Key dates for tax for the new financial year and tax essentials

Here’s to a better financial year 

Let’s hope we can start seeing some silver linings and better times in the coming months. As always, there’s a lot of ATO compliance to deal with. As computer sophistication and the ability to generate data grows, so do the ATO’s reporting requirements. Here’s a guide to key dates for tax for the new financial year, so that you can plan and stay on top of things.

Upcoming ATO key dates for tax

Single touch payroll

Single touch payroll (STP) is now compulsory for all employers. The ATO will most likely start issuing penalties for businesses that don’t report on time.

STP requires you to report a pay event to the ATO on or before the pay day.

If your business is registered for payg withholding tax, then you are considered an employer and will need to report through STP. If this is the case and you have no employees, you should cancel your payg withholding tax registration with the ATO. Please let me know if you want me to do this for your business or check whether you are registered for payg withholding.

If your business employs 1 to 4 employees, you can apply to report quarterly to the ATO. This application needs to be made by a tax or BAS agent.

Note that STP reporting can not be done through the BAS. You must have STP enabled software, even if you are reporting nil wages and payg withholding tax.

If you calculate your wage at year-end, you will still need to report at least quarterly through STP-enabled software.

Free STP software is available at payroller.com.au. Alternatively, Xero have a payroll only solution for 1 to 4 employees for $10 per month. There is also a list of solutions at https://api.gov.au/stpmicrosolutions/

Please contact me if you need assistance with STP.

Taxable payments reports for building and construction industry businesses

If you’re running a business primarily in the building and construction industry, you will need to lodge a Taxable payments annual report (TPAR) if you:

• make payments to contractors for building and construction services, and
• have an Australian business number (ABN).

Payments made to employees are not included in your TPAR.

You need to report these payments to the ATO by 28 August each year. The ATO may issue penalties to businesses that lodge after this date.

Activities and services considered to be building and construction are broad. Some examples include architectural work (including drafting and design), certification, decorating (including painting), engineering, landscaping and construction, project management and surveying. For details, see this list of examples.

For ATO guidance, see this link.

Please contact me if you need assistance with your TPAR.

PAYG summaries and the annual PAYG summary statement

PAYG summaries are due to employees by 14 July and the annual payg summary statement (that summarises all the payg summaries) is due to the ATO by 14 August.

Remember to check that the total wages in the payg summaries match the total wages in your profit and loss statement and the total wages reported to the ATO in BAS’s.

Accounting for JobKeeper correctly

For businesses, ensure you account for any JobKeeper receipts from the ATO as income. Generally an ‘other income’ account is used in the accounts. JobKeeper is not required to be reported in the BAS. The tax code is ‘BAS excluded’.

If you have received JobKeeper as an employee, the amounts will be included in your taxable income.

If you have received JobKeeper payments from your business as an ‘eligible business participant’, the tax treatment of any JobKeeper payments from the business to you will depend on your corporate structure. For a sole trader, trust and partnership, they will be treated as drawings. For a company, they will be treated as director’s fees, dividends or a loan from the company to you. Businesses are not required to pass on JobKeeper to eligible business participants.

Workcover

Please ensure you have workcover in place if required. This can often be overlooked. The major insurers such as Allianz have workcover departments who can assist.

Key dates for tax for the new financial year

As well as the impending dates listed above, below is a list of key dates for the financial year.

JobKeeper

JobKeeper monthly declarations – due by 14^th of the following month.

JobKeeper finishes at the end of September.

BAS due dates

If lodging through a BAS or tax agent, due dates for quarterly lodgements for 2021 are yet to be confirmed on the ATO website but generally are the 25^th of the second month after the end of the quarter, as listed below;

Monthly ATO instalment activity statements (IAS) to report wages and payg withholding tax on wages

For all months other than June, September, December and March, these are due by the 21^st of the following month.

Monthly BAS’s

If you lodge your BAS’s monthy, they are due by the 21^st of the following month, other than the December BAS which is due by 21 February.

2020 tax returns

If you have lodged your 2019 tax return on time, most individuals, companies, trusts, partnerships and self-managed superannuation funds will have a lodgement deadline of 15 May, 2021. However, some may be required to lodge by 31 March, 2021.

If you haven’t lodged your 2019 tax on time, you will most likely be required to lodge your tax return by 31^st October.

Please check with me to confirm your due date.

Superannuation

Superannuation for employees is due by the 28^th of the month after each BAS quarter, as listed below.

If you don’t pay an employee’s super on time, you are liable for the super guarantee charge (SGC), even if you make the payment later. See this link for ATO details and contact me if you have any queries.

Next steps and summary of key dates for tax

There’s a lot to do at the start of the financial year and quite a bit of ATO compliance to plan for. Please use this as a guide for key dates for tax for the new financial year and what you may need to do and contact me if you have any queries or need any assistance.