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Top Tax Tips – 21 March 2018

Single touch payroll:  What is all the fuss about?

Recently, we published a Tax Update on the latest Single Touch Payroll (STP) developments.

Please read this alert to find out what you can do to ensure your business is STP ready by 1 July 2018 (i.e. either use a payroll provider that is STP ready or ask Nexia to assist you with your payroll function).

Because the ATO will have instantaneous access to payroll information through STP reporting, it is now more important than ever to avoid unnecessary errors when doing a payroll run.  Nexia can help you implement strategies to avoid common payroll mistakes by ensuring employees are paid correctly, employees super entitlements are calculated correctly, overpayments are addressed correctly, and that employee information (e.g. names, birth dates and addresses) is correct.

Ensure your ABN does not get cancelled

In 2018, the ATO intends to cancel Australian Business Numbers (ABNs) of businesses (e.g. sole traders, partnerships or trusts) that have not declared any business income in the last 2 years nor lodged business activity statements or income tax returns for more than 2 years.

If an ABN is cancelled, a business would not be able to quote an ABN on its invoices when the business makes sales to other businesses.  In such a case (i.e. where no ABN is quoted) the purchasing business may withhold 47% of the sale price pursuant to the PAYG system (i.e. the purchaser may only pay the seller 53% of the sale price up-front).

If you are at risk of losing your ABN, please speak to your Nexia Edwards Marshall Adviser so that we can ensure your compliance obligations are up to date so that you do not need to suffer unnecessary cashflow problems due to PAYG withholding.

GST and the use of “drop shipping” to sell products in Australia

From 1 July 2018, overseas vendors with a GST turnover of AUD $75,000 or more (calculation of turnover is limited to Australian sales only), will have to account for GST on sales of low value goods (i.e. imported goods costing AUD $1,000 or less) to consumers in Australia (i.e. purchasers not registered for GST or GST-registered purchasers that acquired such low value goods solely for private purposes).

However, these changes will also affect Australian GST-registered retailers who “drop-ship” supplies of low value goods to consumers in Australia directly.

For example, GST will apply if an Australian GST-registered retailer sells products costing $1,000 or less (e.g. a wedding dress of $500) to a consumer in Australia and the product is shipped directly to the consumer by sea cargo from the company’s offshore supplier.

For more information on GST on low value goods, please see our article published in one of our Nexia International publications.

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 Adviser.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.

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