Small businesses are likely to find themselves kept busy with the progressive transition to the Single Touch Payroll system and new rules designed to beat Australia's 'black economy'. Here's a round up of the latest tax news:
New rules cast a wide net
Even businesses not seeking to avoid tax could find themselves affected by a new Bill designed to curtail Australia's 'black economy'.
The Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 was introduced into the House of Representatives in late September. If passed, the Bill will deny a tax deduction for employee/contractor payments if a business is not seen as complying with its obligation to withhold PAYG tax.
Although the Bill provides safeguards for errors, businesses will need to carefully review their internal systems to ensure they are capturing all payments likely to require PAYG withholding. Unusual payments - such as bonuses or commission payments - that are not properly identified as being subject to withholding, could have their tax deduction denied.
The new Bill also requires businesses providing road freight, information technology or security, investigation or surveillance services to report annually to the ATO under the Taxable Payment Reporting System (TPRS). The TPRS was first introduced to the building and construction industry and requires a business to report any payments made to contractors, as the Government believes contractors servicing these industries are at high risk of not disclosing income.