PAYG Reporting Changes

[Paul@PFI]

I have often speculated that the Govt will one day realise that it can accelerate access to employee taxes (and take that cashflow benefit from employers !!) if it could integrate payroll in a way similar to PAYE withholding in NZ. In NZ the employers report each fortnight and pay the tax fortnightly. Here is monthly or quarterly.

Well look what the libs are now announcing on the sly during the Xmas shutdown.... http://jaf.ministers.treasury.gov.au/media-release/001-2014/

Deceitful ?? I haven't seen this in the media.

This sort of announcement used to be a budget announcement. Its a disguised cash grab that will not make small business lives any easier. If anything the small businesses will lose access to cashflow. I bet money on it.

Proposal is to call it an integrated approach. Nice way of describing immediate. This gives the ATO real time super AND tax info. Its only a matter of time before they will make employers pay taxes monthly or earlier.
- Payroll software will have to be updated
- Linked with super reporting is a certainty
- Data used and shared by state govts for payroll tax and workers comp. In NZ if the wages aren't formally paid through withholding the employee is uninsured !!
- Profiling employers who do things differently - ie bonuses, fringe benefits etc

Single Touch Payroll...More like being felt-up than a single touch.

 

[Rob G.]

Large PAYG withholders may have to remit within a week of the pay run !

 

[datto]

I was just going to say that I thought there already are fortnightly remitters.

I've said it before. The govt should find a way to reduce the black economy. One way is to have more tax inspectors out in the real world. Looking and checking. But this govt is reducing the size of the public service.

 

[D.T.]

Thereby increasing national productivity datto?

 

[datto]

Thereby increasing national productivity datto?

I realise it may not be popular idea but it will bring the $ in to the govt. Cops on the beat deter crime but it is expensive, sure.

 

[Rolf Latham]

Global Economy, the much liked NBN, combined with increased vigilance of tax and red tape compliance on micro to small businesses will only result in more work going offshore.

Im guessing we havent thought this one and similar plans through all that well.

You can milk a well fed and healthy cow many days.

You can skin it once.............


ta
rolf

 

[jrc]

The PAYG is part of the employees salary, as such the employer should have it available to pay or if the employer doesn't then they shouldn't be employing that person.

 

[Rolf Latham]

The PAYG is part of the employees salary, as such the employer should have it available to pay or if the employer doesn't then they shouldn't be employing that person.

No doubt, there is no argument there, nor here.

The discussion here is about businesses where there credit control and cashflow is quite tight, and integrating a bring forward payment process will hurt.

A business may have a great P&L, but may actually be insolvent.

Many peops dont analyse the cashflow of a business they buy where the P&L looks nice only to find there isnt enough cashflow coming in to cover the immediate outgoings.

Came across a nice state based tax the other day called pay roll tax............. another nice disincentive to employ peops.

ta
rolf

 

[Hoffy]

Sensible initiative from the government. I think most people not involved with accounting would be surprised to learn that their employer gets to hang on to their tax for a little while before sending on to the ATO.

 

[Paul@PFI]

Large PAYG withholders may have to remit within a week of the pay run !

Yes - The large remitters wont use this system however. Their ERP (SAP{/ Pronto etc etc) software will need to use the XBR process that this new software seeks to use. The proposed new software just seeks to bring small business in line with large remitters I fear. Maybe never weekly but within the month seem sure.

 

[Paul@PFI]

No doubt, there is no argument there, nor here.

The discussion here is about businesses where there credit control and cashflow is quite tight, and integrating a bring forward payment process will hurt.

A business may have a great P&L, but may actually be insolvent.

Many peops dont analyse the cashflow of a business they buy where the P&L looks nice only to find there isnt enough cashflow coming in to cover the immediate outgoings.

Came across a nice state based tax the other day called pay roll tax............. another nice disincentive to employ peops.

ta
rolf

Yes Rolf. For most small businesses the costs of staffing is their largest outgoing (after inventory if they have it).

If they will bring fwd payroll withholding I can guarantee that the quarterly GST remittance wont last long. The standard in NZ is a two month period. I would expect that change isn't far off.

If the Govt can find a way to reduce red tape that cripples business they seem to be looking for it.

 

[redwing]

The govt should find a way to reduce the black economy. One way is to have more tax inspectors out in the real world. Looking and checking.

Wouldn't take much nowadays, it seems more overt than covert

 

[Tony3008]

Sounds much like the changes introduced in the UK in 2013. Before or when you pay employees, you notify the tax people of the amounts involved.
http://www.informdirect.co.uk/business-finance/simple-guide-rti-reporting-paye-real-time/

 

[D.T.]

Wouldn't take much nowadays, it seems more overt than covert

What if there was a cashless economy, ie everything electronic

 

[datto]

What if there was a cashless economy, ie everything electronic

That would help immensely. People would then barter to get around tax.

 

[Paul@PFI]

That would help immensely. People would then barter to get around tax.

Yes tradies already use a barter system. Its is called cash. It comes with a problem for the tradies. He cant spend it on legit items.

 

[Rolf Latham]

Yes tradies already use a barter system. Its is called cash. It comes with a problem for the tradies. He cant spend it on legit items.

I'd like to add some tradies, rather than a generalist term .

Ta

Rolf

 

[datto]

using cash is not barter

 

[perthguy]

Yes tradies already use a barter system. Its is called cash. It comes with a problem for the tradies. He cant spend it on legit items.

I thought the barter system for tradies was beer. I call it the 'carton economy'. I had something done for a carton while doing my last reno. Pity the beer wasn't tax deductible

The requisite payment is relative to the size of the favour. Cartons for small jobs and slabs for big jobs.

 

[Marty McDonald]

This will make life even harder for micro businesses who have fluctuating cash flows but fixed costs.

What about one or two person businesses who don't use an accounting system ie excel! Seen plenty of personal service / contract type businesses like that.