New penalties for business’ Pay As You Go (PAYG) withholding and reporting obligations will commence 1 July 2019.
You will only be able to claim deductions for payments made to employees and certain contractors where you have met the PAYG withholding rules for each payment. Payments that are impacted include salary, wages, commissions, bonuses or allowances to an employee, payment under a labour-hire arrangement or payments for a supply of service.
Specifically, the new laws will prevent an employer from claiming a deduction for payments to employees if they:
• Fail to withhold an amount from the payment as required under PAYG withholding rules.
• Fail to report a withholding amount to the ATO.
This measure highlights a key reason why governance across all employment tax is important. If you make a mistake by failing to withhold an amount or to report it and you voluntarily disclose this to the ATO before an audit or other compliance activity in regards to your tax affairs, your business will not lose its deduction. Taking early action to ensure your business is compliant to these updated PAYG withholding laws will make a difference to whether you remain eligible for deductions.
Should you have any queries please do not hesitate to contact our office on (03) 9728 1448.
Have a great day!
The Team at TAS
This publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. Publication April 2019.