Protecting business doing the right thing Visiting businesses around Australia UNCLASSIFIED – PROTECTING HONEST BUSINESS
Welcome and overview • why we are visiting small businesses • previous visits - what we found • the visit process - what to expect UNCLASSIFIED – PROTECTING HONEST BUSINESS 2
Tax gap and the black economy • almost 90% of income tax from small businesses is paid voluntarily - around $76 billion • small business income tax gap is estimated to be 12.5% or $11.1 billion • over $7 billion is attributed to black economy behaviour • black economy costs Australia as much as $50 billion, approximately 3% of Gross Domestic Product (GDP) ato.gov.au/smallbiztaxgap UNCLASSIFIED – PROTECTING HONEST BUSINESS 3
Tax gap and the black economy • Black Economy Taskforce - 80 recommendations • changes to policy and law settings to make it easier to comply and hard not to • increased visibility of enforcement activities ato.gov.au/smallbiztaxgap UNCLASSIFIED – PROTECTING HONEST BUSINESS 4
Why are we visiting? • unreported sales and income • over-claiming expenses • outstanding lodgments • businesses operating outside the tax system • support for small business • addressing those deliberately doing the wrong thing UNCLASSIFIED – PROTECTING HONEST BUSINESS 5
How do we identify incorrect business practices? • data matching • risk modelling • small business benchmarks • reports from the community UNCLASSIFIED – PROTECTING HONEST BUSINESS 6
What we found in other visits Practices that cause us concern no cash register, till or point of sale (POS) system; putting money in your pocket or a shoebox misrepresenting or underreporting income (e.g. by using an electronic sales suppression tool) paying for private expenses not keeping records not having a business bank account not paying family and friends who help out not lodging activity statements or returns UNCLASSIFIED – PROTECTING HONEST BUSINESS 7
What we found in other visits Getting it right record all sales, income and expenses keep cash in a safe place consider electronic record keeping and payment systems Save time and money, and reduce the chance of mistakes and theft. ato.gov.au/electronicrecordkeeping ato.gov.au/electronicpayments UNCLASSIFIED – PROTECTING HONEST BUSINESS 8
How to identify ATO officers • ATO field staff carry identification • they may give you an ATO business card or have an ATO name badge • if you’re unsure, call the ATO switchboard on 13 28 69 UNCLASSIFIED – PROTECTING HONEST BUSINESS 9
What to expect when we visit • record keeping and payment systems • employer obligations • outstanding lodgments • payment options for outstanding amounts • providing advice and answering questions UNCLASSIFIED – PROTECTING HONEST BUSINESS 10
What will happen after we visit Depending on what we find during the visit, we may contact you at a later stage to follow up. We may contact you about: • record keeping and employer workshops • ensuring your registrations are correct • correcting mistakes • further investigation or an audit UNCLASSIFIED – PROTECTING HONEST BUSINESS 11
Key messages UNCLASSIFIED – PROTECTING HONEST BUSINESS
Key things for employers Superannuation • employers need to pay superannuation to eligible employees • not sure if your worker is an employee? Try the ‘Employee/Contractor decision tool’ • super is not another tax, and it is not government revenue • super provides income for workers when they retire ato.gov.au/employers ato.gov.au/superquickcheck UNCLASSIFIED – PROTECTING HONEST BUSINESS 13
Key things for employers cont… Single Touch Payroll (STP) • Start reporting now • Request a deferral if more time is needed • micro employers (1 - 4 employees) o even more flexible options: list of free or low cost solutions (less than $10 a month) available at ato.gov.au/STPsolutions o Consider applying for a quarterly reporting concession ato.gov.au/STP UNCLASSIFIED – PROTECTING HONEST BUSINESS 14
Key things for employers cont… Single Touch Payroll – quarterly reporting • Employers who rely heavily on their tax agent • Closely held payees • Seasonal and intermittent employees • Not for profit, Agriculture, Fishing and Forestry Industry ato.gov.au/STP UNCLASSIFIED – PROTECTING HONEST BUSINESS 14
Key things for employers cont… Claiming deductions for payments • from 1 July 2019, you can only claim deductions for payments you make to your employees if you: o withhold pay as you go (PAYG) withholding before you make the payment o report the amount to us • this also applies to contractors who haven’t provided you with their ABN • if needed, make a voluntary disclosure or correct your mistake as soon as possible ato.gov.au/PAYGWdeductions UNCLASSIFIED – PROTECTING HONEST BUSINESS 15
Are you in any of these industries or pay contractors to provide any of these services? • building • construction • cleaning services • courier services • road freight, information technology, security, surveillance and investigation services UNCLASSIFIED – PROTECTING HONEST BUSINESS 16
Are you in any of these industries or pay contractors to provide any of these services? Taxable Payments Reporting System (TPRS) Requires businesses in relevant industries to report the payments they make to contractors using the Taxable payments annual report (TPAR). • building and construction You need to lodge your TPAR by 28 August every year. • cleaning and courier services Your first TPAR is due by 28 August 2019. • road freight, IT, security, surveillance and investigation services Your first TPAR is due by 28 August 2020. • you don’t need to include payments you make to employees in your TPAR ato.gov.au/TPAR UNCLASSIFIED – PROTECTING HONEST BUSINESS 17
Correct a mistake • forgot to include some income? • claimed deductions you weren’t entitled to? • didn’t account for stock used for personal purposes? You can easily fix a mistake yourself, or ask your tax professional for help. ato.gov.au/voluntarydisclosure ato.gov.au/stockforpersonaluse UNCLASSIFIED – PROTECTING HONEST BUSINESS 18
Make a tip-off • everyone needs to pay their correct amount of tax • report online • confidential • give us as much detail as you can • Black Economy hotline: 1800 060 062 ato.gov.au/tipoff UNCLASSIFIED – PROTECTING HONEST BUSINESS 19
Support for small business Afterhours Going online call back service Small business newsroom Small Business Assist ato.gov.au & atoTV Small business Small business ATO App superannuation workshops clearing house ato.gov.au/SBsupport UNCLASSIFIED – PROTECTING HONEST BUSINESS 20
Workshops in your area Workshops and webinars • Insert: date - Topic • Insert: date - Topic • Insert: date - Topic Tax clinic (delete if there are no clinics within the area or nearby) • insert ato.gov.au/SBsupport UNCLASSIFIED – PROTECTING HONEST BUSINESS 21
For further advice, contact a registered tax professional www.tpb.gov.au UNCLASSIFIED – PROTECTING HONEST BUSINESS
Questions or comments? UNCLASSIFIED – PROTECTING HONEST BUSINESS 23
Keep up to date Sign up for news ato.gov.au/sbnews Facebook facebook.com/ato.gov.au Twitter twitter.com/ato_gov_au LinkedIn linkedin.com/company/7165 atoTV tv.ato.gov.au 24
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