residential address
• Must keep detailed financial records and lodge reports with ASIC if required
• Must keep ASIC details up-to-date; ASIC must be notified of changes to company details and personal details of directors within 28 days of changes
• Must pay relevant fees to ASIC and other licencing bodies as needed
• Must fulfil financial reporting and payment obligations as per the ATO requirements

Recommendations

• Always act in good faith and honesty in business dealings on behalf of the company
• Make sure you understand your legal obligations as a director
• Keep informed of the financial position of your company by reading and understanding financial reports regularly
• Get advice when considering changes to company and business activities
• Understand how any proposed changes may affect business performance
• Regularly meet with management and key personnel to remain informed about all aspects of the business
• Be careful when times are tough—it is illegal to trade while insolvent

What to do When Things go Wrong

In most cases, if things go wrong, the debts of a company remain with the company entity.  The company entity will be active until it is de-registered with ASIC.  However, in some circumstances, company directors may become personally liable for unpaid debts, and this liability may continue even though a company has ceased operations.

• Get professional advice from your tax agent before anyone else.  Your difficulties may be temporary and there may be payment plans available to manage cashflow in the short-term
• Take action as soon as you believe there may be problems.  Statistics show that directors who face the difficulties as soon as they are known about have a greater chance of overcoming the challenges and remaining in business.
• You may receive advice about voluntary administration, liquidation or receivership as appropriate to your company’s situation. 
• Whoever is appointed, you must assist them in their assessment and management of the company as long as required.
• If administrators or liquidators are appointed, you lose some or all control of the company depending on the situation.  Again, depending on the circumstances, control may or may not be regained.

Summary

This is not a complete guide to director’s responsibilities but is meant as an overview.  You should check the links below for more detail on all aspects of your responsibilities as a company director.

Apple Business Consultancy December ebrief

Annual Christmas Shutdown

Many businesses have a scheduled period of closing business operations during the Christmas and New Year period. How an employer must treat this depends on the award or agreement the employee is governed by. These guidelines apply to permanent employees - casual employees do not have to be paid during a scheduled shut down.

Award or Agreement allows employer to direct leave

Example: The Clerks Private Sector Award does allow employers to direct employees to take leave during an annual shutdown, and they must be given at least 4 weeks’ notice (before the first day of leave), in writing.

What if the employee doesn’t have enough leave?
The employer can agree to pay annual leave in advance or the employee can take unpaid leave. However, from FairWork: “If an employee doesn’t agree to either, they have to be paid their ordinary pay rate for the shutdown. They can’t be forced to take unpaid leave”.

Award or Agreement is silent

If the award or agreement is silent on the issue, then the employer may not force an employee to use their leave during a scheduled closure. The employer can negotiate with the employee to take paid or unpaid leave, or half pay leave if the award/agreement allows this.

The employee is not covered by an award or agreement

Note that this is rare - the majority of employees are governed by an award.

If there truly is no award or agreement governing the employee, then the employer can direct the employee to take leave if the direction is ‘reasonable’. See below for detail on what is ‘reasonable’.

Public holidays during leave

Public holidays that fall during a period of paid leave are always paid as normal work days; they should not be taken as annual leave days. If an employee usually works a given number of ordinary hours and overtime hours, then they will be paid only for the ordinary hours on a public holiday, they will not be paid for the usual overtime hours. If a public holiday falls during a period of agreed unpaid leave, the public holiday is not paid.

What is 'Reasonable'?

From FairWork Best Practice Guidelines: “What is 'reasonable' will depend on factors such as the kind of business run by the employer, the nature of the work performed by the employee, the employee's personal circumstances (including family responsibilities) and how much notice was given to the employee”.

An employer can refuse a request from an employee if they do not feel it is reasonable; this applies also to the employee refusing a request from an employer they do not feel is reasonable.

This will be governed by factors such as: the effect on the workplace and the employer's business of approving the request, including the costs of doing so and negative impacts on efficiency, productivity or customer service; the inability to organise work among existing staff; and, the inability to recruit a new employee or the practicality or otherwise of the arrangements that may need to be put in place to accommodate the request.

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – November Activity Statement:  21st December, 2015 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – December Activity Statement:  21st January, 2016 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – January Activity Statement:  21st February, 2016final date for lodgement and payment.

2nd Quarter of FY 2016: BAS Lodgement – DecemberQuarter 2015 (including PAYGI) 28th February, 2016 final date for lodgement & payment.

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia.

Due date for super guarantee contributions, for 2nd Quarter of FY 2016, October to December 2015 - contributions to be made to the fund by 28th January, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates. 

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

Christmas Parties and Fringe Benefit Tax
How should you Treat these Expenses?

Christmas Parties

The boss decides to throw a Christmas party for the staff. Can you claim this as a business expense? Does Fringe Benefits Tax apply? This depends on who attends and where the party is being held. The provision of a Christmas party for an employee may be a minor benefit and exempt from FBT if the cost of the party is less than $300 per employee and certain conditions are met. This provision also applies to the employee's associate (family member) or spouse.

The cost of providing a Christmas party is income tax deductible to the extent that it is subject to FBT. Therefore, any costs that are exempt from FBT cannot be claimed as an income tax deduction. GST credits can only be claimed to the extent that a cost is tax deductible. Therefore, if you cannot claim it as a deduction, you cannot claim the GST credits either. The ATO have guidelines in regards to FBT as it relates to different business structures. See the links below for more detail.

What can you Claim

Minor Benefits Exemption

The $300 threshold is applied separately to each benefit, gift or party. So for example, an employee could attend the workplace party at a cost to the employer of $280 and receive a gift worth $250, but because these amounts are treated separately there are no FBT implications.

Christmas Gifts

The provision of a gift to an employee at Christmas time, such as a hamper, may be a minor benefit that is an exempt benefit where the value is less than $300. Where the gift is given at the Christmas party, each benefit can be considered separately.

Christmas Gifts for your Clients & Employees

Are gifts to your employee, clients and suppliers claimable? Gifts may be classified as “entertainment”.

1. For gifts such as wine, food, hampers, vouchers, etc., these are not considered to be entertainment.

• If the gift is a minor benefit (i.e., less than $300 value), then the gift is not tax deductible, and therefore GST is not claimable for gifts to employees and their family members, clients and suppliers. No FBT applies to gifts of less than $300.
• For gifts over $300, FBT may apply for employees and their family members, but FBT does not apply to clients or suppliers.

2. Gifts such as a holiday, membership to a club, or tickets to a theatre, sporting or musical event are considered to be entertainment

• For minor benefits, as above, the gift is not tax deductible and no FBT applies.
• Also for clients and suppliers, the entertainment gift is not tax deductible, and no FBT applies.
• For Employees that is not a Minor Benefit, the gift is tax deductible but it is also subject to FBT.

Giving your clients a gift at Christmas is a personal choice that you as the business owner can make. Be aware that some clients may not be allowed to accept gifts due to their business’s Code of Conduct (e.g., government workers). We remind you that the topic of entertainment, tax deductibility and fringe benefits tax is complex and not always straightforward. Check with your Tax Agent if in doubt and refer to the ATO website for detailed guidance.

We remind you that the topic of entertainment, tax deductibility and fringe benefits tax is complex and not always straightforward. Check with your tax agent if in doubt and refer to the ATO website for detailed guidance.

Apple Business Consultancy August ebrief

ATO Lodgement Deferral - You still have to pay on time

Issue

When a lodgment deferral for an activity statement is granted by the ATO, the payment is not automatically deferred.
How does the Business Owner/BAS Agent know what to pay until they complete the BAS?

Response

A deferral of lodgment extends the due date for lodgment without penalty.

The Commissioner can defer the time for lodgment of any approved form pursuant to Section 388-55 of Schedule 1 to the Taxation Administration Act 1953 (TAA1953).

The ATO exercises the discretion to grant lodgment deferrals by applying PS LA 2011/15 Lodgment obligations, due dates and deferrals.

It would be reasonable for the ATO to defer lodgment of an obligation in circumstances such as the serious illness of the agent or client, impeded access to records, or where a small number of returns will not be lodged by the due date despite a concerted effort by the agent.

• Separate legislative provisions provide the Commissioner with the discretion to defer the due date for payment of a tax liability.
• Payment deferrals are primarily based on the client’s ability to pay by the due date.

The relevant provision under which the Commissioner may defer time for payment is Section 255-10 of Schedule 1 to the TAA1953.

A deferral of payment extends the date for payment without any penalties accruing between the original due date to the deferred due date. We are guided by PS LA 2011/14 General debt collection powers and principles when considering requests for additional time to pay.

Payment will be deferred where the debtor can demonstrate that are circumstances beyond their control affecting their ability to pay on time, and payment in full can be made at a later date. A list of circumstances which is not exhaustive are outlined; such as natural disasters, legal impediment, and serious illness.

Due the variety of reasons that can lead to a lodgment deferral being requested, and the application of payment deferrals under separate legislative provisions, a payment deferral cannot be automatically applied, nor is it always appropriate to do so.

The circumstances allowing lodgment deferral are not the same for payment deferral. For the ATO there is a risk to timely collection of revenue in automatically granting payment deferrals.

Clients/agents are encouraged to make an estimate of the liability, this information can be sourced from BAS lodged in previous periods.

For further information see the ATOs Services and Support Overview for Agents, click here for your copy.

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – July Activity Statement:  21st August, 2015 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – August Activity Statement:  21st September, 2015 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – September Activity Statement:  21st October, 2015 final date for lodgement and payment.

4th Quarter of FY 2015: BAS Lodgement – June Quarter 2015 (including PAYGI) 28th July, 2015 final date for lodgement & payment

1st Quarter of FY 2016: BAS Lodgement – September Quarter 2015 (including PAYGI) 28th October, 2015 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia

END OF FINANCIAL YEAR - Additional Lodgements

Payment Summaries to be lodged with the ATO by the 14th August, 2015

Taxable Payments Annual Report (TPAR) to be lodged with the ATO by the 28th August, 2015

Due date for super guarantee contributions, for 4th Quarter of FY 2015, April to June 2015 - contributions to be made to the fund by 28th July, 2015.

Due date for super guarantee contributions, for 1st Quarter of FY 2016, July to September 2015 - contributions to be made to the fund by 28th October, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates. 

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

Business Information - Superannuation Guarantee

SuperannuationEmployer Obligations

• Offer your employees a ‘choice of fund’
  • Identify new employee is eligible
  • Provide a standard choice form
  • Nominate a default fund (must be a MySuper product)
  • Act on employee’s choice of fund
• Pay superannuation guarantee before due date
• As of 1 July 2014, the superannuation guarantee rate is 9.5%
• You must keep the following Superannuation records for five years
  • How you calculate any reportable employer super contributions
  • How you calculate each of your employee’s salary or wages and OTE
  • Copies of relevant salary sacrifice agreements you entered into with your employees
  • Copies of relevant industrial agreements with your employees
  • Evidence that you offered your eligible employees a choice of Super Fund

Employees Who are not Eligible for SGC

• Employees paid less than $450 in a month (less than $350 for some hospitality awards)
• Employees under 18 years working 30 hours or less per week
• Non-resident employees for work done outside of Australia
• Foreign executives who hold certain visas or entry permits
• Employees paid for domestic or private work 30 hours or less per week
• Employees who receive payments under Remote Jobs and Communities Program RJCP (Formerly CDEP)
• Members of the Army, Navy or Airforce reserves
• Employees temporarily working in Australia, covered by bilateral super agreement.
• Super Guarantee Eligibility Tool

Thresholds

If an employee earns more than a certain limit, the employer is not obliged to pay SGC 9.5% on earnings above the threshold.

• Maximum contribution base 2015 year $49,430 (approx. $192,160 pa)
• Maximum contribution base 2016 year $50,810 (approx. $203,240 pa)

Concessional Contribution Caps

The concessional contributions cap refers to the amount of contributions that can be made to an employee’s super fund before they pay extra tax. This is the employee’s responsibility to keep track of, however, employers often get asked about these caps.

• Under 49 contributions limit $30,000
• Over 49 contributions limit $35,000

Employee Obligations

• Provide superannuation fund details or choose the default fund (a MySuper Product)
• Provide employer with electronic service address, ABN and bank details if nominated fund is a Self-managed super fund (SMSF).

Superannuation for Contractors

The ATO states “if a contractor (sole trader) is hired principally for labour being more than half of the contract then SGC should be considered”.  The SGC ruling looks at key factors of CONTROL, ACHIEVING A RESULT and USE of TOOLS and EQUIPMENT.

A person’s labour whether physical, mental or artistic effort may be considered for SGC if the person:

• Paid solely on their personal labour and skills
• Perform the work themselves and does not delegate
• Paid by the hours worked, rather than achieve a result

The words ‘achieve a result’ is the distinction to pay SGC or not.  A contractor must outline in a quote or timesheet/invoice that their work will achieve a result and not simply being paid for hours worked.

• For example, a contractor (sole trader) who works for a builder for a 3-6 month project and works every day for the builder, supplies his own tools but no materials would be subject to SGC.
• Alternatively, a contractor (sole trader) who quotes the job, installs using his own materials and tools to complete the job (achieve a result) is working independently and not subject to SGC.
• ATO Super for Contractors

Superannuation Payment Due Dates

11 July - 30 September28 October28 November

21 October - 31 December28 January28 February

31 January - 31 March28 April28 May

41 April - 30 June28 July28 August

Failure to pay Superannuation on Time

An employer is required to lodge a SGC Charge Statement if superannuation payment is not paid by due date, even if payment was made late.
SGC Charge Statement includes:

• SGC shortfall (Includes ALL Wages)
• Interest 10% per day till paid
• Administrator Fee $20 per employee per quarter
• Late Payment Offset (if applicable)

A director of a company that fails to meet a SGC liability by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.

ATO - SGC Directors Liability.

SuperStream Information for Employers

SuperStream is a compulsory system of submitting Superannuation Payment information (standardised data) electronically.  The information links the payment made by the employer to the employees account in the relevant superfund/s.

• SuperStream is mandatory for all employers who make superannuation guarantee payments or any other superannuation contributions for employees.
• Employers must provide the minimum data to the super fund or clearing house electronically.
• Ensure payments and data are linked by a unique payment reference number.
• Ensure data and payments are sent on the same day.
• Super funds are required to process contributions into the members account within 3 days.
• Superannuation funds are obliged to contact employers within 5 days if data is missing or invalid.
• Employers must respond to any requests from a super fund for missing information or queries relating to employee payments within 10 days.
• Funds will have to refund contributions within 20 working days if they cannot be allocated to an employee.
• It remains your responsibility as the employer to confirm that super contributions have been received, even if you use a clearing house or other service.
• The Superannuation Guarantee (Administration) Act 1992 requires you to provide a Standard Choice Form to your employees.  This form will allow you to collect the required SuperStream related information from employees.

Apple Business Consultancy July ebrief

 

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – May Activity Statement:  21st June, 2015 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – June Activity Statement:  21st July, 2015 final date for lodgement and payment.
 
BAS/IAS Monthly Lodgement – July Activity Statement:  21st August, 2015 final date for lodgement and payment.

4th Quarter of FY 2015: BAS Lodgement – June Quarter 2015 (including PAYGI) 28th July, 2015 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia

END OF FINANCIAL YEAR - Additional Lodgements.
 
Payment Summaries to be lodged with the ATO by the 14th August, 2015
 
Taxable Payments Annual Report (TPAR) to be lodged with the ATO by the 28th August, 2015

Due date for super guarantee contributions, for 4th Quarter of FY 2015, April to June 2015 - contributions to be made to the fund by 28th July, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates.  

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

SuperStream is NOW

How will SuperStream benefit Employers?

These changes have a range of potential benefits for employers, including:

• the opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to
• less time spent dealing with employee data issues and fund queries
• greater automation and reduced cost of processing contributions and payments
• more timely flow of information and money in meeting your superannuation obligations.

UPDATE: 1 JULY 2015

When do I have to start using SuperStream?

20 or more employees: must be compliant by 30 June 2015.
Philip Hind, ATO’s National Program Manager, Data Standards & E-Commerce (SuperStream) said the ATO will extend its compliance flexibility to employers who are not yet SuperStream-ready by four months until 31 October 2015.

19 or fewer employees: SuperStream starts the 1 July 2015 and you have until 30 June 2016 to meet the SuperStream requirements when sending superannuation contributions on behalf of your employee.  If you are ready you can begin now.

What are my options for meeting SuperStream?

Every business is different, so there’s no ‘one size fits all’ approach to adopting SuperStream
Employers have options for meeting SuperStream – either using software that conforms to SuperStream; or using a service provider who can meet SuperStream on your behalf. We recommend that you start investigating your options now.

Your options may include:

• upgrading your payroll software
• using an outsourced payroll function or other service provider
• using a commercial clearing house or the free Small Business Superannuation Clearing House (if applicable).
• Your default fund  may also have its own electronic channel that can be used during the transitional period up to 30 June 2016. This fund can provide you with details about how to comply with the SuperStream using their preferred facilities.

Changes to the Small Business Superannuation Clearing House

1. Employers with fewer than 19 employees can make use of the Small Business Clearing House as their SuperStream solution.
2. From  1 July 2015, all businesses with an annual turnover below the small business entity turnover threshold, currently set at $2 million, will be eligible to access Small Business Superannuation Clearing House (SBSCH).
3. ATO requires 'employee privacy notification' to use the Small Business Superannuation Clearing House refer to the ATO website.

SuperStream Requirements

1. Does the SuperStream Payment have to happen at the same time as the Message is sent? The Superstream regulations require the message related to the payment of a SuperStream amount to happen in the SAME DAY.
2. Can I send the message when I finish the quarter and the business pay on the 28th?

NO: the Regulations require the payment to be processed on the same day as the message.

Compliance Does Not Mean it is a Tax Deduction.

Under SuperStream, all employers are encouraged to use a clearing house (the SBSCH or a commercial clearing house or a default super fund provided clearing house). We agree that a clearing house is the efficient way to manage the payments of SGC. However the employer doesn’t get a tax deduction unless the payment is received by the respective superfunds by the 28th. So the employer must pay the clearing house in time for the clearing house to then pay the superfund by the 28th.

We will be revisiting SuperStream throughout 2015-2016 to keep all relevant information updated.

Business Information - Payroll & Fairwork

Introduction

There are many legal obligations that an employer is bound by. As soon as you engage employees, you will most likely have tax and superannuation obligations at the least, and there are many more issues to consider when employing people.
It is the legal responsibility of the employer to pay the correct rate of pay, superannuation, taxes, and entitlements, and to abide by all the relevant employment related laws, including FairWork.
 

Employer Obligations Checklist

• Modern Awards: These are industry or occupation-based minimum employment standards which apply in addition to the National Employment Standards (NES). They were created to establish one set of minimum conditions for employers and employees across Australia who work in the same industries and occupations. Almost every worker in Australia is covered by a Modern Award. While there are still some State-based awards in operation, these do not apply to employers and employees covered by the Fair Work Act 2009.
• National Employment Standards: The NES contain 10 minimum workplace entitlements which have applied to all employers and employees in the national workplace relations system since 1 January 2010, (however only certain entitlements apply to casual employees). These are legally-enforceable minimum employment terms and conditions.
• Fair Work Information Statement: All employers covered by the national workplace relations system have an obligation to give each new employee a Fair Work Information Statement before, or as soon as possible after, the employee starts employment.
• Fair Work Compliance: It is unlawful to ask people to work on unpaid trials, pay in goods rather than money, pressure employees into agreements, coerce employees or third parties to not exercise their rights, discriminate, terminate unfairly, and engage in ‘sham contracting’ arrangements. Heavy penalties apply for breaches of these laws.
• Dispute Resolution: Modern awards generally impose a process to assist in the resolution of disputes that arise about matters under the award or in relation to the NES. If the dispute can’t be resolved at the workplace level, the matter can generally be referred to the Fair Work Commission.
• Record-Keeping: According to the Fair Work Ombudsman (FWO), records need to be kept for 7 years, while the ATO says 5 years. Err on the side of caution and keep ALL payroll related records for 7 years.
• Superannuation Choice Form: An employer must provide a Superannuation Choice Form to all employees on commencement of employment and you must abide by that choice. If the employee does not make a specific choice, you must pay superannuation into a default superannuation fund.

Other Employment Obligations

Being an employer means more than simply paying your employees. There are various government bodies that you must report to.
There are also various laws that govern your responsibilities as an employer.
FairWork governs many areas related to employment, for example:
Employee entitlements such as: annual leave, hours of work, flexibility arrangements, anti-bullying laws, penalty rates, working on public holidays and much more.
Examples of other areas covered are employment contracts, unfair dismissal, termination of employment, change of business ownership and record keeping obligations.
                                        

You May Need to Pay All or Some of these Taxes & Expenses

• PAYG Withholding to the ATO
• Superannuation to a Clearing House or Superannuation Fund
• Fringe Benefits Tax to the ATO
• Payroll Tax to the State Revenue Office
• Workers Compensation Insurance

You May be Governed by All or Some of These Laws

• FairWork Act 2009
• Pay As You Go Act 1999
• Superannuation Guarantee Act 1992
• Workplace Health and Safety State laws
• Payroll tax State laws
• Long Service Leave State laws
• Workplace Relations Act 1996
• Privacy Act 1988
• Freedom of Information Act 1982
• Independent Contractors Act 2006
• Anti-Discrimination Act 1977
• Workplace Gender Equality Act 2012
• Child Support Act 1989
• Paid Parental Leave Act 2012
• …And there may be other laws, relevant to your state or industry that are applicable to you.

Apple Business Consultancy June ebrief

Budget News

Budget Highlights - Not legislation YET!

• Company tax rate cut to 28.5% from 01/07/2015 for small business with a turnover of less than $2 million.
• Sole-trader business income from un-incorporated business with a turnover of less than $2 million will be eligible for a discount of 5% on the income tax payable. This will be capped at $1,000 per individual per financial year and will be provided by means of a tax offset after completing the tax return.

If you would like to change your structure you can now do so without incurring a capital gains tax consequence. From 1 July 2016.  We have had CGT rollover if you were to change to a company but this proposal means other changes as well.

Start-up expenses deductions will be immediately deductible rather than having to deduct over a 5 year period. Currently proposed for the 2016 year only.

There is now a requirement for offshore service providers to charge GST but not in business to business transactions from 1 July 2017.

Cars to a flat rate of 66c per km for up to 5,000kms or log book method (12 weeks) as from 1 July 2015.  A log book can be started at anytime BUT for the first year of use must be WITHIN the tax year, i.e. started after 1 July 2015.  The % established can be used for up to 5 years.

Paid parental leave proposed changes from 01/07/2016 - employees earning minimum wage will still be eligible for $11,500 for 18 weeks of leave, however from the date of implementation only employees whose employer does not provide parental leave entitlements will be eligible for PPL (either full amount or partial “top-up” amount).

Fringe Benefits Tax

FBT rate increase from 47% to 49% from 01/04/2015 to 31/03/2017.
ATO statutory interest rates for FBT loans to 31/03/2016 decreased to 5.65%.

FBT exemptions will be brought in for business with less than $2 million turnover for all work related electronic devices from 01/04/2016.

Assets and Depreciation

Asset write-off up to $20,000.  Yes, the asset laws have changed yet again. From 12/05/2015 a business can claim an immediate deduction for each asset at a cost of up to $20,000. This will apply to assets acquired and installed for use between 7.30pm on 12/05/15 and 30/06/17.  From 01/07/17 the depreciation threshold and the value of the small business assets pool will revert to the existing provisions.

If the Asset pool balance drops below $20,000 at the end of 30 June 2015, 2016 or 2017 it can be written off.

Superannuation Update

Superannuation rate is 9.5% from 01/07/2014. This rate will remain in place until 30/06/2021.

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time.

BAS/IAS Monthly Lodgement – April Activity Statement:  21st May, 2015 final date for lodgement and payment.  

BAS/IAS Monthly Lodgement – May Activity Statement:  21st June, 2015 final date for lodgement and payment.
 
BAS/IAS Monthly Lodgement – June Activity Statement:  21st July, 2015 final date for lodgement and payment.

4th Quarter of FY 2015: BAS Lodgement – June Quarter 2015 (including PAYGI) 28th July, 2015 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia

Due date for super guarantee contributions, for 4th Quarter of FY 2015, April to June 2015 - contributions to be made to the fund by 28th July, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates.  

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

ATO Approach to Information Gathering

Introduction

These guidelines explain the ATO’s approach to information gathering. The ATO set out what to expect from them and what the ATO expect from you. Their approach is governed by a set of principles.

Their Principles

Their information-gathering principles are followed by their officers. The ATO help ensure that all officers gather information in a fair and professional manner and for the proper application of the laws the ATO administer.

Cooperative Approach

The ATO prefer to gather your information by simply requesting it from you. This cooperative approach does not involve the theme of formal powers.
Theming a cooperative approach helps them to streamline the information-gathering process. By working with you in this way, the ATO can build good working relationships and minimise cost and disruption. In most cases, The ATO find the information they need can be gathered in this manner without having to theme formal powers.

If the ATO cannot obtain the information they require in a cooperative way, they may theme their formal powers. The ATO may also theme their formal powers at the outset in certain circumstances. Their formal powers fall into the two broad categories – notice powers (including notices to attend an interview) and access powers.

Their Formal Notice Powers

Their notice powers require you to provide information, attend and give evidence or produce documents. These guidelines help you understand the reasons why you may have received a notice, what to expect from them, what the ATO expect from you, and how you should respond.

Attending a Formal Interview

The ATO may issue you a notice to attend an interview if it is preferable to obtain information verbally, seek immediate explanations or if there are no relevant documents or other information available.
 
The ATO provide specific guidance on what to expect when attending an interview, your rights and obligations and how they conduct the interview.

Their Formal Access Powers

Their access powers allow them, at all reasonable times, to gain access to your premises and documents. These guidelines explain their approach to theming these powers. The ATO only exercise their rights of access for the purposes of the laws they administer.
 
Generally, the ATO will give you prior notice before exercising an access power. However, in exceptional circumstances they may not give you notice beforehand – for example, if they believe that documents they need may be destroyed.

Limits to Their Formal Powers

In some situations, you may be able to claim your documents are protected by legal professional privilege. Administrative concessions for professional accounting advisers’ papers (the accountants’ concession) or certain corporate board advice on tax compliance risk may also apply. The ATO give you adequate opportunity to consult with their advisers to make a claim, and they will work with you where possible to agree on a procedure for resolving such claims.

Gathering Offshore Information

The ATO have increased their focus on international tax issues. Although the ATO have specific powers to gather information and documents from overseas, they can theme their domestic powers to obtain offshore information. The ATO can also exchange information with other tax jurisdictions.

Gathering Electronic Information

The ATO prefer you to give them information electronically. The ATO have provided specific guidance on the approach they take to help them work together and ensure your information is given to them in an efficient and effective way.

Resolving Disputes

The ATO seek to identify and resolve disputes as early as they can. To help them achieve this, the ATO engage their technical specialists and senior decision makers in a dispute as early as possible. The ATO also theme alternative dispute resolution approaches when possible. Identifying and resolving disputes early helps them minimise the costs of managing disputes for all parties.
 
ATO – Their approach to information gathering.

Apple Business Consultancy May ebrief

End of Financial Year Timeline

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.

You remain responsible for ensuring that the necessary information is with us in time

BAS/IAS Monthly Lodgement – April Activity Statement:  21st May, 2015 final date for lodgement and payment.

 BAS/IAS Monthly Lodgement – May Activity Statement:  21st June, 2015 final date for lodgement and payment.
 
BAS/IAS Monthly Lodgement – June Activity Statement:  21st July, 2015 final date for lodgement and payment.

4th Quarter of FY 2015: BAS Lodgement – June Quarter 2015 (including PAYGI) 28th July, 2015 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

A public holiday is a day that is a public holiday for the whole of any state or territory in Australia

Due date for super guarantee contributions, for 4th Quarter of FY 2015, April to June 2015 - contributions to be made to the fund by 28th July, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates.  

Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

Benjamin Franklin once said "By failing to prepare, you are preparing to fail."

Take this opportunity to make your End of Year stress free by using the timeline and your trusted advisor to calmly prepare for the end of year.

May

1 May: Prepare your End of Year Plan
21 May: April 2015 Monthly Activity Statement – due date for lodging and paying.
28 May: Fringe Benefits Tax annual return – due date for payment.

June

21 June: May 2015 Monthly Activity Statement – due date for lodging and paying.
25 June: 2015 Fringe Benefits Tax annual return – lodgement due date for tax agents (if lodging electronically). Payment (if required) is due 28 May.
Prior 30 June: Super Guarantee Contributions must be paid (to fund) by this date to qualify for a tax deduction in the 2014–15 financial year.
30 June: Stocktake completed.

July

14 July: Prepare and distribute Employee Payment Summaries
21 July: June 2015 Monthly Activity Statement – due date for lodging and paying.
28 July: Prepare June Quarter Business Activity Statement, unless extension is available
28 July: Pay June Quarter Superannuation Guarantee, (unless already paid before June 30)

August

14 August: Lodge Employee Payment Summaries
25 August: Lodge Taxable Payments Annual Reports

September

14 September: Meet with trusted adviosr to finalize the EOY file
25 September: Send final EOY File to Accountant.

Before End of Year - General Tax Checks

Maximise those deductions

If the business’s cash flow is good then it may make sense to spend on extra expenses before June 30 to maximise deductions.

• Get the cars serviced
• Replace the tyres
• Pay the membership fees, subscriptions
• Pay the insurance bills etc
• Get a discount on rent by prepaying for a period
• Pay yourself additional wages and superannuation.

Ensure last year is finalised

• Last year tax return is lodged and you have a copy
• Are all adjustments from last year processed?
• Have you adjusted the data file for any impact of the end of the FBT year?
• Have you adjusted the data file for any adjustments by the accountant?

Private usage adjustments

A once a year adjustment for private expenses – yes you can. The tax agent may have included an adjustment in last year’s final tax returns for disallowing private expenses – has the GST adjustment been made?
It is absolutely acceptable to claim all GST on all taxable purchases for a business or enterprise during the year, if turnover is less than $2m, even if a portion of the expenses are for private use.
The ATO allows a once a year adjustment to reduce the amount of GST claimed. When the Tax Agent has completed the end of year tax returns and informed the amount of private expenses, then make a GST claim reduction in the next BAS. Therefore you will have only claimed back the GST on the business portion. So if you are advised there was $1100 of private expenses, then reduce your next GST claim by $1100/11 = $100. You do not have to inform the ATO, just keep the records.
If you post the totally private expenses to the loan account and don’t claim any GST back at the time of purchase that is okay as well.

Stock / Inventory

Review stock list in detail including when the item last sold at what price
Consider sale at discount of items that are slow – realise the cash

• Write off the value of stock that won’t sell
• Take a full stock count at 30 June and enter through Stock Count and Inventory
• Adjustment if needed

Existing Plant and Equipment

• Obtain the list of assets the accountant uses to calculate depreciation.
• Review the list and remove items that no longer exist or are obsolete.
• Highlight any items sold to the accountant.

New Plant and Equipment

• Businesses are permitted to write off Plant and Equipment that cost less than $100 (incl. GST).
• Business with turnover less than $2m using Small Business Entity Concessions; write off assets that cost less than $1,000 (excl GST).
• We have included the changes as announced in the 2015 Budget. It appears they are not contentious and will become law.
• Before 7.30pm May 12, 2015 the asset threshold for Small Business was $1,000. After this time it is increased to $20,000.
• GST reporting of Capital Acquisitions (G10) threshold is $1,000.

Before End of Year - Payroll Checks

Ensure you check the maximum amounts of superannuation

If you are processing the payroll for businesses, it is wise to check that no employee receives more than the maximum superannuation contribution, unless instructed by the employee’s financial planner or accountant to do so.
Under 49 years maximum contribution is $30,000 and over 49 it is $35,000.
If employees or owners appear to be near or over the maximum the bookkeeper should notify the person in question.

Maximise those tax deductions - Superannuation

While Superannuation Guarantee is not due till the 28th of July, in order to get the income tax deduction in this financial year, the superannuation must have been paid through your bank account before 30 June.
Effective technique: use the Superannuation Clearing House.

Apple Business Consultancy April ebrief

HR Systems and Support Services: Key Questions to Ask Before You Commit

Have you noticed how often you are asking HR-related questions? Questions like these are now commonplace:

ATO Lodgement Dates

These dates are from the ATO website and do not take into account possible extensions.
You remain responsible for ensuring that the necessary information is with us in time.

BAS/IAS Monthly Lodgement – March Activity Statement:  21st April, 2015 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – April Activity Statement:  21st May, 2015 final date for lodgement and payment.

3rd Quarter of FY 2015: BAS Lodgement – March Quarter 2015(including PAYGI) 28th April, 2015 final date for lodgement & payment.

4th Quarter of FY 2015: BAS Lodgement – June Quarter 2015(including PAYGI) 28th July, 2015 final date for lodgement & payment.

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day. A public holiday is a day that is a public holiday for the whole of any state or territory in Australia.

Due date for super guarantee contributions, for 3rd Quarter of FY 2015, January to March 2015 - contributions to be made to the fund by 28th April, 2015.

Due date for super guarantee contributions, for
4th Quarter of FY 2015, April to June 2015 - contributions to be made to the fund by 28th July, 2015.

The super guarantee charge is not a tax deduction if not paid by these dates.  Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

• Which Modern Award applies to my employees?
• How much do I need to pay my staff?
• Can I deduct an amount from an employee’s final pay?

Though these questions are common and may appear simple, the reality is that the Fair Work Act 2009 (including the National Employment Standards – NES) and Modern Awards are a complex minefield of rules and regulations. And getting it wrong can cost you thousands of dollars in back payments and penalties.

It’s not surprising then, that many bookkeepers & business find themselves looking for HR answers from respected experts in the field. But beware: not all HR systems and support services are created equal!

Here are some key questions you should ask before committing your business to a service provider:

Is the service built for Australian Employers?

Many international HR service providers set up in Australia and begin offering the same range of systems and services as they provide in overseas markets. That would be fine if Australia didn’t have the world’s most complex employment laws!
 

A system that works well in the UK, Canada, or even NZ will be of little benefit here in Australia, unless the content has been specifically tailored to take account of the Fair Work laws and Australia’s unique system of Modern Awards.

Will you be locked in for years?

A minimum 12 month subscription term is to be expected, but contracts which will bind you for between three and five years are, quite disturbingly, becoming more and more common.

Before you subscribe to any service, make sure you confirm how long you will be locked in to paying subscription fees. If it’s any more than 12 months, think again.

Is the service reasonably priced?

We all know that ‘legal advice’ is usually incredibly expensive. Indeed, this is one of the reasons why subscribing to the services offered by an professional HR and employment relations firms (as opposed to law firms) makes such good sense.

So it’s therefore very important to double check the charges for your preferred HR service before you sign on the dotted line. Any service that’s priced at more than $3000 per year should be considerable cause for concern.

At the end of the day, the HR service is meant to help – not hinder – small business, so anything costing thousands and thousands of dollars per year is probably best avoided.

Can You obtain Written Advice?

Make sure the service you select allows you to obtain unlimited answers and make sure the advice is provided in writing too, otherwise you’ll become liable when you ‘reinterpret’ the advice you were given over the phone!

Who Owns the Service?

We’re used to buying products without thinking too long or hard about who owns the brand, but when it comes to HR services this is a very important consideration.

Make sure you choose a service that understands small businesses, and one that provides clear, practical and plain-English answers. There’s little point in obtaining advice if it’s all written in ‘legalese’, or is no more useful than the free ‘advice’ published on the Fair Work Ombudsman’s (FWOs) own website!

SuperStream is Here!!!

How will SuperStream benefit employers?

These changes have a range of potential benefits for employers, including:

• The opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to.
• Less time spent dealing with employee data issues and fund queries.
• Greater automation and reduced cost of processing contributions and payments.
• More timely flow of information and money in meeting your superannuation obligations.

When do I have to start using SuperStream?

20 or more employees:  must be compliant by 30 June 2015.

19 or fewer employees: SuperStream starts the 1 July 2015 and you have until 30 June 2016 to meet the SuperStream requirements when sending superannuation contributions on behalf of your employee.  If you are ready you can begin now.

What are my options for meeting SuperStream?

Every business is different, so there’s no ‘one size fits all’ approach to adopting SuperStream.

Employers have options for meeting SuperStream – either using software that conforms to SuperStream; or using a service provider who can meet SuperStream on your behalf. We recommend that you start investigating your options now.

Your options may include:

• Upgrading your payroll software.
• Using an outsourced payroll function or other service provider.
• Using a commercial clearing house or the free Small Business Superannuation Clearing House (19 or fewer employees).

Your default fund  may also have its own electronic channel that can be used during the transitional period up to 30 June 2016. This fund can provide you with details about how to comply with the SuperStream using their preferred facilities.

Do I need to collect additional Information to make contributions using SuperStream?

Yes. To support contributions being made using the SuperStream standard employers will need to collect some new data that will be included in their payroll file to facilitate electronic processing.

Employers will need to collect the following information:

• Unique superannuation identifier (USI) for APRA-regulated funds.
• ABN for SMSF funds.
• Bank account details.
• Electronic service address.
• For new employees, the choice of superfund form will be updated to include this information.

Your HR or payroll provider will provide you with options to support the capture of this information whether this is updating your existing payroll file or storing this information until an update is made available.

My clearing house shields me from a lot of this complexity, so why do I have to change?

Provided your clearing house submits data and payments electronically on your behalf in accordance with SuperStream, you will not have to make any change to how you provide information or payments to them.
Over the next 12 months we will be updating the eBrief every quarter regarding SuperStream.