Articles

Tax Audit

Payroll tax crackdown

The number of companies being audited over payroll tax compliance has dramatically increased and most companies audited have been found to have increased payroll tax liability.

The New South Wales (NSW) figures speak for themselves. NSW Payroll liability doubled from $139 million in 2012 to $260m in 2016. 95% of businesses that were audited had an additional payroll tax liability.

Some common mistakes:

  • Failure to adjust threshold for proportion of business that is conducted in NSW.
  • Failure to pay payroll tax as a group structure but as several individual entity’s claiming multiple thresholds.
  • Failing to register when total liable wages exceed the NSW threshold that applies.
  • Excluding superannuation contributions or value of options or shares granted from applicable wages.

What happens if I discover I have unpaid or unregistered Payroll Liability?

  • Interest and penalty taxes may apply.
  • Interest rate is particularly high with a premium over the market rate. The currently interest rate is 9.73% p.a. calculated daily.
  • Penalty tax can range between zero to 90% of unpaid payroll tax liability.

What can we do?

We can help you correctly identify the legal liability under the Act and negotiate the legal challenges such as voluntary disclosure, investigation cooperation, interest rate remission applications and ensure proper articulation of intention upon which the penalty tax applicable will depend. The OSR takes a lenient view on those that disclose before or during an investigation. We can help ensure you have the optimal outcome.

If you have been contacted by the NSW Office of State Revenue Compliance team, pick up the phone and call us for immediate help. If you have become aware of payroll compliance failure and have not yet been contacted by the OSR, you can maximise the reduction in penalty tax and interest by letting us walk you through the reporting framework.

 

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Recognition

Law Council of Australia - Tax Lawyer Sydney Melbourne
law society of new south wales - Tax Lawyer Sydney Melbourne
the tax institute - Tax Lawyer Sydney Melbourne
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