From the 1 July 2019, the ATO will deny businesses a deduction for payments to workers where payments have not been processed correctly.
The ATO defines the incorrectly processed or non-compliant payments as “any payments you make where you haven’t withheld or reported the PAYG tax”.
As a result, we are recommending that the tax planning going forward will need to be more disciplined and will require determining the following amounts before the end of the financial year to ensure the appropriate amount of tax is withheld and the superannuation obligations have been accounted for:
Salary, wages, commissions, bonuses or allowances paid:
- to an employee
- as directors’ fees
- to a religious practitioner
- under a labour-hire arrangement
- for a supply of services (except supplies of goods and real estate property) where the contractor has not provided you with their ABN
If you haven’t booked your interim performance review and your 2019 tax planning session, contact us today and let’s schedule it in as a matter of priority.
UPDATE: We have teamed up with Employsure to present a free seminar on the 8th of May 2019, covering issues (and how to properly deal with them) related to employees and contractors. This could be well worth your while to attend. If interested, please register here