WSC NEWS - JULY 2010
Key Dates
28 July 2010
Super guarantee contributions for quarter 4, 2009–2010. Employers must make contributions to the fund by this date. Employers who do not pay minimum super contributions for quarter 4 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement – quarterly with us by 28 August 2010. Note: Remember, the super guarantee charge is not tax deductible.
Quarterly instalment notice, quarter 4, 2009-2010. Due date for paying – you only need to lodge if you are varying the instalment amount.
11 August 2010
Quarterly activity statement, quarter 4, 2009- 2010. Due date for lodging and paying if you are lodging in paper or via our electronic commerce interface (ECI).
21 August 2010
July 2010 monthly activity statement – due date for lodging and paying
25 August 2010
Quarterly activity statement, quarter 4, 2009-2010. Due date for lodging and paying if you are lodging via our electronic lodgement service (ELS) or Tax Agent lodging via the Tax Agent Portal.
28 August 2010
Due date for lodging the Superannuation Guarantee Charge Statement – quarterly and paying the super guarantee charge for quarter 4, 2009-2010. If the employer did not pay enough contributions on time.
30 September 2010
Due date for lodging PAYG Withholding Payment Summary Annual Report for payers whose agent (BAS agent or tax agent) helped prepare the report. If a payer has only closely held payees (eg. directors and/or spouse) and their agent helps prepare their report, they may be eligible for a concession to lodge this report by the due date of their income tax return.
Benchmarking and the Cash Economy
In recent years, the cash economy has become one of the ATO’s largest compliance risk areas and generally involves businesses either under-reporting or not reporting cash income or cash surrogates (e.g., through barter activities), or not reporting (or under reporting) transactions which are subject to GST.
In the 2009-2010 Compliance Program, the Commissioner has clearly indicated that the cash economy will rank very high on the ATO’s list of audit priorities for the 2010 income year.
One of the most significant developments in the ATO’s approach (or strategies) to tackling the cash economy is the development of small business benchmarks for different industries/trades.
More specifically, the ATO in collaboration with a number of trade associations, tradespeople and tax practitioners, have developed a range of ‘benchmarks’ or ‘industry norms’ that will enable trades and other businesses operating in cash industries to assess their own tax risk.
The small business benchmarks can be accessed by industry, from the ATO website at: http//www.ato.gov.au/businesses/pathway.asp?pc=001/003/102
The ATO acknowledge that there may be valid reasons for a business performing outside the relevant benchmarks (e.g., the taxpayer may be inefficient and/or undercharging). In these cases, the ATO auditors will have regard to the taxpayer’s circumstances.
However, the ATO has also indicated that consistent, long-term performance outside a benchmark may be a sign of non-compliance and, therefore, will lead to further action.
The following example has been adapted from a ‘live’ case to illustrate the ATO’s use of the benchmarks during audit process.
Sam is a concreter and was selected for audit by the ATO because of very low levels of income he has been reporting over a number of years. The concreting benchmarks were used by the ATO to assess Sam’s business relative to the industry.
During the audit, Sam said his business was based on smaller suburban work, for which he received very little cash. He said he always issued tax invoices to his customers.
Sam had declared taxable income of $18,000 for the income year in review. He recorded only four concrete purchases during one of the quarters. However, third party data acquired from Sam’s supplier showed 18 purchases for that quarter, some of which he paid for in cash. Further examination showed many of Sam’s jobs were for cash and were not recorded in his records and that his customers did not receive tax invoices.
Based on the information gathered from all sources, the auditors formed the view that there was significant unreported cash income and expenses. As Sam’s records were inadequate, they estimated Sam’s income by applying his normal sale price per square metre to his actual purchases of concrete. The audit revealed Sam had omitted $142,000 from his return and this resulted in tax liabilities of about $ 67,000 and additional penalties of nearly $50,000.
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