Archive for category: Business

Women & Leadership Australia have issued the last and final call for all women currently working in the construction sector to express interest in a limited pool of scholarship funding that has to be allocated by the end of 2019.

The fee support opportunity provides women with funding of between $2,000 and $7,000 (per applicant, subject to a set of selection criteria being met) to undertake a range of leadership development programs commencing early next year.

Quite a number of construction women have applied, with many high-calibre candidates being awarded the partial scholarships. Industry stakeholders and creditors want to take this opportunity to thank all partners and associations for their support to date.

To ensure equitable access to the grants, WLA has extended the funding window until December 6.

It is important to note that it is uncertain when the funding window will be available again; more information and initial expressions of interest are available here: www.wla.edu.au/consteng.html

With only two weeks to go until the end of another financial year, there’s no time like the present to get the books in order.

We’ve taken a look at what the ATO wants you to know in the lead up to EOFY…

Instant asset write-off extended and increased

Businesses with a turnover from $10 million to less than $50 million are now eligible for the instant asset write-off. This applies to assets purchased and first used or installed ready for use up to $30,000 each from 7.30pm (AEDT) on 2 April 2019 to 30 June 2020.

Businesses may purchase and claim a deduction for multiple assets each under the $30,000 threshold… e.g. you may purchase a new van worth $22,000 and then purchase new equipment at a cost of $14,000, in the same financial year, and claim both of these as each of the assets are under the $30,000 threshold.

For assets over $30,000 the general depreciation rules apply.

Small businesses (turnover up to $10 million) are also eligible for the instant asset write off of $30,000 for assets purchased from 7.30pm (AEDT) 2 April 2019 to 30 June 2020. For purchases prior to this date different thresholds apply for small businesses.

Single Touch Payroll – don’t forget changes

As we’ve reported previously, if you are reporting through Single Touch Payroll (STP) your end of financial year process has changed.

These changes mean you are no longer required to provide a payment summary to your employees or lodge a payment summary annual report for any information that has already been reported and finalised through STP.

If you won’t be providing a payment summary to your employees this year, remember to let them know. Your employees will be able to see their information reported through STP in their ATO online account via myGov. This information will now be referred to as an income statement. If your employees don’t have a myGov account, they can create on and link it to the ATO.

If you started reporting through STP during the 2018–19 financial year, you will have until 31 July 2019 to make the finalisation declaration within your software solution.

FBT – get it right

If you’re an employer, the ATO is warning they’re looking out for FBT mistakes… In this year’s updated list of ‘What attracts our attention’, there are six items that specifically relate to fringe benefits tax (FBT). To stay off the radar, make sure you’re on track with:

• failing to report motor vehicle fringe benefits, incorrectly applying exemptions for vehicles or incorrectly claiming reductions for these benefits
• mismatches between the amount reported as an employee contribution on an FBT return compared to the income amounts on an employer’s tax return
• claiming entertainment expenses as a deduction but not correctly reporting them as a fringe benefit, or incorrectly classifying entertainment expenses as sponsorship or advertising
• incorrectly calculating car parking fringe benefits due to:
• significantly discounting market valuations
• using non-commercial parking rates
• not being supported by adequate evidence
• not reporting fringe benefits on business assets that are provided for the personal enjoyment of employees or associates
• not lodging FBT returns (or lodging them late) to delay or avoid payment of tax.

Improving super guarantee compliance

A number of measures have been enacted to protect the super entitlements of employees, focusing on improving employers’ compliance with their Super Guarantee (SG) obligations.

Starting back in April, in summary:

• employers who feel they could benefit from more knowledge in relation to their super obligation will have access to a new, free, online education course (and assessment) that they can complete at a time that suits them.
• employers who are not meeting their SG obligations may be directed to complete the course.
• business owners/directors may be held personally liable for amounts owing through Director Penalty Notices and security deposits.
• The ATO can provide employees with information regarding the non-payment of SG by employers, including what actions we are taking to recover the outstanding amounts.

Getting your tax responsibilities sorted as early as possible can be a big weight off your shoulders AND get you a well-deserved return sooner rather than later. With only a couple of weeks to go, put aside some time and get your files ready so you can start the next financial year on the right foot.

What is the difference between an employee and a contractor, and does it matter? The Australian Tax Office describes an employee as someone who works in your business and is part of your business. A contractor is running their own business. But it’s not as simple as it sounds.

Your tax, super and other obligations will vary depending on whether your workers are employees or contractors and it’s against the law to wrongly treat an employee as a contractor. It’s worth checking because if you don’t get it right, you could be facing heavy penalties.

Some workers are always considered employees, such as apprentices, trainees, labourers and trade assistants. Employees must be people. If you’ve hired a company, trust or partnership to undertake work, that is a contract relationship for tax and super purposes. If you have sourced workers through a labour hire company, and you pay the company for the work, they are responsible for those obligations. If you’ve hired an individual, it’s the details of the working agreement which will determine if they are a contractor or an employee.

There are a few factors when taken together, that determine whether a worker is an employee or contractor for tax and super purposes.

Do they have the ability to subcontract or delegate work? An employee cannot pay someone else to do their work, whereas a contractor has this right.

How are they paid? If the worker is paid for their time worked, or a commission, or a price per item, they are considered an employee. If they are paid to achieve a result based on a quote they provided, they are a contractor.

Who supplies their tools and equipment? If you supply all or most of a worker’s tools, or they supply their own, but you pay a reimbursement, they are an employee. A contractor would supply all their own equipment, and you do not pay them a reimbursement or allowance.

Are you in control of the workplace? Employees are directed by you to work as directed, but contractors have the freedom to determine how any work is done subject to their contract.

Myths about employees vs contractors

Myth: If a worker has an ABN they’re a contractor. FALSE: Having an ABN makes no difference to whether a worker is an employee or contractor for a job. If the working arrangement is employment, an ABN will not make the worker a contractor.

Myth: Employees can’t be used for short jobs or to get extra work done during busy periods. FALSE: The length of a job or regularity of work does not influence whether a worker is an employee or contractor. Both can be used for casual, temporary, on-call and infrequent work busy periods, short jobs, specific tasks and projects.

Myth: My business has always used contractors, so we don’t need to check whether new workers are employees or contractors. FALSE: Unless a working arrangement (including the specific terms and conditions under which the work is done) is identical to a previous arrangement, the outcome could be different.

Myth: If a worker has a registered business name, they’re a contractor. FALSE: Having a registered business name makes no difference to whether a worker is an employee or contractor.

Myth: My business should only take on contractors, so we don’t have to worry about super. FALSE: Businesses may be required to pay super for their contractors. If you pay an individual contractor under a contract that is wholly or principally for the person’s labour, you have to pay super contributions for them.

Myth: If a worker submits an invoice for their work, they’re a contractor. FALSE: To know whether a worker is an employee or contractor, you need to look at the whole working arrangement and examine the specific terms and conditions.

To determine if your workers are employees or contractors, you need to review your whole working arrangements.  The ATO has an online tool to help with this process.

The Decision Tool will help you work out if your worker is an employee or contractor for tax and super purposes.

What will I do next?

Once you determine if your workers are employees, you must:

• withhold tax (PAYG withholding) from their wages and report and pay the withheld amounts to the ATO
• pay super, at least quarterly, for eligible employees
• report and pay fringe benefits tax (FBT) if you provide your employee with fringe benefits.

If your workers are contractors instead:

• you won’t have to withhold from payments to them, although this is not the case if they don’t quote their ABN to you, or you have a voluntary agreement with them to withhold tax from their payments
• you may still have to pay super for individual contractors if the contract is principally for their labour
• you don’t have FBT obligations.

It should be noted that under work health and safety laws, businesses have different obligations when it comes to the definition of a worker. A worker is a person who carries out work in any capacity for a business or employer or ‘person conducting a business undertaking’ (PCBU) They can be an employee, a trainee, apprentice or work experience student, a volunteer, an outworker, a contractor or sub-contractor, an employee of a contractor or sub-contractor, an employee of a labour hire company.

While at work, all workers must take reasonable care for their own health and safety, as well as others and must comply with any reasonable instructions, policies and procedure given by their employer, business or controller of the workplace. This includes contractors, regardless of any other contractual agreements with a business.

For more information, visit the ATO at ato.gov.au and the work health and safety regulator in your state or territory.