Hello and welcome to our January 2019 newsletter.  In this quarter’s issue, we have provided articles on the following topics:

Staff Updates

Roshini Suraweera will be leaving us later this month to have her baby and will return later in the year.

We welcome Shammi Wickramasinghe to the team who will take Roshini’s place when she goes on maternity leave. Roshini has been training Shammi for the past month and will continue to do so till she is ready to go.

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MYOB AccountRight Desktop to be discontinued

 If you are currently using a desktop version of MYOB AccountRight Classic to manage your affairs, please note that beyond 30 September 2019, the product will no longer be updated to be compliant with current tax laws.

For those that want up-to-date compliance and support beyond this date, you will be required to upgrade to a MYOB cloud-based product.  MYOB are currently in the process of informing subscribers, so if you fall into this category, be prepared to receive information on how to upgrade.

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Proposed Superannuation Guarantee Amnesty

Under current law, failure to contribute the minimum 9.5% of an employee’s ordinary time’s earnings (OTE) to the employee’s superannuation fund by the required time can result in a liability to pay the Superannuation Guarantee charge, penalties and, where applicable the General Interest Charge (GIC).

The proposed Amnesty provides employers with an opportunity to rectify past SG non-compliance without penalty for a 12-month period. Under the proposal, an employer that has an SG shortfall amount that qualifies for the Amnesty within any period from 1 July 1992 up to 31 March 2018 is provided with the following:

  • the ability to claim tax deductions in respect of SG charge payments made and contributions that offset the SG charge to the extent that the charge relates to the SG shortfall
  • the administrative component to the SG charge will not apply ($20 per employee to which the SG shortfall applies per impacted quarter)
  • part 7 penalties will not apply.

Employers will still be required to pay all employee entitlements, which include the unpaid SG amounts and the nominal interest (calculated at 10% per annum) owed to employees as well as any associated GIC.

To be eligible for the proposed amnesty, you will need to satisfy all of the following:
  • voluntarily disclosed amounts of SG shortfall or late payments that have not been previously disclosed for any period from 1 July 1992 up to 31 March 2018.
  • made the voluntary disclosure within the proposed 12-month amnesty period (between  24 May 2018 and 23 May 2019)
  • The ATO has not previously advised the employer that it is examining, or intends to examine, the employer’s compliance with respect to SG charge payments for that quarter.

However, the proposed Amnesty still has to be passed as law before it will have actual effect. Moreover, there are still a number of serious modifications required to be made in order to make the Amnesty an appropriate basis for employers to come forward with legal certainty.

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Consequences of Non-Lodgment

If you earn more than $18,200, you are required to lodge a tax return. There are some cases you may even be required to lodge, if you earn less than that. Generally, you need to lodge a tax return every year.

If your annual income is below the Tax free threshold, and you didn’t pay any tax, you may not need to lodge a tax return. It is important to advise ATO that you don’t need to lodge a tax return by submitting a non-lodgment advice to ensure they don’t list you as having outstanding tax returns.

Penalties of lodging a late tax return

ATO can issue a Failure to Lodge (FTL) penalty if your tax return isn’t lodged by the due date. This fine is calculated at the rate of one penalty unit for each period of 28 days or part thereof that the return is overdue, up to a maximum of five penalty units. The penalty is normally applied automatically but is not normally applied to returns with either a nil result or which generate a refund.

If you have several outstanding returns, the ATO may issue one or more default assessments.  This is an estimated assessment of your income based on data held by ATO. These estimates are rarely correct and often show a higher tax liability as they don’t take deductions into account. However, you are able to appeal a default assessment.

Will I get prosecuted if I don’t lodge a tax return?

Even though it’s not common, ATO can prosecute for failing to lodge tax returns. Currently, the maximum penalty which can be applied on prosecution is $8500 or imprisonment for up to 12 months.

What should I do if I haven’t lodged my tax returns?

If you have one or more outstanding tax returns, ATO will catch up with you. It’s always a good idea to get your tax returns up to date ASAP.  We can help you minimise the risk by lodging a late tax return on your behalf.

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Early lodgement of NIL activity statements

 The ATO generally issue activity statements by the end of the month, allowing 21 days for you to complete and lodge your monthly activity statement by the due date or 28 days to complete and lodge your quarterly activity statement by the due date.

Activity statements can be generated early in the following cases:
  • if you are going to be absent from your place of business before the end of the reporting period and the business will not be trading during that period;
  • you are a short term visitor, for example, an entertainer or sports person and will be leaving the country before generation of the activity statement;
  • your entity is under some form of administration;
  • your business has ceased; or
  • you will be travelling (either within Australia or overseas) and therefore will not be able to obtain your activity statement if generated under normal bulk process

 (Note: if you are a quarterly client who has elected to report and pay monthly, you are not eligible for early generation of activity statements.)

Activity statements can be generated for up to six months in advance for either six monthly or two quarterly activity statements.  We can liaise with the ATO on your behalf to assist in lodging nil activity statements early if required.

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Tips to Protect yourself from Scammers

With an increasing number of scammers targeting taxpayers, the ATO is urging people to be aware and vigilant. Reportedly over $800,000 was lost during November with an increase in phone calls, emails and text messages with one elderly person losing more than $236,000 in total.

  • The ATO has confirmed that they will not:
  • use aggressive or rude behaviour, or threaten you with arrest, jail or deportation;
  • request payment of a debt via iTunes, pre-paid visa cards, cryptocurrency or direct credit to a bank account with a BSB that isn’t either 092-009 or 093-003;
  • request a fee in order to release a refund owed to you; or
  • send you an email or SMS asking you to click on a link to provide login, personal or financial information, or to download a file or open an attachment.
To protect yourself from scammers:
  1. Know your tax affairs– you can log into myGov to check your tax affairs at any time, or you can contact your tax agent or the ATO.
  2. Guard your personal and financial information – be careful when clicking on links, downloading files or opening attachments. Only give your personal information to people you trust, and try not to share it on social media.
  3. If you are unsure about whether a call, text message or email is genuine, don’t reply. Call the ATO on 1800 008 540.
  4. Know legitimate ways to make payments – scammers may use threatening tactics to trick their victims into paying false debts in pre-paid gift cards or by sending money to non-ATO bank accounts.
  5. Talk to your family and friends about scams– if you or someone you know has fallen victim to a tax related scam, call the ATO as soon as you can.

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