Company directors - Avoid becoming personally liable for unpaid super guarantee

Generally, where a company does not submit superannuation guarantee by the 28th day after the end of the quarter, it has to lodge a SGC statement and pay the amounts outstanding on behalf of the employees.

After exposure drafts and community consultation, legislation came into effect on June 29, 2012 making directors personally liable to pay penalties for outstanding SGC.

The Tax Office recently released a media statement reminding company directors that they need to ensure that their superannuation guarantee obligations are up to date.

Directors whose company has not paid the superannuation guarantee for the June 2012 quarter and has not lodged the overdue SGC statement with the Tax Office by November 28, 2012 may be personally liable for any outstanding SGC.

Severe penalties may apply where the SGC statement has not been lodged by the due date.

To access the Tax Office SGC statement and calculator, please click here.

Holding a Christmas Party? Watch out for FBT...

With Christmas fast approaching and thoughts turning to Christmas parties and year end celebrations, employers need to remember that the provision of 'meal entertainment' to employees may have FBT implications.

The Tax Office states that 'meal entertainment' includes:

• • The provision of entertainment by way of food and/or drink (e.g. restaurant meals and alcohol); and
    
  • The provision of accommodation or travel in connection with this entertainment (e.g. taxi fares).

Below is a summary of the tax implications of Christmas functions:

Event	FBT?	Tax Deduction?	Claim GST?
Purchase employee gift costing less than $300	No	Yes	Yes
Purchase employee gift costing more than $300	Yes	Yes	Yes
Party held on premises regardless of cost per head for employee	No	No	No
Party on premises – spouse	Only if benefit is more than $300 per head	Only if benefit is more than $300 per head	Only if benefit is more than $300 per head
Party off premises – employees & spouses	Only if benefit is more than $300 per head	Only if benefit is more than $300 per head	Only if benefit is more than $300 per head
Benefits provided to clients	No	No	No

Super guarantee contributions for individual employees are capped

1. Superannuation guarantee (SG) contributions are compulsory superannuation contributions made by employers on behalf of their employees. Currently, employers must contribute the equivalent of 9 per cent of an employee’s salary into their superannuation fund.
2. These contributions are generally required if an employee is aged between 18 and 69 inclusive and their wage before tax exceeds $450 per month [note that the age limit of 70 will be removed from July 1, 2013].
   
   The maximum amount of SG required is determined using the maximum super contribution base threshold. This threshold specifies the maximum of an individual employee’s gross earnings on which SG has to be paid for each quarter of any financial year.
   
3. The maximum super contribution base is indexed in line with the average weekly ordinary time earnings (AWOTE) each income year and the new indexed amount is generally available each May.
   
   Following is a list of thresholds for the current and earlier financial years:

Income year	Per quarter
2012-13	$45,750
2011-12	$43,820
2010-11	$42,220
2009-10	$40,170

6. Thus, for the 2012-13 year, the maximum compulsory SG contribution required to be made on behalf of an employee earning over $45,750 per quarter is $4,118 per quarter.

Five Benefits to lodging your BAS on time

As we approach the ‘silly season’ many small business owners are busy tackling the day-to-day tasks that come with running a business.  Lodging your BAS on time, not only fulfils your obligations,  it can also be beneficial to your business.

How your business is tracking

Lodging your BAS on time, every quarter, provides you with a snapshot of your business financial position.  From quarter to quarter you will be able to track your business performance & growth. Also you have the added advantage of any discussions with your financial advisers will be on the most up-to-date details of your business.

 

Avoid late penalties

If you don’t lodge your BAS on time with the ATO you may be subjected to a failure to lodge penalty.  The fines can vary in amounts & can be higher if you have poor lodgement history. By lodging your BAS on time, your business will avoid any late penalties.
 

Keep a good lodgement history

If you find yourself in a situation that may require a deferral of payment or if you need to organise s payment arrangement, a good lodgement history will give you an advantage. Lodging your BAS on time means that you maintain a good lodgement history with the ATO.

You will have time to organize a payment arrangement

The ATO understands that debt can be a temporary unforseen problem or a cashflow problem, caused by personal circumstances or a short-term downturn.  To help, the ATO offers assistance to small business experiencing financial difficulties by offering them the option of a payment arrangement.

In some cases the ATO offers payment arrangements for activity statement debt, free of general interest charge for up to 12 months.  These payment arrangements are aimed at providing assistance to small business that have a good lodgement history, but are experiencing short-term financial difficulty.

To find out more about ATO assistance visit www.ato.gov.au/debt or contact the ATO on 13 28 66

 

More time to focus on running your business

The ATO are aware that small business owners have many things drawing their attention.  By lodging on time you can direct your attention back to your business.

Remember, even if you cannot pay on time, you still need to lodge your activity statements by: 

28 October,   28 February,   28 April   &   28 July each year

GST and imported goods

If you are registered for GST and import goods in the course of your business, you can claim input  ax credits for any GST paid on the importation of goods. Most goods imported into Australia will be subject to GST unless:

• The goods would have been GST-free or input-taxed if supplied within Australia; or
• The goods qualify for certain customs duty concessions (including goods with a customs value of less than $1,000)

The amount of the GST is 10% of the value of a 'taxable importation' and is payable to The Australian Customs Service.

 

The value of a 'taxable importation' includes:

• The customs value of the goods;
• Any customs duty payable;
• Costs incurred to transport the goods to the port or airport of final destination in Australia, including insurance; and
• Any wine equalisation tax payable.

You may be able to defer the payment of GST on imported goods by participating in the Deferred GST Scheme which allows you to defer the payment of GST on taxable importations until the first Business Activity Statement you lodge after the goods are imported.

The Tax Office has recently updated its guide 'GST and imported goods'. Click here to access this guide.