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.
Specifcally, the new laws will prevent an employer from claiming a deduction for payments to employees if they:
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.
For advice on this matter, please contact your AGS Accountant to discuss
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Financial planning, corporate benefits and mortgage services are provided by AGS Financial Group Pty Ltd ABN 70 093 990 946, an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 (AMPFP), AFS Licence No 232706. Accounting, taxation, and business advisory services are provided by AGS Accounting Pty Ltd ABN 12 166 728 696. AGS Accounting Pty Ltd is a member of Chartered Accountants Australia & New Zealand. Liability limited by a scheme approved under Professional Standards Legislation.