Most businesses now have had to implement Single Touch Payroll. As a result of this they are now reporting the following information to the ATO each time they pay employees:
- Employee names and tax file numbers;
- Gross wages paid;
- PAYG Tax withheld; and
- Superannuation payable.
In addition, superannuation funds now have to inform the ATO of superannuation contributions made for each of their members in real time.
How does the ATO use this information?
The ATO will now know within a short period of time if your business is failing to pay superannuation or PAYG Tax.
The ATO has recently begun using this information to target businesses that don’t pay superannuation on time and the Deputy Commissioner of Taxation, James O’Halloran announced on 14 October 2019, that:
“Indeed this week, we’ll contact 2,500 employers who we’ve identified as having paid some or all of their SG contributions late during 2018–19. We’ll also be sending due-date reminders to a further 4,000 employers.
It should be noted this is the first direct use of the Single Touch Payroll reporting arrangements, based on what your funds report to us relating to SG payments. It’s a tangible action which demonstrates our increasing ability to effectively follow up in relative real time apparent late or non-payment of SG.”
If the businesses identified by the ATO as having failed to pay Superannuation Guarantee Charge don’t rectify the position then the ATO will issue those businesses with Garnishee Notices and it will issue the directors of companies with Director Penalty Notices. Where a company has failed to report unpaid superannuation within the set timeframes by lodging a Superannuation Guarantee Charge Statement (which is still a requirement, notwithstanding Single Touch Payroll) the Director Penalty Notices issued will be Lockdown Director Penalty Notices.
What can you do to avoid the risks?
If your company can’t pay superannuation when due, this is often a warning sign that your business may have financial problems. This doesn’t mean you have to place your company in liquidation but you should look at getting advice about the risks associated with your position and what you can do to turn your business around.
Contact us for Assistance
If you or your business are having difficulties paying superannuation to your employees, or your tax debts, the professionals at TAX DEBT SOLVED can help advise you of the options available with a free, no-obligation consultation, so contact us here.