ATO program targeting GST compliance

1. In the 2010 Budget, the Tax Office received over $337 million in funding over four years for additional activities to promote voluntary GST compliance and improve methods for the detection of non compliance.
   
2. The program focuses on various areas within the GST legislation, including the following:
   
• Detecting and dealing with taxpayers who deliberately avoid their GST obligations; and
• Enhancing support and education to encourage taxpayers to meet their GST obligations.
  
3. The Tax Office is detecting non compliance by using methods which include:
   
   
   • The use of new risk indicators to detect incorrect or fraudulent refund claims;
   • Issuing pre-due date lodgment reminders to taxpayers via SMS and letters;
   • Verifying refunds by phoning or visiting taxpayers and contacting third parties such as the state revenue offices and land titles offices to substantiate claims; and
   • The use of small business benchmarks to identify cases for audit or review.
     
4. During the 2010/11 year, the Tax office compliance program resulted in:
   
• Over $150 million being collected through additional GST debt collections activities;
• More than 245,000 debt cases being referred to external agencies; and
• Over 1,000 debt cases being referred for prosecution.
  
5. For more information on the methods and results of the Tax Office GST compliance program, go to http://www.ato.gov.au/businesses/content.aspx?doc=/content/00264648.htm

Leave entitlements calculation in Quickbooks

QuickBooks can accrue up to four different types of leave. By default these are Personal Leave, Annual Leave, Other 1 and Other 2. Other 1 and Other 2 can be edited to incorporate the businesses’ individual needs. For example, these leave types are often changed to RDO (Rostered Day Off) and LSL (Long Service Leave). It is really important that the payroll items Other 1 and Other 2 are not changed to rates such as overtime, because these items are special QuickBooks items set to accrue.

Every Pay
To work out the accrual rate for this option, divide the total leave hours entitled by the amount of pay periods. For example, Bobby Brown works 40 hours per week and is entitled to 4 weeks annual leave per year (Total of 160 hours per year). Bobby is set up in QuickBooks to be paid monthly. Therefore Bobby’s annual leave calculation would be 160/12, which is 13.3333 hours accrued per pay.

Every Hour
To work out the accrual rate for this option, a calculation must be performed dividing the total entitlement by the total amount of hours worked in a year. Because this calculation is based on hours worked, the accrual rate remains the same; however the entitlement increases the more hours that are worked. Simply, an employee who works 10 hours a week is entitled to 4 weeks x 10 hours, whereas an employee who works a 40 hour week is entitled to 4 weeks x 40 hours. In the annual leave example below, each employee accrues 0.07692 hours annual leave for every (normal) hour worked.



Beginning of Year
Some employees have the leave entitlement added as a bulk amount at the beginning of the year. If this option is chosen as the preferred accrual method, the user can nominate a month and date for the accrual hours to be added to the employee’s record. Popular dates are hire dates, anniversary dates, end of calendar year and end of financial year. Then, the entitlement will reduce as the employee takes leave
throughout the following twelve months.

Setting Up Leave Accruals/Entitlements in MYOB

For new leave accruals, you need to set up two categories:

• Wage category which is used to pay the employee when leave is taken
• Entitlement category which is used to calculate the amount of leave the employee accrues each pay run

Set up the wage category

1. Go to the Payroll command centre & click Payroll Categories. The Payroll Category List window appears.
2. Click the Wages tab.
3. Click New. The Wages Information window appears.
4. Enter a name for the new wage category. E.G. ‘Annual Leave - Hourly' or ‘Annual Leave - Salary'.
5. For Type of Wages select Hourly to set up leave for both hourly and salary employees. Select the Regular Rate Multiplied by option and ensure 1.0000 is entered in the field. Select Automatically Adjust Base Hourly or Base Salary Details. When you record leave, base pay amounts will be adjusted for the amount of leave paid.
6. Click Employee. The Linked Employees window appears, displaying a list of all your employees.
7. Select the employees who are entitled to these payments then click OK. The Entitlements Information window reappears.
8. Click OK then click Close.

Set up the entitlement category

1. Go to the Payroll command centre & click Payroll Categories. The Payroll Category List window appears
2. Click the Entitlement tab.
3. Click New if you want to create a new entitlement category, or click an existing category then click Edit. The Entitlements Information window appears.
4. Enter a name for the entitlement category. For example ' Annual Leave Accrual - hourly'.
5. Select one of the three options for Calculation Basis:
• User Entered Amounts per pay period. Select this option if you want to manually enter the number of hours accrued in each pay period. You may want to do this if the amount varies each pay period.
• Equals x percent of. Select this option if you pay your employees hourly and want the accrual to be a percentage of hours worked. Enter the percentage in the first field and select a wage category in the second field. Generally, you will select Gross Hours for the wage category. For more information, see support note Calculating payroll accrual percentages. Also, if you want to exclude certain wage categories from the gross hours calculation, e.g. Overtime, click Exempt. The Entitlements Exemptions window appears. Select the wage categories you want to exclude and click OK.
• Equals x Hours per. Select this option if you pay your employees a base salary. Use this method to accrue a specific number of hours of leave per pay period, regardless of how many hours are worked. Enter the number of leave hours based on the selected period.
6.  If you want the number of accrued hours of leave to appear on the employee pay advice, select the
7. option Print on Pay Advice.
8. If you want to carry over the hours of leave that are accrued when you begin a new payroll year, select the option Carry Remaining Entitlement Over to Next Year.
9. In the Linked Wages Category field, select the wage category you set up earlier in this support note.
10. Click Employee. The Linked Employees window appears, displaying all employees.
11. Select the employees who are entitled to the leave.
12. Click OK. The Entitlements Information window reappears.
13. Click OK then click Close

End of Financial Year

The end of the financial year is fast approaching. Start planning for EOFY by speaking to your accountant NOW.

If you don't have your bookwork up-to-date, or if bookkeeping is the last thing on your mind right now, then how can you make an informed decision about your tax liabilities for te financial year?

To preparefor the end of the financial year is not as difficult or as daunting as the task may appear. If you have completed the quarterly BAS then you only have the last quarter to complete.

Consider any changes you would like to make to your business procedures. We can help put those plans into action.

Make sure you have all of your staff's correct details for the payment summaries. Review your Payroll, SGC. Start reviewing inventory, debtors and creditors. Check all pending invoices and purchase orders - do they still need to be on the system?

Superannuation rates & thresholds for 2012/13

1. The superannuation thresholds for the financial year ending June 30, 2013 have now been released by the Tax Office.
   
   
2. The superannuation contributions caps for 2012/13 are as follows:
   
• The concessional contributions cap is $25,000 for all members. However, members aged 50 years and over and have a balance of under $500,000 can contribute $50,000;
• The non-concessional contribution cap is $150,000. Members aged under 65 can bring forward 2 years contributions and can therefore contribute $450,000 over a 3 year period.
3. The Government has announced that, if passed by parliament, the concessional contributions cap will be permanently increased to $50,000 for members with superannuation balances below $500,000.
   
   
4. The Capital Gains Tax (CGT) rollover cap is not included in the non-concessional contributions cap. The lifetime CGT rollover cap for 2012/13 is $1.255 million, up from $1.205 million for 2011/12.
   
   
5. The low rate cap for superannuation lump sum benefits for 2012/13 is $175,000 up from $165,000 for 2011/12. This low rate cap amount is reduced by any amount previously applied to the low rate threshold.
   
   
6. Employment termination payments (ETP) made in consequence of termination of employment, is capped for 2012/13 at $175,000 for both life benefit and death benefit termination payments, up from $165,000 in 2011/12.
   
   
7. The minimum percentage withdrawal for pensions and annuities for 2012/13 are as follows:
   

   Age	Minimum Percentage Withdrawal
   Under 65	3%
   65-74	3.75%
   75-79	4.5%
   80-84	5.25%
   85-89	6.75%
   90-94	8.25%
   95 or more	10.5%

   
   
8. For the detailed key superannuation rates and thresholds from the Tax Office, go to www.ato.gov.au/super/PrintFriendly.aspx?ms=super&doc=/content/60489.htm