ASIC targets false declarations in the building and construction industry

ASIC’s surveillance program was set up in September 2013 to monitor the building and construction sector with particular regards to identifying illegal phoenix activities.

Feedback from the latest surveillance campaign uncovered larger companies are making false statutory declarations to claim payments for contracted work.

ASIC Commissioner Greg Tanzer said in a media statement that larger companies were sub-contracting smaller businesses to do a job, then claiming the cost but not paying the sub-contractors.

This substantially impacts the cash flow of small businesses affecting their ability to manage operating expenses and creditors.

Generally, false statutory declarations and matters of fraud are not dealt by ASIC, but under the Corporations Act ASIC can take civil or criminal action against company officers who knowingly make false statements.

Last year, ASIC banned 60 directors who engaged in misconduct including phoenix activities.

For more information, click here.

ATO sets guidelines on Bitcoins and other crypto-currencies

Generally, the Tax Office does not consider Bitcoins to be money, foreign currency nor a form of financial supply for GST purposes but instead views it to be an asset for capital gains tax purposes.

Capital events arising from the disposal of Bitcoins by individuals for personal consumption is disregarded provided that the cost of the Bitcoins is $10,000 or less.

However, individuals who purchase Bitcoins as a form of investment may be subject to capital gains tax upon disposal.

Businesses receiving Bitcoins as a form of payment for goods and services have to record ordinary income at the fair value obtained from a reputable Bitcoins exchange. Similarly, businesses are entitled to a deduction based on the fair value if business items are purchased using Bitcoins.

Any GST charged when receiving Bitcoins as payment can be claimed if the underlying supply of goods and services is a taxable supply.

Businesses dealing with Bitcoins for profit-making undertaking, such as the mining of Bitcoins, conducting Bitcoins exchange or providing Bitcoins ATMs, will need to treat Bitcoins transactions as assessable income and are required to account for them as trading stock at year end.

Finally, fringe benefits tax may apply if Bitcoins are used to remunerate an employee under a valid salary sacrifice arrangement. Under other circumstances, Bitcoins are treated as normal wages and are subject to PAYG withholding.

For more information, click here.

ATO focuses on profit allocation within professional firms

The Tax Office has become increasingly aware of professional firms exploiting different business structures to manipulate profits distributed to individual professional practitioners (IPP).

 

The Tax Office has issued guidelines regarding how professional firms may be assessed on their tax compliance risks associated with profit allocation.

 

The guidelines apply if:

• An IPP provides professional services to the firm’s clients or is actively involved in the management of the firm, and the IPP and/or associated entities have a legal or beneficial interest in the firm;
• The firm is structured as a partnership, trust or company; and 
• The income of the firm is not personal services income.

 

 

An IPP may be rated as low risk if one of the following guidelines are met:

• The IPP receives assessable income from the firm in their own hand as an appropriate return for the services rendered; and/or
• At least 50% of the income to which the IPP and their associated entities are collectively entitled in the relevant year is assessable in the hands of the IPP; or
• The IPP and their associated entities both have an effective tax rate of 30% or higher on the income received from the firm.

 

To determine an appropriate level of income, the taxpayer may use the level of remuneration paid to the highest band of professional employees providing equivalent services to the firm, or if there are no such employees in the firm, comparable firms or relevant industry benchmarks.

 

For more information, click here.

Donating cultural gifts

Gifts made to deductible gift recipients under the Cultural Gifts Program may be tax deductible. However, gifts made under a will are not deductible.

 

The Cultural Gifts Program aims to encourage the donation of culturally significant items to public art galleries, museums and libraries.

 

Eligible taxpayers will be able to claim a tax deduction for the gift or property donated at its market value.

 

Property donated under the program will also be exempt from capital gains tax. The deduction may be spread over a period of up to 5 years.

 

Some examples of property available for donation include:

• Indigenous arts;
• Cultural artefacts;
• Natural & scientific materials;
• Paintings;
• Manuscripts; and
• Books

For more information click here.

Employment termination payments – lifetime cap

Generally, an employer is required to pay an ETP to an employee upon termination of their employment.

The taxation of an ETP will depend on the type of payment, the employee’s age and length of employment.

All ETPs are subject to an annually indexed cap which is a lifetime cap.

Concessional tax treatment is applied to the portion of the ETP that does not exceed the lifetime cap. Any amount over the lifetime cap will be taxed at the highest marginal tax rate.

For the 2014/15 income year, the lifetime ETP cap is $185,000.

Where an ETP cap is wholly or partially used up in a particular year, the unused or nil balance will increase each year by the yearly cap increment.

For example, consider a taxpayer who has depleted their ETP cap of $180,000 in the 2013/14 income year and receives another ETP payment in a future year, where the cap is $200,000. The first $20,000 of the new ETP will be eligible for the concessional tax treatment before the highest marginal tax rate is applied to the remaining payment.

For more information, click here.

Payroll and FairWork Information Requirements

There are many legal obligations that an employer is bound by. As soon as you engage employees, you will most likely have tax and superannuation obligations at the least, and there are many more issues to consider when employing people.

It is the legal responsibility of the employer to pay the correct rate of pay, superannuation, taxes, and entitlements, and to abide by all the relevant employment related laws, including FairWork.


Employer Obligations Checklist

• Modern Awards: These are industry or occupation-based minimum employment standards which apply in addition to the National Employment Standards (NES). They were created to establish one set of minimum conditions for employers and employees across Australia who work in the same industries and occupations. Almost every worker in Australia is covered by a Modern Award. While there are still some State-based awards in operation, these do not apply to employers and employees covered by the Fair Work Act 2009.
• National Employment Standards: The NES contain 10 minimum workplace entitlements which have applied to all employers and employees in the national workplace relations system since 1 January 2010, (however only certain entitlements apply to casual employees). These are legally-enforceable minimum employment terms and conditions.
• Fair Work Information Statement: All employers covered by the national workplace relations system have an obligation to give each new employee a Fair Work Information Statement before, or as soon as possible after, the employee starts employment.
• Fair Work Compliance: It is unlawful to ask people to work on unpaid trials, pay in goods rather than money, pressure employees into agreements, coerce employees or third parties to not exercise their rights, discriminate, terminate unfairly, and engage in ‘sham contracting’ arrangements. Heavy penalties apply for breaches of these laws.
• Dispute Resolution: Modern awards generally impose a process to assist in the resolution of disputes that arise about matters under the award or in relation to the NES. If the dispute can’t be resolved at the workplace level, the matter can generally be referred to the Fair Work Commission.
• Record-Keeping: According to the Fair Work Ombudsman (FWO), records need to be kept for 7 years, while the ATO says 5 years. Err on the side of caution and keep ALL payroll related records for 7 years.
• Superannuation Choice Form: An employer must provide a Superannuation Choice Form to all employees on commencement of employment and you must abide by that choice. If the employee does not make a specific choice, you must pay superannuation into a default superannuation fund.

Other Employment Obligations
Being an employer means more than simply paying your employees. There are various government bodies that you must report to. There are also various laws that govern your responsibilities as an employer.
FairWork governs many areas related to employment, for example:
Employee entitlements such as: annual leave, hours of work, flexibility arrangements, anti-bullying laws, penalty rates, working on public holidays and much more.
Examples of other areas covered are employment contracts, unfair dismissal, termination of employment, change of business ownership and record keeping obligations.


You May Need to Pay All or Some of These Taxes and Expenses:

PAYG Withholding to the ATO
Superannuation to a Clearing House or Superannuation Fund
Fringe Benefits Tax to the ATO
Payroll Tax to the State Revenue Office
Workers Compensation Insurance

You May be Governed by All or Some of These Laws:

FairWork Act 2009
Pay As You Go Act 1999
Superannuation Guarantee Act 1992
Workplace Health and Safety State laws
Payroll tax State laws
Long Service Leave State laws
Workplace Relations Act 1996
Privacy Act 1988
Freedom of Information Act 1982
Independent Contractors Act 2006
Anti-Discrimination Act 1977
Workplace Gender Equality Act 2012
Child Support Act 1989
Paid Parental Leave Act 2012

…And there may be other laws, relevant to your state or industry, that are applicable to you.


Further Advice, Information and Templates
FairWork
Department of Human Services
Australian Taxation Office
Guide to Employing People


For Professional Assistance ICB recommends
Workforce Guardian
The Association for Payroll Specialists

Debunking Myths About Fixed Fees

Value Based Pricing - Explaining what it really is….
There are many reasons that the fixed fee argument is being thrown at the bookkeeping and accounting market.

The reason today is that the software companies are automating what they perceive to be the bulk of what accountants and bookkeepers do, so they are trying to give these professionals a way to keep their fees up at the same level they were before.
The theory:

• You used to take this long to do something and therefore you used to bill a certain amount for doing that work.
• The previous bill amount is now to be the “fixed fee” or the “value” that you will bill from now on.
• Now use the latest greatest technology and pay the software company for that technology, (and probably on-sell the software to your clients).
• Because you are using the latest greatest technology, you will do the work in less time.
• You spend less time on it but the output to the client is the same so therefore they should pay the same “fixed fee” or “value”.

There is absolute validity to this position!

When a bookkeeper or accountant first starts doing their thing with a new client, they are not as quick, probably not as thorough nor as good as they will be the second or third time they do things. As you work with more clients or the same client more times you get quicker and better at providing your service. The client should not be the only one who wins out of that equation.

The concept of billing to the value provided is not new.

Currently and in the past: bills were calculated from timesheets that recorded how much time it took; hours were then billed at an agreed charge rate to work out the invoice amount. The scenario within the accounting or bookkeeping firm was that as someone got quicker, or better, or more qualified, their charge rate would go up! Also the person is likely to be being paid more so the costs are up, therefore the revenue needs to go up. As the speed of delivery improved, the charge rate also went up and the client in theory pays the same, whether a slow low-charge person did the job, or a quick high-charge person.
As a person’s knowledge increased, skill increased or expertise in a particular area increased, or became more specialised, the charge rate increased.

Fixed Fee by another name?
A normal concept in manufacturing, or in fact in some service delivery professions is a concept of “Standard Costing”.

This is where it is decided that a particular product will cost $X to manufacture. These costs may include parts and labour but someone has worked out all the components and costed them. The cost of production is calculated accordingly to a “standard cost”. They apply the required profit margin and the result is a “standard sale price”. I am tempted to call it a “fixed fee” or a “value based” billing method.

In a service firm, a person looks at the service (maybe a “standard service”) and estimates how much time it will take and how much the person costs to deliver that service. So wages, (or fee expected), plus on-costs, plus travel time, plus down time, plus margin required. This amounts to how much the “standard service” would be billed at. This sounds very much like a fixed fee type calculation.

What happens when too much time is spent?
In the standard costing arena or when say a construction contract has been signed for a fixed fee/quoted amount, the arrangement typically then allows for “variations”. When the material costs more, the job took longer than it should, it rained, the supplier puts in a variation claim and the fixed fee changes.

In our world this could happen when the amount of work changes, the scope of work changes or something unexpected happened or was found and it required you to spend more time or incur more costs; therefore you communicate this with the client and charge more as agreed.

Fixed Fees is a valid billing technique!

How do you know if Fixed Fee billing is working?
Standard costing techniques are used to streamline costing and allocation procedures. If you like, to simplify the allocation of costs to each output and help work out whether that output is contributing to the profit of the business.

A business using standard costing will look at how many units of something it produced, and based on the standard costs, calculate how much it should have cost to produce those outputs. That standard costing is compared to how much was actually spent and if the actual expenditure is more than “standard” then the “standard” is reviewed and a new standard price calculated for the next set of costings and price setting.

How does a professional bookkeeping service firm, using fixed fees, know if the fixed fee is working for them?
You would review how much revenue had come in from your Fixed Fees.
Compare that to the costs of operating the business; rent, people, software, insurance, registrations, etc.

If you made enough money then the fixed fee would be working for you.
If not, then you need to up the fees.

How do you set your fixed fee?
Think of a routine period of time. For a bookkeeper you may need to break this down into how many of each activity you will do over a year.
How many end of year payroll?
How many TPAR?
How many activity statements will you lodge?
How many weekly reporting jobs will you do?
How many other activities?

It may be useful to allocate a weighting or percentage to each activity to assist in working out how to charge. For example, 40% of time is spent on general bookkeeping, 5% on TPAR, 10% on EOY payroll, 40% on activity statements, 5% on other.
Then you can average out costs based on what percentage of your time an activity would usually take.

Then add an amount in excess of your direct costs, which will go towards covering the rest of the operating costs.

Accountants have always adjusted fees to a commercial value. Bookkeepers can do the same. Keep abreast of industry norms by talking to your peers and staying up-to-date with trends.

See this ICB resource for more thoughts about Moving to Fixed Fees

Retention Payments in the Building and Construction Industry

What is a Retention?
Retentions are used in the Building and Construction industry to secure performance of a project. Retention is money held back from contract fees to protect against defects which could develop and the contractor fails to fix. This amount is usually 5% of the full contract fee though this can be 3% for larger work. The retention value is reduced from the Progress Invoice raised for each stage of the Contract.
The percentage, proprietor’s right to retain these amounts and the builder’s entitlement for the release of these funds are usually outlined in an agreement between both parties prior to commencement of works stating what the conditions of the retention are.

What are the GST Implications of Retentions?
Once the retention amount is released to the builder GST applies in the same way as it would to progress payments under the building contract. It is not considered a separate supply but part of the original supply under the original contract.
If the retention amount is not paid to the builder then the amount withheld is considered a reduction of the supply in the original contract. As a bookkeeping entry this would be considered a bad debt.
ATO for further information: Goods and Services Tax Ruling GSTR 2000/29

30. Retention payments
If a supply is made under a contract where the recipient has retained part of the contract price pending full and satisfactory performance of the contract, or until the end of a defects liability period, the price of what is supplied is the total consideration payable including the retention amount. The tax invoice must contain enough information to enable the total price of this supply to be clearly ascertained. However, the tax invoice can also show the net amount payable while still satisfying this requirement. For example, the tax invoice may set out the price of what is supplied, separately show the retention amount, and show a net amount payable.
100. The effect of the particular attribution rule is to defer attribution of the part of GST payable or the part of input tax credit that relates to the retention amount until the amount is actually received or provided, or a document notifying an obligation to pay the retention amount is issued in relation to that amount following expiry of the defects liability period.

Bookkeeping Process
Scenario:
Bob the Builder has signed an agreement with a building company to build a new office. The total cost of the work to the building company will be $100,000 exc GST. A retention of 5% being $5,000 is to be withheld for a period of 6 months after completion of the building. Setup new Account
You need to set up 3 new accounts

• Liability – Deferred Retentions
• Income – Less: Retentions
• Asset – Retention Debtors

Follow up Diary Contact
Recommend to create a re-contact diary entry to follow up the retention value after the expiry period to withhold the retention.

Create the Sale less Retention
The invoice to the client will differ to the bookkeeping entry required for retentions. It is recommend to create the sale for the client and print and send and then return to the sale and add the additional transactions for the retention movement.
The GST doesn’t need to be paid until the retention has been paid so how do you allocate that within your invoicing especially if you are accrual based?

Client Invoice

Invoice	Account	Credit	Tax
Project X Contract Building (Full Contract Value)	Income	$100,000	GST
Less: 5% Retention Withheld	Income	-$5,000	GST
Plus GST		$9,500
Total Invoice		$114,500

Invoice bookkeeping entry would be split into 3 account groups as per below: Edit the above invoice and add the retention accounts.

• Line 1 – CR Full Amount of Contract
• Line 2 – DR Negative figure of the 5% retention value allocated to new Income Retention Account
• Line 3 – CR Deferred Retention value to be withheld
• Line 4 – DR Retention Debtors
• Leaves the Total Value of Contract + GST on value less retention

Invoice Bookkeeping Entry	Account	Debit	Credit	Tax
Contract Building (Full Contract Value)	Income		$100,000	GST
Less: Retentions Withheld	Income	$5,000		GST
Deferred Retention Withheld	Liability		$5,000	No Tax
Retention Debtor	Asset	$5,000		No Tax
Trade Debtors	Asset	$104,500		No Tax
GST Collected			$9,500	No Tax
	TOTAL	$114,500	$114,500

By entering the invoice as above your receivables only shows the amount owing excluding the retention. Your GST collected account will also only reflect the GST collected on the contract fees less the retention. The retention owed will then show in the asset and liability section of your balance sheet.
Recommend to add a Job to the Retention transaction to provide additional reporting for reconciliation purposes and Job information in the memo field if available
The same journals apply it you are invoicing for an interim or progress payment.

Invoicing and allocating for the Retention
Once the contract has been finalised and the retention period has expired you need to invoice for the retention. You would just do a sales invoice as normal and ensure that you use the GST code to account for the GST on the retention which was not accounted for previously. This will now show in your Debtors reports.
Client Invoice

Invoice	Account	Credit	Tax
Project X Contract Building (Full Contract Value)	Income	$100,000	GST
Less: 5% Retention Withheld	Income	-$5,000	GST
Plus GST		$9,500
Total Invoice		$114,500

Invoice bookkeeping entry would be split into 3 account groups as per below: Edit the above invoice and add the retention accounts.

• Line 1 – CR Full Amount of Contract
• Line 2 – DR Negative figure of the 5% retention value allocated to new Income Retention Account
• Line 3 – CR Deferred Retention value to be withheld
• Line 4 – DR Retention Debtors
• Leaves the Total Value of Contract + GST on value less retention

Invoice Bookkeeping Entry	Account	Debit	Credit	Tax
Contract Building (Full Contract Value)	Income		$100,000	GST
Less: Retentions Withheld	Income	$5,000		GST
Deferred Retention Withheld	Liability		$5,000	No Tax
Retention Debtor	Asset	$5,000		No Tax
Trade Debtors	Asset	$104,500		No Tax
GST Collected			$9,500	No Tax
	TOTAL	$114,500	$114,500

By entering the invoice as above your receivables only shows the amount owing excluding the retention. Your GST collected account will also only reflect the GST collected on the contract fees less the retention. The retention owed will then show in the asset and liability section of your balance sheet.

Recommend to add a Job to the Retention transaction to provide additional reporting for reconciliation purposes and Job information in the memo field if available
The same journals apply it you are invoicing for an interim or progress payment.

Invoicing and allocating for the Retention
Once the contract has been finalised and the retention period has expired you need to invoice for the retention. You would just do a sales invoice as normal and ensure that you use the GST code to account for the GST on the retention which was not accounted for previously. This will now show in your Debtors reports.

How to Use the Clean Up Company Feature in Reckon Accounts

Which transactions can I remove? The Clean Up Company Data wizard offers several options for cleaning up your company data file. You make these selections in steps as you progress through the wizard.

Remove transactions as of a specific date
Remove all closed transactions on and before the date you specify. Open transactions for the specified period will not be affected.

Remove all transactions
Remove all transactions from the company file. This option will cause Reckon Accounts to retain all customer and supplier names, and all items, but will delete all associated transactions. Selecting this option is like starting a new company without having to enter all the names and items over again.

Remove additional transactions as specified
Remove uncleared bank and credit card transactions, transactions marked to be printed, transactions marked to be sent, and transactions that contain unreimbursed costs.

Remove unused list items
Remove the unused list items that cleaning up leaves behind

Which transactions are not normally removed?
Normally, transactions can't be removed if they have:

• open balances
• reimbursable expenses that have not been reimbursed

Or if they if they are:
Payroll transactions from the current year

• not reconciled
• marked to be printed or emailed
• online cheques waiting to be sent or cheques with associated pending payment inquiries
• linked to other transactions that can't be removed
• payments that have not yet been deposited

Options in the Clean Up Company Data wizard allow you to override some of these rules and improve the effectiveness of the clean-up process. You can also choose to remove unused list items to further refine the process.

Small Business Owners - The ATO is listening

The ATO are committed to making life easier for small business - that's why they're inviting small business owners to join their Small Business Consultation Panel.

Panel members may have the chance to participate in various short-term activities, such as testing new products and providing your opinions. Plus, you'll be paid for your services.

They're looking for small business owners who:

• have been in business for more than two years and have an annual turnover of less than $2 million
• are interested in providing practical business and industry expertise
• are located in (or willing to travel to) Brisbane, Canberra, Sydney, or Melbourne.

The insight of small business owners will help simplify interactions with the ATO and help the ATO cut red tape. The ATO want to explore opportunities to reduce the time it takes for business operators to comply with their obligations, so they have more time to focus on running their business.

Find out more or join the Small Business Consultation Panel today by emailing smallbusinessconsultation@ato.gov.au to request an application pack

GST calculation Worksheet

When you open the BAS mail pack - do you discard or use the GST calculation Worksheet?
From Quarter 1 2014/2015, the GST calculation worksheet will no longer be included as part of the BAS mail pack sent out to business owners.

If you use the worksheet and require a copy you will still be able to access an electronic (and printable) version here interactive GST calculation worksheet for the BAS

Tipping for Services

Do You Pay GST on the Tip Received?
What happens when a customer pays a tip?
Does the business owner have to pay GST to the ATO?
Does it get reported on the BAS?
What happens with tipping depends on how the customer is tipped and how the entity passes that tip on (If they do!)

Voluntary Tipping For a voluntary tip that is passed onto employees or contractor from the owner of the business there is no GST payable as this is NOT deemed a taxable supply to the business owner. Nor are you required to report the tips as Income on the Activity Statement or Income Tax Return. However, if a voluntary tip is NOT passed onto the employees then it becomes part of the taxable supply and GST must be paid. If a contractor does not provide an ABN then 49% must be withheld from the tip. Equally you do NOT have to deduct pay as you go withholding (PAYGW) from the tips of the employees. Non-Voluntary Tipping If a tip is not voluntary – for example a pre-set tip amount is set as part of the service charge; then this is considered part of the taxable supply and GST is paid and the income is reportable on the activity statement. If you pay these tips to employees or contractors, you can claim a deduction and deduct PAYGW and report on their payment summaries.

Employees
Employees receiving tips directly from a customer or from the employer must report the tips as income.

Record Keeping
It is important to keep records that show how much of the tips received have been passed onto the employees, and if any of the tips have been kept by the owner as part of the business income.

Bookkeeping Process
Processing tips from a Z-Read or POS Summary sheet, it’s important to separate the tips in the accounting process.
For further information:
ATO Reference to Tips and Gratuities
ATO Law Reference – GST and Restaurant Tips

ATO App for your smart phone & tablet

Individuals, small business owners and trustees of self-managed super funds can now access a range of ATO information via smart phone or tablet.
The ATO smart phone app is compatible with most smart phones and tablets using:

• iOS 5 and later
• Android™ OS 2.3.3 – 2.3.7 and OS 4* and later
• Windows Phone 8.

Individuals can lodge tax returns, track lost super, update financial institution details and more.

Businesses can calculate fuel tax credits, employees' PAYGW and superannuation and more.  See the ATO app for more details

Minimum information requirements on employee pay slips

Employers are obligated to issue pay slips to their employees in a timely manner with the required information regarding their pay.

Pay slips must be given to employees within 1 working day of their pay day, even if the employees are on leave.

Pay slips must be issued in an electronic format or hard copy. Electronic pay slips should be in an easy to print format and contain the same information as hard copy pay slips.

The details of an employee's pay covered in their pay slips include:

• Employer's and employee's name
• Employer's Australian Business Number
• Pay period
• Date of payment
• Gross and net pay
• The hourly rate and number of hours worked
• Any loadings; allowances, bonuses, incentive-based payments, penalty rates or other paid entitlements
• Any deductions from the employee's pay
• Any superannuation contributions paid for the employee's benefit.

Though not required, it is recommended that the balances of the employees' leave be shown on their pay slips.

A pay slip template can be accessed from the Fair Work website.

Click here for more information.

Rules for correcting GST errors

The Tax Office offers a guide on how to correct GST errors made on earlier activity statements on a later activity statement provided certain conditions are met.

 

A GST error is a mistake made in working out the net GST amount when you report too much GST or report too little GST.

 

Errors made in relation to fuel tax credits, wine equalisation tax or luxury car tax are not considered to be GST errors.

 

To correct GST errors which resulted in you paying too much, all of the following conditions must be satisfied:

• The correction is made within the 4 year time limit;
• It is not subject to a compliance activity; and
• It has not already been corrected in another reporting period.

 

To correct GST errors which resulted in you paying too little, all of the following conditions must be satisfied:

• It is not subject to a compliance activity;
• It has not already been corrected in another reporting period;
• The error was not a result of recklessness or intentional disregard of a GST law;
• The correction is made within the period that is determined by your GST turnover, which is either 12 or 18 months; and
• The net sum of the error is within the taxpayer’s error value limit.

Click here to access the guide.

 

Amending Payment Summaries

There are various reasons why you would need to amend a payment summary and the following outlines just a few:

• If you made a mistake with any of the amounts in your completed PAYG payment summary statement and you have already sent it to the ATO
• If you have amended any of the amounts of the payment summaries issued to payees
• If you are sending payment summaries that you did not send before
• If you reported an incorrect RESC value
• If you did not include all the wages categories used throughout the payroll year

There is a process that the ATO requires you to follow in sending an amended EMPDUPE file or NEW payment summary. All amendments must be reported to the ATO within 21 days after providing the amended payment summary to the employee.

From the ATO website:
The amended annual report file must only contain amended payment summaries and any additional original payment summaries that were not reported in a prior annual report for the same financial year. Do not include payment summaries that were previously sent and were not amended.


Lodging Electroncially:
It is possible to lodge amended PAYG Payment Summary electronically with the ATO using the BAS portal if your software produces an amended EMPDUPE file. The following shows the process for the main accounting software packages and where this isn’t possible, the manual process.

 

 

MYOB
Current versions of MYOB are unable to create an amended EMPDUPE file, therefore our solution is to lodge the Amended Payment Summary using GovReports.

1. Use MYOB to re-issue the payment summary to the employee/s
2. Re-create the EMPDUPE file—MYOB will create the EMPDUPE file with all employees in it
3. Upload to GovReports and ONLY tick the employee/s that have been amended—do not re-lodge all employees (unless all have been amended)
4. OR manually create the amended payment summary following the GovReports instructions, manually entering values for selected employee/s

Reckon

1. Un-publish the original payment summaries—you need to un-publish all employees
2. Make the corrections to the relevant employee/s
3. Re-generate payment summaries
4. Select those employees that need to be amended by selecting “yes” to be amended
5. Select “Publish All” to republish
6. Select General EMPDUPE file - you then get an option to download all payment summaries OR amended payments summaries only.
7. Select “Amended” which will then download the new EMPDUPE file

Intuit Quickbooks Online

1. Go to the Employees menu and click Process Payment Summaries.
2. Select the Tax Year (do not select any tax year prior to 2007/08).
3. Select Generate Payment Summaries as 'Amended'.
4. In the employees list, select only the employees that have had payment summary information amended.
5. Click OK.
6. Click Electronic File to create an EMPDUPE file and select a location to save it. The EMPDUPE file will indicate that the payment summary has been amended

Xero

1. Un-publish the original payment summary of the employee/s you need to amend—this will unlock the payroll data. You only need to un-publish the payment summaries you need to amend.
2. Make corrections to relevant employee/s
3. Publish the payment summary for relevant employee/s and tick YES to produce an amended payment summary
4. Reprint or email the amended payment summary to the employee/s
5. Remember you cannot report ETP amounts in Xero, the ETP payment summary must be done manually on the ATO form and posted to the ATO.

See this link for the full how-to instructions:
Xero Help - xero.com/help/PayrollEOFYTroubleshoot.htm


Saasu

Saasu does not currently have the facility to produce an amended payment summary.

1. Make corrections to relevant employee/s
2. Re-create the payment summaries. Saasu will produce payment summaries for all employees
3. The EMPDUPE file will include all employees whether they have been amended or not
4. See the instructions above for MYOB. Lodge the amended EMPDUPE file via GovReports or the PAYG payment summary statement paper form via mail to the ATO.

Lodging via Mail
If your software does not produce an amended payment summary and you do not have a GovReports subscription, you will need to lodge the amended payment summary statement via mail, by completing a paper form and posting it to the ATO.

You will need to order the paper forms.

Mail form to:
Australian Taxation Office
Locked Bag 50
PENRITH NSW 2740

Looking ahead for the Payroll Year 2014/15

If your payroll has 53 weekly or 27 fortnightly pay periods, you may need to withhold extra tax.

 Using the usual weekly or fortnightly tax tables may result in a shortfall of tax paid by the employee.

The employer should notify the employees early in the year if this is the case, and give the employees the option to have extra tax withheld as per the ATO guidelines for this situation.

 

When there are 53 pay periods in a financial year
In some years, you may have 53 pay periods instead of the usual 52.

As the tax schedule is based on 52 pays, the extra pay may result in insufficient amounts being withheld. You should let your employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amount in the table below.
 

Weekly Earnings               PAYG to Withhold
$725 to $1,524                  Additional PAYG $3
$1,525 to $3,449               Additional PAYG $4
$3,450 and over                Additional PAYG $10

 

 

 

When there are 27 pay periods in a financial year
In some years, you may have 27 pay periods instead of the usual 26.

As the tax schedule is based on 26 pays, the extra pay may result in insufficient amounts being withheld. You should let employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amounts in the table below.
 

Fortnightly Earnings         PAYG to Withhold
$1,400 to $3,049              Additional PAYG $12
$3,050 to $6,799              Additional PAYG $17
$6,800 and over               Additional PAYG $42

Reportable Employer Superannuation Contributions

Reportable employer superannuation contributions are additional contributions made to a superannuation fund on behalf of an employee.
Reportable contributions must be reported on an employee's payment summary because they may affect the employee's tax liability and their eligibility for various government benefits.
Generally, reportable contributions include:

• Contributions made under a salary sacrifice arrangement; and
• Additional amounts paid to an employee's superannuation fund as directed by the employee.

Extra superannuation contributions negotiated under an individual employment contract are usually considered reportable contributions, unless either of the following is demonstrated:

• The additional contributions are made for administrative simplicity; or
• A policy is documented, proving that the employee is not allowed to influence the contributions made by the employer on their behalf.

The following items are not regarded as reportable contributions:

• All superannuation guarantee contributions (minimum compulsory contributions);
• Compulsory contributions required by the governing rules of a superannuation fund or by a Commonwealth, state or territory law; and
• Employer contributions made under a collectively negotiated industrial agreement.

Click here for more information.

Proposed changes to fuel tax credits

Fuel tax credits provide a credit for any fuel tax (excise or customs duty) included in the price of fuel used in business activities, machinery, plant and equipment or heavy vehicles.


From July 1, 2014, if legislation remains unchanged, most fuel tax credit rates will change due to increases in the carbon charge amounts.


However, in the 2014-15 Budget, the Government announced that they proposed to remove the carbon charge.


If legislated, this amendment will be effective from July 1, 2014.


In addition, the Government has proposed to index the excise duty rates for most fuels every six months from August 1, 2014.


The current fuel tax credit rate for heavy vehicles travelling on public roads has remained the same since July 1, 2013 at 12.003 cents per litre.


For more information, click here.

Exporting Memorised Reports in Reckon

How to Export memorised reports from one Reckon Accounts file and import into another Memorised reports are a very useful feature of Reckon Accounts. After modifying a report, there is an option to memorise that report. Memorising a report means that Reckon Accounts will save all the modifications for the next time the report is generated. Like reports can be memorised and saved in Memorised Report Groups. These groups are accessed from the Memorised Report List. Navigate to drop down menu Reports > Memorised Reports > Memorised Report List. The Memorised Report Groups are displayed in bold. The reports in that group are listed under the heading. Highlight the Memorised Report Group to export. Navigate to drop down menu Memorised Report > Export Template. .  Name the Memorised Report Group file. Click Save. .  Open the new Reckon Accounts file. . Navigate to drop down menu Reports > Memorised Reports > Memorised Report List. Navigate to drop down menu Memorised Report > Export Template. . Browse to the Memorised Report Group file. Click Open. Click OK. The new Memorised Report Group has been added to the Memorised Report List.

Should employees be paid for hours worked outside their ordinary roster?

It is a common practice in many industries to require an employee to arrive at work before the start of their roster or stay back after the end of their shift.

Additional time worked by the employees outside of their ordinary shift or roster is considered worked hours and employees must be paid for this time if their employment is covered by:

• A modern award; or
• The National Minimum Wage.

Employees should also be paid for time spent attending meetings or compulsory training events.

When planning staff rosters, extra time may need to be accounted for and consideration needs to be made as to whether these hours will result in employee overtime.

For more information, click here.