The no deductions rule
Moving into the new financial year the ATO are introducing some new rules for businesses. From 1st July 2019, employers who do not meet their PAYG withholding and reporting obligations will not be able to claim deductions for some payments, including;
Salary, wages, commissions, bonuses or allowances paid to an employee
Payments to religious practitioners
Labour hire arrangements
Payments made for services where the supplier does not give an ABN
If you realise your mistake and correct it voluntarily, you may be exempt, however the ATO can still impose penalties for a failure to withhold the correct amount of tax.
New industries required to meet TPAR requirements
As of 1st July 2019 more industries will be required to lodge a TPAR (Taxable Payments Annual Report) to show any payments made to contractors. TPAR gives the ATO information about contractors and consultants that you have worked with throughout the year.
The new industries to be included from this year are;
Road freight transport
Computer system design
Other related service businesses
The first report for these industries, which will collect specific information regarding payments made to contractors, will be due by 28th August 2020.
Existing industries, including the building and construction industry, cleaning, and courier services, will need to lodge their report for this year by 28th August 2019.