4th Quarter 2013

On 29 June 2012, changes were made to the tax and superannuation laws to reduce the scope for companies to engage in fraudulent phoenix activity or to escape liabilities and payments of employee entitlements.

The ATO was given new powers that provide greater protection for certain employee entitlements. Company directors, especially those suspected to be engaged in fraudulent phoenix activity, now have an increased level of personal liability for unpaid and unreported superannuation guarantee and PAYG withholding. These amendments help protect workers' entitlements and strengthen directors' obligations.

By introducing further disincentives for companies to avoid their tax law and employee obligations, these changes are intended to deter directors from engaging in fraudulent phoenix activities and to improve the regulatory environment for businesses that comply with the tax and super laws.

ATO phoenix audits often lead to detection of other offences, both civil and criminal. This includes false and misleading statements made on tax returns or business activity statements, and defrauding of the revenue system.

The changes protect workers' entitlements and strengthen directors' obligations by:

• extending the director penalty regime and the estimates regime to apply to unpaid super guarantee charge;
• ensuring that directors cannot discharge their director penalties by placing their company into administration or liquidation when pay as you go withholding (PAYG withholding) or super guarantee charge remains unpaid and unreported three months after the due date (known as 'lockdown' director penalties); and
• in some instances, making directors and their associates liable to PAYG withholding non-compliance tax (NCT), a tax equivalent to reducing PAYG credit entitlements where the company has failed to pay amounts withheld to the Commissioner.

Recently, the ATO obtained data from the Department of Education, Employment and Workplace Relations (DEEWR) about the General Employee Entitlement and Redundancy Scheme. This data the ATO is using to assist in the identification of fraudulent phoenix operators.

Good record keeping can help you manage your cash flow, make better business decisions and help you avoid refund delays with the ATO. Keeping accurate and up-to-date records is vital to the success of any business and is one of the most important management tools it possesses. Many business owners invest a lot of time and effort into the running of their business and fail to realise the importance of maintaining good record keeping.

An important part of good record keeping is having a system that works for you. Your record keeping system should be most importantly accurate, reliable, easy to follow, consistent and very simple to use. The most important reason for keeping good records is that it’s a legal requirement.

By law, you must keep business records for five years after they are prepared, obtained or the transactions completed, whichever occurs latest. The records must be in English or in a form that the ATO can access and understand, in order to work out the amount of tax you are liable to pay. Some records you may have to keep for longer if you use information from those records in a later tax return – for example, if you claim a loss carried forward from a business activity in an earlier year. Under these circumstances, you must keep the records until the end of any period of review for that later return.

Other reasons for keeping good business records are:

• Assists in the preparation of your financial statements quickly and accurately as well as business activity statements (if registered for GST).
• Assists you in calculating how much tax you have to pay.
• Contributes promptly to assessing the financial situation of the business and monitors the health of your business at any time.
• Provides information to enable the control of cash in the business so you can pay your tax and other obligations when they fall due.
• Provides management information to base business decisions on and improves the success of your business.
• Measures the business performance against the projections that were originally set down in the business plan.
• Highlights quickly areas where problems could arise and enable remedies to be put in place.
• Keeps a good track of the costs of staff and their performance.
• Helps in detecting theft within the business itself and assist in loss prevention.
• Assists in providing financial information required by the bank and other lenders.
• Provides valuable information and details for the future sale of your business where that is required to prospective buyers.
• Saves a lot of time and effort and makes best use of your accountant.

28 APRIL 2013

• March 2013 monthly activity statement - due date for lodgement and payment.

28 APRIL 2013

• Super guarantee contributions for Quarter 3 (January – March 2013) are to be made to the fund by this date. Employers who do not pay minimum super contributions for Quarter 3 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement - quarterly (NAT 9599) with the ATO by 28 May 2013. Remember, the super guarantee charge is not tax deductible.

• Quarterly instalment notice (Form R, S or T), Quarter 3 (January – March 2013) due date for payment. You only need to lodge if you are varying the instalment amount.

15 MAY 2013

• Income tax returns for the 2012 financial year for all other entities that did not have to lodge earlier and are not eligible for the 5 June 2013 concession. Due date for lodging, company and super funds to pay where required, individuals and trusts in this category to pay as per their notice of assessment.

21 MAY 2013

• April 2013 monthly activity statement - due date for lodgement and payment.

26 MAY 2013

• Quarter 3 activity statements (January - March 2013) - due date for lodgement and payment (all electronic lodgement methods).

• Superannuation guarantee charge (SGC) statement - quarterly and paying the super guarantee charge for Quarter 3 (January - March 2013), if the employer did not pay enough contributions on time.

21 JUNE 2013

• May 2013 monthly activity statement – due date for lodgement and payment.

25 JUNE 2013

• 2013 Fringe benefits tax annual return due date for eligible agents. Payment (if required) is due 28 May.

30 JUNE 2013

• Last day for appointing a registered tax agent for an activity statement role.

• Super guarantee contributions must be paid by this date to qualify for a tax deduction in the 2012 – 2013 financial year.