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October 2019
Issue 0006

October already?!?!?

We are officially into Quarter 2 for the 2019/2020 financial year with many changes that came into place in July. There has been more changes in regards to 'penalty rates' as of today the 1st of October. Further detailed information can be found in this months newsletter outlining increases and businesses that will be affected by these changes.

Do you lodge your BAS / IAS quarterly? If so now is the time to gather up all of your receipts, documents and bank statements ready for us to work our magic and lodge your BAS/IAS for you.

In last months newsletter we looked at 'failure to lodge' (FTL) penalties for Single Touch Payroll. This month we are going to continue to look at FTL penalties, but these penalties relate to people and business's that do not meet their lodgement obligations on time when it comes to returns, reports and statements.

We also look at TPAR (Taxable Payments Annual Reports) extending to new Industries including; road freight services, information technology services and security, surveillance and investigation services. If your business falls under this industry and you need some assistance in understanding what this means for you then please do not hesitate to give myself or my staff a call to set up a time and run through your obligations.

If there is any information you would like to see included in future newsletters, please feel free to contact us with your ideas or suggestions.

Thank you
Bec

Penalty rates changes

Over the past few years, penalty rates in the Restaurant, Hospitality, Pharmacy, Fast Food and Retail awards have been gradually changing. From 1 November 2018, penalty rates were increased for casual employees covered by the General Retail Industry Award 2010 (Award). In order to soften the impact for employers, the increase in November last year was just one step in a phased increase to the full penalty rate increase.

From 1 July 2019, penalty rates in the following awards changed again:

Hospitality Award
Pharmacy Award
Fast Food Award
Retail Award.

On 1 October 2019, some penalty rates for casuals in the Retail Award have increased again. Penalty rates for casual employees will increase as follows:

Saturday work

Commencement date	Saturday casual penalty	Total addition to base rate (Saturday penalty + 25% casual loading)
1 October 2019	20%	45%
1 March 2020	25%	50%

Evening work (Monday to Friday hours after 6pm)

Commencement date	Evening work casual penalty (Monday to Friday)	Total addition to base rate (evening penalty + 25% casual loading)
1 October 2019	10%	35%
1 March 2020	15%	40%
1 October 2020	20%	45%
1 March 2021	25%	50%

The Saturday penalty increase applies to all hours worked on a Saturday, whilst the evening penalty applies only to hours worked after 6pm.

These changes apply to casual employees only. Saturday and evening penalty rates for permanent employees (full time and part time) remain unchanged.

Alongside the penalty increases for casual retail employees, the FWC introduced a gradual reduction to the Sunday penalty rates for shift workers (from 195% -175% for permanent shift workers and from 220% to 200% for casual shift workers). The first two stages in this reduction took effect in November 2018 and July 2019, and will be further reduced in the final stage to 200% as of 1 July 2020. In addition, Sunday penalty rates for non-shift workers continue to be reduced annually in July each year, with the final reduction taking effect from 1 July 2020.

What should you do?

From the first full pay period on or after 1 October 2019, employers operating in the retail industry must ensure they are paying all Award-covered casual staff the correct Saturday and evening penalty rates, particularly bearing in mind the coming Christmas retailing season.

Employers should:

Carefully review their wage arrangements and plan to implement the necessary penalty increases (or decrease, in the case of shift workers) from the first full pay period on or after 1 October 2019;
Diarise to review the rates again next year prior to the next phase of the transitional arrangements taking effect in March 2020; and
In the case of employers already paying above-award rates to casual staff, review these arrangements to ensure the payments remain high enough to accommodate the penalty increases.

Converting your Business from Stressful to Successful

Starting a new business can be stressful that’s for sure, because it’s not just about starting up a business is it? It’s about setting up your business for success. But how do you convert all the stresses of starting a new business to setting it up successfully? Here is what you should be doing to speed up the process.

Have a plan and get organised
Never undermine the power of organisation. There is nothing worse than not having a thought out plan on how you are going to reach your business goals. Figure out what steps you need to take to get there. To do this in the most efficient way, create a to-do list of tasks you need to complete each day. Organise your documents and folders into sections so you can find them easily for future reference.

Keep detailed records and reports
If you want to be successful, you have got to learn to be a stickler for detail. By having a detailed record, you will be able to create your report with ease. Having annual or biannual reports always comes in handy when you need to identify where your business stands financially and what potential challenges you may be facing. Having all of this data ready to be assessed gives you time to create an effective strategy to overcome the challenges.

Research your competition
You don’t want to be one of those businesses where your field of business is in close proximity to a competitors. It’d be like having a Macca’s chain a few meters away from Hungry Jacks! So to avoid a scenario like that, don’t be afraid to conduct extensive research about your competitors. Uncover their competitive advantage to figure out what you can do to fill that gap in your business. Having competition is always a good way to keep yourself on top of your game.

Be creative but stay professional
Nothing leads a company to a dead-end more than repetitive content. You don’t want to get lost in the crowd, you want your business to stand out. Think outside the box. What can you do with your business to distinguish it from the rest? What idea or approach could you implement to your business?
Remember though, you want your business to stand out in a positive light. While it is always good to incorporate new ideas, it is important to know where to draw the line on your crazy ideas. It is crucial to maintain a good balance between creative and professional. Many businesses dwell so much on making their brand stand out that they forget to provide exceptional service. Investing time in your clients and providing professional service will lead to customer loyalty.

Have your finances accurate and up-to-date
Not the best with numbers? Or just do not have the time to do dealing with the endless flow of receipts and invoices? Now is the time you should be looking into Bookkeepers and Accountants to help you manage the finances of your business. There is no way you can ever regret having someone just to handle your finances because your business finances and accounts can either make or break your business. It is best to let an expert handle this area of business so you don’t find yourself in an accounting mess at the end of financial year.

Hire trustworthy employees
Take it from personal experience, not taking the time to hire an exceptional employee will stunt the growth of your business. Businesses hire employees to reduce the stress of your workload and so you can concentrate on the more important aspects of the business. Imagine working with an employee whose performance rate is below average and is never motivated. Or worse, imagine hiring an employee and finding your things going missing! Not having a trustworthy employee can use up a lot of your time and distract you from the goals of your business, slowing down your success.

Failure to lodge on time penalties

Failure to lodge (FTL) on time penalty may be applied if you're required to lodge a return, report and/or statement with the ATO by a particular day, but don't.

They recognise that sometimes people don't meet their lodgment obligations on time, even with the best intentions. Generally they don't apply penalties in isolated cases of late lodgment.

The ATO will warn you by phone or in writing if you've failed to lodge. If they do apply FTL penalty they will send you a penalty notice stating the amount and due date of the penalty.

Calculating FTL penalty

For a small entity, FTL penalty is calculated at the rate of one penalty unit (refer to table below) for each period of 28 days (or part thereof) that the return or statement is overdue, up to a maximum of five penalty units.

For a medium entity the penalty is multiplied by two. A 'medium entity' is a medium withholder for PAYG withholding purposes, or has assessable income or current GST turnover of more than $1 million and less than $20 million.

For a large entity the penalty is multiplied by five. A 'large entity' is a large withholder for PAYG withholding purposes, or has assessable income or current GST turnover of $20 million or more.

For a significant global entity the base penalty amount is multiplied by five hundred. FTL penalties for significant global entities apply to an entity that fails to lodge an approved form required to be given at a date that is on or after 1 July 2017.

Table: Penalty unit
When infringement occurred	Penalty unit amount
Up to 27 December 2012	$110
28 December 2012 – 30 July 2015	$170
31 July 2015 – 30 June 2017	$180
On or after 1 July 2017	$210

How FTL penalties are applied

An automated penalty system applies FTL penalty to late-lodged returns, reports and/or statements, including:

activity statements
tax returns
FBT returns
PAYG withholding annual reports
Single Touch Payroll reports
annual GST returns and information reports
taxable payment annual reports.

The ATO may apply FTL penalty manually. This is usually in situations of escalating non-compliance – for example, where a taxpayer has not lodged after a request to do so.

As a rule, a penalty will not be applied to a late-lodged tax return, FBT return, annual GST return or activity statement if the lodgment results in either a refund or a nil result, unless:

FTL penalty was applied before the return or statement was lodged (that is, the penalty will not be remitted even if the subsequent lodgment results in a refund or nil result)
the un-lodged item is a third-party data report, such as a taxable payments annual report.

TPAR Extends to new Industries

From 1 July 2019, the taxable payment reporting system (TPRS) applies to businesses providing the following services and who pay contractors to provide these services on their behalf:

road freight services
information technology (IT) services
security, surveillance and investigation services.

If your business provides any of these services even if it’s only part of the services you provide, you will need to check whether you need to lodge a Taxable payments annual report (TPAR).

Contractors can include subcontractors, consultants and independent contractors.

Your first TPAR will be due on 28 August 2020 for payments made to contractors in the 2019–20 financial year for providing those services on your behalf. This means you need to start keeping records of the contractor payments you make from 1 July 2019.

Businesses that provide a range of services – known as ‘mixed services’– may also need to report if payments they receive from road freight, IT or security, surveillance and investigation services make up 10% or more of their total GST turnover.

How we use TPAR data

We use data provided in the TPAR to identify contractors who may not be doing the right thing with their tax, for example:

not reporting income
failing to lodge tax returns or activity statements
not registering for GST
using a false Australian business number (ABN).

The TPRS prevented $2.7 billion from being lost to the black economy in the building and construction industry in 2015–16. By bringing this black economy money back into the tax system, we will return it to the public purse for all Australians to benefit from.

$30,000 Instant asset write-off

Looking to expand or improve your business and thinking of buying new or second hand assets?

Don't forget, businesses with a turnover up to $50 million are now eligible for the instant asset write-off. This applies to assets that cost up to $30,000 and were purchased and first used or installed ready for use from 7.30pm (AEDT) on 2 April 2019 to 30 June 2020.

Businesses may purchase and claim a deduction for each asset that cost less than the $30,000 threshold. For example, in the same financial year a business may purchase a new van worth $22,000 and then purchase new equipment at a cost of $14,000. The business can claim both of these as each of the assets are under the $30,000 threshold.

For assets over $30,000 the general depreciation rules apply.

ATO LODGEMENT DATES

These dates are from the ATO website and do not take into account possible extensions.
You remain responsible for ensuring that the necessary information is with us on time.

BAS/IAS Monthly Lodgement –September Activity Statement: 21^st October 2019 final date for lodgement and payment.

BAS/IAS Monthly Lodgement –October Activity Statement: 21^st November 2019 final date for lodgement and payment.

BAS/IAS Monthly Lodgement –November Activity Statement: 21^st December 2019 final date for lodgement and payment.

1st Quarter of FY 2020: BAS Lodgement – July/September Quarter 2020 (including PAYGI) 29^th October 2019 final date for lodgement & payment

2nd Quarter of FY 2020: BAS Lodgement – October/December Quarter 2020 (including PAYGI) 28^th January 2020 final date for lodgement & payment

3rd Quarter of FY 2020: BAS Lodgement – January/March Quarter 2020 (including PAYGI) 28^th April 2020 final date for lodgement & payment

When a due date falls on a Saturday, Sunday or Public Holiday, you can lodge or pay on the next business day.

Due date for super guarantee contributions, for quarterly payments;

2nd Quarter of FY 2019, October to December 2019 - contributions must be in the fund by 28^th January 2020.

3rd Quarter of FY 2020, January to March 2020 - contributions must be in the fund by 28^th April 2020.

Monthly super payments are to be made by either the 21^st or 28^th of the following month dependant on your super fund.
Refer to the ATO for details regarding any SGC charges applicable if not paid by due date.

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