Effective from 1 July 2019, Employers will be required to lodge all PAYG reports and make all PAYG related payments on time. Failure to comply with this requirement will mean that the Employer will not be entitled to a tax deduction for the gross payments made to its employees’.
This new law is quite strict and brings with it harsh penalties in that all payments made to employees will be determined non-deductible, not just the unpaid or unreported component.
Examples of non-compliance will include nil lodgments of Activity Statements as well as any non-payments of PAYG withholding.
Originally announced as part of the federal budget, this Black Economy legislation will take effect from date of Royal Assent.
Payments that will be targeted include employee wages & salaries, directors’ fees as well as payments under a labour hire arrangement or for services where the payee has not quoted an ABN.
This new legislation entwined with the use of Single Touch Payroll by employers marks a new age for keeping employers compliant with their obligations to employees.
For assistance in reviewing your PAYG withholding reporting and payment processes or to find out more information, please contact your Davidsons team member or one of our Cloud Accounting Consultants at firstname.lastname@example.org or 03 52216399.