Crackdown on Super

The ATO is cracking down on employers who fail to make the required superannuation contributions for their employees. The Tax Office has begun auditing around 22,000 businesses - mostly small - to ascertain whether they are making the correct, timely SGC contributions. The ATO can issue a default assessment if the auditor decides that insufficient superannuation contributions have been made for any employees.

If this happens, the employer is not able to include the additional SGC contributions as a tax deduction. The ATO will calculate the shortfall, and a nominal interest and administration charge is applied to all SGC assessments with an extra "failure to notify" penalty being added where the assessment arises from the ATO audit rather than a voluntary disclosure.

As an employer you are required to make superannuation guarantee contributions on behalf of your eligible employees at least once each quarter. Contributions are due by: 28 October, 28 January, 28 April and 28 July each year.

You now need to:

• Calculate 9% of the earnings base for each eligible employee (generally employees who are paid $450 or more per month).
• Pay this to a complying superannuation fund at least quarterly.
• Report in writing to your employees the details of the contributions you have made to their funds at least once every quarter on a pay slip, letter or email. You should note amount contributed, name of fund and, if known, the employee's account number.
• Keep a record of when, what and how you reported superannuation contributions to your employees.

If you don't make your superannuation contributions by the cut off dates you will face penalties. You may also face penalties if you don't report details to your employees.

Carrying on a Business From Home

The Tax Office has recently released a guide for taxpayers who carry on a business from their home. The guide discusses the taxpayer's obligations and other issues that need to be considered when operating a business from home. Some of these issues include:

• The implications of operating a hobby business as opposed to a business (for profit);
• Choosing the right structure to operate within; and
• Registration obligations of the taxpayer.

The full guide is available on the ATO's website at: www.ato.gov.au/print.asp?doc=/content/43191.htm

Accounting support services

Thompsons Australia has expanded its business to now include a separate bookkeeping service - Beancounter Australia.  Beancounter Australia ,operating in both Darwin and Sydney, has many great services and features available - these include:

• Bookkeeping services - on your site or in our offices
• Business Set-up and Bookkeeping consulting
• Payroll, BAS, GST
• QuickBooks Training

Please phone Beancounter Australia on 61 2 9579 3900 for more information or visit our website at http://www.beancounter123.com.au

Update on Superannuation Changes

The government has announced further changes to superannuation, since the budget announcement in May.  To help ensure that transition to the new system is easier, the government has allowed for the following:

• Individuals will be allowed up to $1million of post-tax undeducted contributions between 10 May 2006 and 30 June 2007
• Individuals under the age of 65 will be entitled to bring forward 2 years of contributions R11; enabling individuals to contribute $450,000 in one year
• In addition to the annual cap of $150,000 (applicable from 1 July 2007), individuals will be able to contribute a lifetime limit of $1million from the sale of small business assets held for 15 years and settlements for injuries resulting from permanent disablement.

Should you need any help or advice on how these changes will affect you then please call us on 61 2 9579 3600 and we can help you develop a plan to leverage these changes.