Posts Categorized: BAS and super obligations

Don’t forget to register for GST!

Don’t forget to register for GST!  If you don’t it could be costly.

The GST registration threshold for businesses that are not non-profits and taxis is $75,000.  If your annual turnover exceeds $75,000 and you are not registered, then the ATO will demand you pay them 1/11th of your turnover.

It can prove rather costly!

Where turnover is not seasonal, we recommend that clients register once their turnover exceeds $6,000 per month.  And sometimes earlier if they will soon be at the limit and have good accounting processes (which we can help set up).

Not sure what is best for you – call us for a free discussion.

Am I required to register for GST

Am I required to register for GST is a question we often get.  The answer is that it depends.

If you operate a business, you are required to have an Australian Business Number (ABN).  But this doesn’t mean you have to also register for GST.

Whether you have register depends on your turnover (sales/fees, etc).  You must register your for GST if your annual turnover exceeds $75,000 ($150,000 for non-profit organisations; taxi drivers are required to register for GST irrespective of their turnover). 

Sounds clear cut – not really!

Annual turnover is defined as being for the current month and the next 11.  That’s right, you are expected to be a clairvoyant!  That said, one should register once their monthly turnover starts exceeding $6,000 per month – with separate consideration for seasonal business.

Should I register if my turnover is under $75,000?

Well that depends on a number of considerations such as:-

  • Do I want to look bigger to my customers?

  • Are my customers the public or businesses? If they are the public, then your price goes up by 10% (but you get to claim back any GST paid).  If they are the business, then they can claim back any GST claimed.

  • If you supply a GST free service such as food and medical supplies, then you won’t charge GST but you will get o claim back GST.

  • Am I going to be able to efficiently run a proper accounting file in order to track and report GST?

So what is best for you?  We would be happy to discuss your situation – please call us.

STP and super payments

The roll-out of Single Touch Payroll (STP) has proved to be an interesting process! 

For some, it just meant clicking another button or two within their payroll program.

For others it meant changing the whole way they processed their payroll.

It has also uncovered some interesting practices.

We have been somewhat surprised to find that some clients weren’t making their employee SG super payments through a SuperStream, nor using a super clearing house. The former is the payment method, the latter is the notification of employee’s contributions.  We have also been surprised to learn that super funds, like some of the really big ones, have still been accepting cheques.

There are free solutions out there but the best solution is almost always the one built within your payroll software. Whilst there may be a cost, it is nominal and avoids double handling.

Please call us if you would like to discuss your situation and needs.

Other STP tasks

Single Touch Payroll (STP) started for all non-large businesses two weeks ago.  So all business should by now be reporting wages at the time of payment.

For some this has meant using a payroll software program for the first time.  This was the perfect opportunity to ensure that all other HR employment requirements had been attended to.

If you are still struggling with all of this then please contact us so we can discuss ways in which we can help you.

 

STP starts next week!

Single Touch Payroll (STP) starts next week!

From Monday 1st July all businesses will be required to report to the ATO each employee’s gross pay, tax and super no later than the day of payment.

Whilst there are extensions available we generally recommend not using them as it only creates more work later – and therefore cost.

If however you need to rely on an extension, then you must have applied for one by week’s end.

Either way, you have to do so something.

We have been taking our clients through the transition journey principally by way of a series of weekly preparatory emails.

If your accountant hasn’t helped you then it is time to change accountants!  Contact us below and we can discuss how we can help you.

 

 

STP – changes at the top

It came as a personal surprise to see that the super impressive head of Single Touch Payroll (STP) at the ATO resigned on Friday. He has done so just two weeks before some 700,000+/- small businesses are required to report wages at the time of payment.

What are we to make of that?

As of two weeks ago, not even 120,000 businesses in the country were registered for STP. One can only therefore conclude that the vast majority businesses will not be ready for STP come 1st July.  That is just 2 weeks from today.

In part, this is not really surprising. STP is the biggest operational change since GST.  Moreover, it relies heavily on public accountants being able to help all of their clients.  And the reality is that the majority of public accountants haven’t been able to meet their 2018 tax lodgement program and are drowning in overdue Tax Returns.  They simply don’t have the time and resources to support what is required to implement STP.

At Maggs Reid Stewart, we are progressively taking our clients through a series of weekly preparatory tasks. And as part of this process, we are guiding clients to clean up their HR systems.

If you are struggling with STP and/or your accountant is not helping you, then please call us. And do so today because this is not something you can attend to on the first pay day in July.

Super contribution warning

A quick super contribution warning.

In order to claim a tax deduction for a personal or employer super contribution, it must be paid by year end.

This year is a bit of a trap with June 30 falling on a Sunday.

Another trap is that I just read that the ATO’s own employer super clearing house requires payment to be made by the close of business on Monday 24th June.  Pay later than that and the contribution will go into the next financial year.  That’s a real problem if you have retired and are aged over 65 as you will thereby breach the work test rule in the first week of July 2019.

Some clearing houses and super funds close off earlier than the 24th.  Make sure you now what you cut-off dates are.

Single Touch Payroll webinar

Are you wondering what you should be doing in preparation of Single Touch Payroll?

Do you know that from 1st July all employers in the country are required to report how much every employee will be paid, the PAYG WH tax thereon as well as what their super will be at the time of payment?  And yes whilst there are exemptions it just means more work later.

You need to be ready for Single Touch Payroll now or in the process of getting ready.

So do you know what you need to do before 1st July?

So do you know what you should be doing from 1st July?

If you can’t answer these questions then you need to attend out STP webinar on Tuesday 28th May at 5pm.

You can enrol by clicking on the following link:-

https://zoom.us/webinar/register/a10dbea62247ddf5d746f627e8486654

 

Single Touch Payroll

Single Touch Payroll will apply to all employers from 1st July 2019.  Whilst extensions have been offered we recommend not relying on them in the majority of cases as it will create more work later.

There are a number of things to do and matters that as an employer you need to have in order before July.  Keep an eye out for notification of our upcoming webinar.

In that webinar we will set out the when, what, why and how of Single Touch Payroll.

We look forward to seeing you then.

Upcoming March quarter deadlines

For those of you who are employers, Friday 26th April is the end date for satisfying your SG super obligation for the March quarter.  Late payments will attract interest and penalties.  As such, this obligation is an employer’s most important commitment so best not to leave it until the last minute; particularly as payments through some super clearing houses take 5 days or more to clear.

For those who lodge a paper (non-electronic) quarterly BAS or IAS, your March quarter activity statement is due to be lodged by Monday 29th April.

Personal services entities

If you have a personal services entity (you will know if this relates to you as we will have discussed this with you many times over the years), your entity will be required to pay at least 80% of its income to you as salary/wage and remit the tax thereon within this BAS.

Lodgement tip

Please note that lodgement of an activity statement (even if it is nil statement) and payment are two separate requirements. Late lodgement attracts a minimum non-deductible fine of $210 for every 28 days that a form is lodged late whereas as late payment results in an interest levy. More importantly, BAS’s and SG super which is not reported and remains unpaid after 3 months becomes a personal debt of directors (please refer to the September 2012 edition of Tips and Traps for further details on the Directors Penalty Notices system) – and the ATO are actively issuing DPN notices.  That said, the ATO are agreeable to entering into payment arrangements.

STP reminder

And a quick reminder about Single Touch Payroll (STP). STP will be mandatory for all employers from July 2019.  You will shortly receive an introductory letter which will be followed by a series or reminders and steps to be implemented before 30th June.