Issues that attract the ATO’s attention
The ATO warned that family businesses displaying the following types of “red flags” may expect a visit from the ATO in due course:
- the business recently concluded a large one-off or unusual transaction;
- the business has a history of aggressive tax planning or regularly takes controversial interpretations of the law;
- the business owner’s lifestyle is not supported by the owner’s after-tax income or business assets are used privately; or
- the business has poor governance and risk-management systems.
Please contact us if you believe you may be on the ATO radar or if the ATO is currently asking questions. We can assist you with answering ATO queries as well as help you to manage an ATO audit or review process. We can also help you with the design and implementation of effective governance and risk-management systems in your business.
Easier to lodge activity statements from 1 July 2017
As mentioned in a recent Top Tax Tips, from 1 July 2017, businesses with a GST turnover of less than$10 million will be able to lodge simplified business activity statements (BAS), in that such businesses:
- will only have to inform the ATO about GST on purchases and total sales (instead of filling in a number of other labels that may not be relevant to the business);
- will be able to electronically lodge a nil activity statement with just one click (i.e. without having to fill in each label with a zero); and
- will be able to sign the declaration by merely clicking a checkbox (i.e. without having to use AUSkey or myGov credentials).
Streamlined reporting with Single Touch Payroll
The new Single Touch Payroll (STP) system whereby employers will be able to report salary or wages, pay as you go (PAYG) withholding and superannuation information directly to the ATO at the same time they pay their employees, will have a soft/voluntary start date of 1 July 2017 (from 1 July 2018, STP will be mandatory for all employers that have 20 or more employees – as measured at 1 April 2018).
The STP system will therefore streamline reporting obligations because information reported through STP will be pre-filled into business activity statements. Employers will no longer be required to provide payment summaries to individuals or a payment summary annual report to the ATO.
Please come and talk to us so that we can assist you to transition to STP (i.e. to assist you to align the reporting of PAYG and superannuation contributions to the payroll process) and to ensure your systems are capable of STP reporting.