Prepare for Single Touch Payroll
Under the new Single touch payroll (STP) system, 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.
The STP system will therefore streamline reporting obligations because information reported through STP will be pre-filled into business activity statements and it will no longer be necessary for employers to provide payment summaries to individuals or a payment summary annual report to the ATO.
From 1 July 2018, it will be compulsory for all substantial employers (i.e. employers having 20 or more employees measured as at 1 April 2018) to adopt STP – however, businesses with a STP enabled payroll business may use the new STP system from 1 July 2017.
Please come and talk to us so that we can assist you to transition to STP (i.e. to explore what you can do to ensure your systems are capable of STP reporting).
Change in tax rate for super payments to backpackers from 1 July 2017
As mentioned in previous Top Tax Tips, from 1 January 2017, the Government will tax working holiday visa holders / backpackers at a flat rate of 15% on earnings up to $37,000 with ordinary marginal rates of tax applying after that.
Furthermore, from 1 July 2017, if a backpacker leaves Australia after the working holiday, any superannuation contributions made on behalf of such backpackers will be taxed at 65% (giving rise to an effective tax rate of 55.25% – because contributions into the fund will be taxed at 15%).
Note that payments made before 1 July 2017 will be taxed at 38% on the taxed element and 47% on the untaxed element.
Pay your tax debts on time
From 1 July 2017, the ATO intends to disclose details of taxpayers with outstanding tax debts to credit reporting agencies – such a disclosure may adversely affect a taxpayer’s credit rating.
Although the ATO does not currently disclose such information to credit reporting agencies we would strongly encourage any business with current outstanding tax debts to engage with a Nexia Edwards Marshall NT Advisor to ensure outstanding tax debts are paid in a timely manner. We can assist a business in establishing a payment plan with the ATO to avoid or minimise penalties and late interest charges on outstanding tax debts, or alternatively your Nexia Edwards Marshall NT Advisor can arrange solutions to refinance and restructure your debts, in order to manage your cashflow.
Deduction for travelling cost to complete a tax return
The cost of travelling to have a tax return prepared by a tax agent will be fully deductible. However, if the trip is combined with another purpose (e.g. combining a trip to have both a tax return prepared as well as a holiday), the cost of the trip (e.g. taxi fares, meals, accommodation and travel insurance) must be reasonably apportioned. A deduction will only be allowable for that part of the expense that relate to managing a taxpayer’s tax affairs.
How can Nexia Edwards Marshall NT help you?
For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall NT Advisor.