You may not be affected by either of these (yet), but it pays to be aware of obligations.   This is a reminder of two ATO matters coming up; lodging payroll data electronically to the ATO, and fringe benefits tax.   If you claim an expense covered by FBT (eg., cars, parking, entertainment) tax may be payable on the value of the benefit.   It is quite simple to determine, but returns can be complicated.

Single Touch Payroll (STP)

From 1 July 2018 employers with 20 or more staff (inclusive of casuals – it's determined by headcount) are required to attend to payroll functions electronically.   All pay information has to be sent electronically to the ATO each pay run.   This direct connection to the ATO means all payroll systems need to be upgraded.

As the ATO then has all employment information, employers benefit because payment summaries and TFN forms will be eliminated.   However, the ATO can also quickly follow up that super is paid, and tax and welfare fraud will be reduced because all employees must have a MyGov account.

If you have less than 15 people on 1 April 2018 you do not have to use STP until 1 July 2019.   But, start thinking about it now.   It is not a straight forward process and quite a bit of preparation is needed.   We have a Payroll Checklist to help you with preparation by 1 July 2018.   (Just call and we'll send you a copy).

Remember also that the number of employees makes you a medium sized business, so you also need to consider other employment issues like compliance with Awards, payroll tax (due monthly), fringe benefits tax (due from 1/4/18), WorkCover, employee or contractors classification, and superannuation.   You may also need to look at upgrading your computer hardware and software.   If you're not certain about any of these matters we'd be happy to help or refer you to reliable suppliers.   Note – even if you're not a bigger business, it may be worth your while to review these issues before there is a need to.

Fringe Benefits Tax (FBT)

Just a reminder that businesses are required to submit FBT returns by 31 May 2018 for the 12 months 1 April 2017 to 31 March 2018.

FBT is not well understood and it is an area of concern for the ATO so it plans to audit more business income tax returns this year, particularly where an employer has not lodged an FBT return.   The major areas of FBT concern are:

- private use of cars (log books required every 5 years)

- private use of commercial vehicles (log book of private use)

- entertainment

- living away from home allowances

- car parking costs

We are currently preparing Questionnaires and Instructions.   The replies determine whether FBT returns are required.   This tax is not one you can ignore nor opt-out of, so a reply will be required.   If there is an ATO audit in the future, the Questionnaire should be sufficient to show that a return was not necessary this year.

What Next?

- If less than 15 employees on 1 April, STP is not required this year (but start planning for next year)

- When our FBT Questionnaire is sent to you, set aside some time to answer the questions (we're hopeful few will have to register, we consider as we do tax returns how to avoid FBT).