From 1 July 2019, businesses can only claim deductions for payments made to workers where they’ve met the pay as you go (PAYG) withholding obligation for that payment. Read on for changes to deductions for non-compliant payments.
Where the PAYG withholding rules require an amount to be withheld, businesses must:
• withhold the amount from the payment before they pay their worker; and
• report that amount to the ATO.
Businesses won’t lose their deduction if they withhold:
• an incorrect amount by mistake – to minimise any penalties the team at DGL can correct the entity’s mistake by lodging a voluntary disclosure in the approved form.
• the correct amount but make a mistake when reporting
Businesses will only lose their deduction if there is a withholding or reporting requirement and no amount is withheld or reported to the ATO, unless they make a voluntary disclosure in the approved form before the ATO has begun an examination of their affairs.
Should you require additional information in regards to deductions and non-compliant payments, please contact DGL Accountants.
We are here to help you and your business grow and keep you up to date with your taxation obligations.