Gossip Day

Have you heard the latest gossip from the tax office?

In order to claim a tax deduction for payments to workers you need to have complied with PAYGW and reporting obligations.
What does it mean? You need to tax your employees properly, using the ATO tax & HECS/HELP/Study loan scales. And you must report (STP/BAS/Payment summaries).

If you are paying contractors – you need to run the employee vs contractor test to make sure they genuinely are contractors. If the contractors invoice doesn’t include a legit, ABN you’ll need to withhold tax at the top rate.

Don’t rely on the rumour mill at the pub – make sure you discuss possible issues with your BAS agent before you get caught with your pants down!

http://www.ato.gov.au/General/Gen/Removing-tax-deductibility-of-non-compliant-payments/