Tag: audits

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Changes to foreign purchases of established dwellings

Posted on | by Allan Hall

Banning foreign purchases of established dwellings

On 16 February 2025, the Government announced that it will impose a temporary ban on foreign purchases of established dwellings for at least 2 years and crack down on land banking.

From 1 April 2025 to 31 March 2027, foreign persons, including temporary residents and foreign-owned companies, cannot apply to buy an established dwelling in Australia, unless an exception applies. These limited exceptions will include investments that significantly increase housing supply or support the availability of housing supply, and for the Pacific Australia Labour Mobility (PALM) scheme.

Other existing exceptions remain in place, such as for purchases by:

  • permanent residents
  • New Zealand citizens
  • spouses of Australian citizens, permanent residents or New Zealand citizens (when purchased as joint tenants).

A review will be undertaken to determine if the ban should be extended beyond 31 March 2027.

The Tax Office will enforce the ban through enhanced screening of foreign investment proposals relating to residential properties.

It will carry out a full audit of current foreign investment approvals for vacant residential land development.

The Tax Office will also take a tougher stance on compliance of foreign investment approvals for vacant residential land development. This will help ensure that foreign investors who have bought or want to buy vacant residential land meet development conditions.

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Changes for Australian and foreign residents buying and selling property
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What Business Owners need to know about Wage Theft Laws

Posted on | by Allan Hall

New Wage Theft Laws: Criminalisation of Wage Theft

On 1 January 2025, new laws came into effect which criminalises intentional wage underpayments. It is now more critical than ever for businesses to ensure compliance!

Here’s a practical breakdown to help you navigate these changes.

What’s New?

Wage theft has always been illegal, and those caught have always faced hefty fines. However, the government has now introduced more stringent penalties, such as even heftier fines, and for those extremely serious cases, criminal sanctions now apply, such as imprisonment.

What the Law Covers

The new legislation, part of the Closing Loopholes amendments and the Fair Work Act 2009, makes intentional underpayment of wages or entitlements a criminal offense.

This targets employers who knowingly underpay employees, for example:

  • underpaying for hours worked,
  • not compensating for overtime, and
  • withholding entitlements

Penalties for Non-Compliance

The consequences of intentional wage theft include:

  • Corporations: Fines up to $7.825 million or three times the underpayment amount
  • Individuals (Directors/Managers): Fines up to $1.565 million or three times the underpayment amount
  • Severe cases: Up to 10 years imprisonment.

Small Businesses

It is important to note that small businesses (those with fewer than 15 employees) are currently excluded from criminal penalties. However, all businesses should address errors promptly to avoid escalating risks.

Intentional versus Unintentional (‘Honest Mistakes’)

These new laws are targeted at those employers who are caught underpaying their staff in an intentional or deliberate manner. Honest mistakes (such as an accidental payroll error, or misinterpretation of an award entitlement) are exempt from the offence and there will be a clear distinction between genuine errors and intentional wage theft. 

However, businesses should be aware that even unintentional underpayments can lead to increased civil penalties if they remain uncorrected. Repeated mistakes could be interpreted as negligence, resulting in:

  • civil penalties of up to $469,500
  • for serious breaches, Employers may face fines which can escalate to almost $4.7 million, and
  • applicants can now seek a remedy which is three times the amount of the underpayment.

What should Businesses do to address this?

Our team at Allan Hall HR has a wealth of experience in payroll legislation, employment contracts and payroll audits. We can help you to:

  1. Understand Legal Obligations: Business owners should familiarise themselves with relevant employment laws, including minimum wage requirements, overtime pay regulations, and entitlements under fair work instruments such as awards or agreements.
  2. Conduct regular Payroll Audits and Reviews: Conduct regular internal or third-party payroll audits of payroll records and employee contracts to ensure accuracy in wage payments. This can help identify any discrepancies or potential areas of non-compliance. 
  3. Act Quickly on Discrepancies: Resolve underpayment issues immediately to avoid escalations.
  4. Invest in Proper Training: Ensure that staff responsible for payroll and human resources are adequately trained on wage laws and regulations. Provide ongoing education to keep them informed about any updates or changes in legislation.
  5. Implement Clear Policies and Procedures: Establish clear policies and procedures for wage calculation, including overtime, leave entitlements, and superannuation contributions. Make sure employees are aware of their rights and how to report any concerns regarding wage payment.
  6. Keep Detailed Records: Maintain accurate and detailed records of employee hours worked, wages paid, and any additional entitlements. This documentation can serve as evidence of compliance in the event of an audit or investigation.
  7. Promote Transparency and Communication: Foster a culture of transparency and open communication within the organisation. Encourage employees to raise concerns or questions about their wages without fear of retaliation.

Businesses can avoid costly fines and reputational damage by prioritising compliance. Investing in robust payroll processes, training and regular payroll audits is not just about meeting legal obligations, it is also about fostering a culture of accountability and trust in your business.

If you have concerns about paying your workers less than they’re legally entitled to, then contact our team of experienced HR consultants today! We have a wealth of experience in this area and can assist.

Need Assistance?

At Allan Hall HR, we have a team of experienced HR consultants. To learn more about our services, please click here. Alternatively, please feel free to call us on 1300 916 764 or contact us here to discuss any questions you may have with us in regard to wage compliance.

HR Support Centre Demo

We invite all our clients to explore our complimentary HR Support Centre, designed to help you navigate your employee obligations and stay updated on legislative changes. This valuable resource offers ready-to-use HR templates, best practice guidance, checklists, and access to a vast library of articles on compliance and employee management. Book in a free demo today.

CONTACT ALLAN HALL HUMAN RESOURCES

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ATO focus areas for small business

Posted on | by Allan Hall

The ATO reveals what they’re focusing on for small business and how to get it right.

The ATO has published their focus areas for small business. It shows small business owners the current risks and behaviours attracting the ATO’s attention.

The ATO actively detects, treats and addresses concerning behaviours to ensure all small businesses can operate on a level playing field. Their 3 key focus areas include:

  • business income is not personal income
  • deductions and concessions
  • operating outside the system.

The ATO will continue to publish new focus areas quarterly. By being transparent about what attracts their attention, they want to ensure small businesses get it right from the start.

Use the ATO’s focus areas for small business as a guide for conversations to help get your tax right.

Business owners are also encouraged to visit good business habits and Essentials to strengthen your small business, the ATO’s online learning site that offers over 30 free, self-paced courses.

CONTACT ALLAN HALL BUSINESS ADVISORS

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Valuing fund assets for SMSFs

Posted on | by Allan Hall

Each year you need to value your SMSF assets and provide supporting evidence to your auditor.

One of the many responsibilities SMSF trustees have every income year is valuing your fund’s assets at market value.

The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing your fund’s accounts, statements and SMSF annual return (SAR).

Your asset valuations will be reviewed by your approved SMSF auditor as part of the annual audit prior to lodgement of your SAR. Your auditor will check that assets have been valued correctly, assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets.

Make sure you get your valuations done before going to your auditor.

It’s your responsibility to provide objective and supportable evidence to your auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgement of your annual return or a contravention if mistakes have been made.

Start researching now to find what type of evidence your need to support the valuation as this can take time. For some asset types the law requires valuations to be undertaken by a qualified independent valuer. Find out more by visiting SMSF valuation guidelines.

CONTACT ALLAN HALL SUPERANNUATION

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Workplace Gender Equality Agency Reporting

Posted on | by Allan Hall

WGEA Reporting or Pay Secrecy

Workplace Gender Equality Agency (WGEA) has published the 2022-2023 median gender pay gaps for private sector businesses with 100 or more employees, encompassing both base salary and total remuneration.

Some notable findings include:

  • 30% of employers have a median gender pay gap between the target range of -5% and +5%
  • 62% of median employer gender pay gaps are over 5% and in favour of men
  • The remaining (8%) are less than -5% and in favour of women
  • Across all employers, 50% have a gender pay gap of over 9.1%. 

The above findings suggest that there is still a large gap between gender pay equality with only 30% of businesses within the target range. This is largely demonstrated by the statistic that 62% of employers are currently paying men over 5% more than women across the business. 

Who needs to complete an annual WGEA report?

All private sector businesses with 100 or more employees are required to complete their WGEA report between 1 April and 31 May of each year. The report must provide data from the previous year for the date ranges of 1 April through to 31 March. 

For more information about who needs to report and how to complete the WGEA report, please click:

WGEA EMPLOYER PORTAL

Even if your company has fewer than 100 employees, it is important to be proactive in identifying potential inequalities within the workplace. Conducting a payroll audit and internal salary benchmarking are important steps to take. 

How does pay secrecy impact gender pay inequality? 

Pay secrecy can play a big part when it comes to gender inequality in the workplace. Pay secrecy, where employees are prohibited from discussing their pay, hampers transparency and can conceal gender-based pay disparities. For this reason, changes have been made from 7 December 2022 to remove the permittance of pay secrecy clauses within contractual agreements. This change aims to advocate for transparency in pay practices to ensure that all employees, regardless of gender, are fairly compensated for their work. 

MORE INFORMATION ON PAY SECRECY

Need HR Assistance?

At Allan Hall HR, we have a team of experienced HR consultants. To learn more about our services, please click here. Alternatively, please feel free to call us on 1300 916 764 or contact us to discuss any questions you may have in regard to WGEA Reporting or Pay Secrecy.

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cash in a hessian sack

SMSF record-keeping best practices

Posted on | by Allan Hall

ATO reminds SMSFs to keep good records

How self-managed super fund (SMSF) trustees can meet their responsibility to keep accurate tax and super records.

Keeping good records

Keeping good records is more than just knowing which records to keep and for how long. It involves having a system for organising and maintaining records that makes it easier for you, and any SMSF professional you use, to:

  • complete the fund’s independent audit each year
  • lodge your fund’s annual return.

It may also help reduce audit and administration costs for your fund.

To help keep your records organised, you may want create separate files for your fund’s more permanent records, and for records that relate to a specific financial year.

For example, in your permanent file you may want to keep:

  • the fund’s trust deed
  • the fund’s investment strategy
  • details of the regular reviews of the fund’s investment strategy, including the consideration of insurance for members of the fund
  • reasons for decisions on the storage of collectables and personal use assets
  • minutes of trustee meetings
  • all signed trustee declarations
  • records of trustees consenting to their appointment as a fund trustee
  • records of all changes in fund members and trustees.

As each SMSF is unique, with its own investment strategies to achieve its objectives, you should consult with a professional licensed adviser when setting up a record-keeping system that suits your fund.

Keeping all relevant records together will simplify the process of compiling the records you need to give to your fund’s independent auditor. If your fund regularly holds trustee meetings, you could create a separate folder for them, and sort them by date.

Take minutes of all investment decisions

You should take minutes of all investment decisions, including:

  • why a particular investment was chosen
  • whether all trustees agreed with the decision.

This is because if you, as one of the fund’s trustees, invest the SMSF’s money in an investment that fails, the other trustees could take action against you for failing to be diligent in your duties.

However, if your investment decision was recorded in meeting minutes signed by the other trustees, you will have a record to show that they agreed with your actions.

Signature requirements for financial statements

Under Australia’s super laws, SMSF trustees must sign their SMSF’s financial statements before finalising their annual audit. This includes an operating statement and a statement of financial position which must be signed by the required number of trustees or directors of the corporate trustee.

Minimum record-keeping requirements

The most important reason for keeping good records is that it’s a legal requirement for you to do so. You may also need to provide accurate records to us if we ask to see them.

You need to keep any SMSF records for a minimum of 5 years.

Despite what you may have heard or read elsewhere, you cannot access your super before you retire unless you meet one of the very few exceptions to this fundamental rule of super law. Read more »

CONTACT ALLAN HALL SUPERANNUATION

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audit & assurance

Safeguard Your Affairs with Audit Insurance

Posted on | by Allan Hall

Audit Insurance: A different perspective on a wise investment

In the dynamic world of business, facing an Australian Taxation Office (ATO) audit can be a daunting and costly experience for both business owners and individual taxpayers alike.

However, did you know that already 15% of Allan Hall business clients have chosen to secure their financial well-being by opting for audit insurance?

This strategic decision is not just about protecting finances; it’s about ensuring peace of mind during potential ATO reviews.

The Cost of an ATO Audit

The average cost for professional fees associated with a standard ATO review of a proprietary limited (Pty Ltd) company can be as high as $18,000. This figure includes the expenses incurred in navigating through the intricacies of tax regulations, responding to ATO queries, and addressing any discrepancies that may arise during the audit process.

The Affordable Solution

Enter audit insurance — a financial safety net designed to alleviate the burden of exorbitant audit-related expenses. For an average annual cost of around $600, businesses can secure comprehensive coverage that not only shields them from the financial impact of an ATO audit but also allows them to navigate the process with professional support.

Why Choose Audit Insurance?

1. Cost Mitigation:

  • Shield your business from hefty expenses associated with ATO audits, including accounting and legal fees.
  • The annual investment in audit insurance is minimal compared to the potential costs of an unexpected ATO review.

2. Peace of Mind:

  • Focus on running your business without fear of unexpected financial setbacks due to audits.
  • Audit insurance provides peace of mind, allowing you to concentrate on growth and development rather than compliance concerns.

3. Professional Support:

  • Freedom to access our team of experts to assist in handling ATO audit queries ensures that your business is in capable hands.
  • Receive guidance throughout the audit process, ensuring compliance and minimising the risk of financial penalties.

Being prepared for unforeseen challenges is a mark of a prudent entrepreneur. Audit insurance emerges as a sensible investment, providing a safety net against the potential financial impact of ATO audits.

With an average annual cost that pales in comparison to the potential expenses of an initial review or an extensive audit, business owners can make an informed decision to safeguard their financial health. In the end, the choice is yours but with audit insurance, you can make that choice with confidence and financial security.

READ MORE OR REQUEST A QUOTE

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Business debt on ATO’s watchlist

Posted on | by Allan Hall

The five types of business debt at the top of the tax office’s watchlist

The Australian Taxation Office (ATO) has unveiled the top five categories of business debt that have captured its attention, signalling the end of the unprecedented leniency extended to late payers during the COVID-19 lockdowns.

Speaking at the Tax Institute Tax Summit in Melbourne, Vivek Chaudhary, the ATO’s deputy commissioner of lodge and pay, emphasised the necessity of offering substantial support to taxpayers, including small businesses, amidst lockdowns and stringent public health measures.

The ATO’s arsenal during the pandemic included payment plans, deferred deadlines, waived penalties and interest, and the option to file without immediate payment, all aimed at aiding businesses during challenging times. Chaudhary acknowledged the positive outcomes of these measures but also pointed out their impact on payment behaviour, with an increasing number of businesses failing to meet tax deadlines compared to the pre-pandemic period.

Chaudhary identified five priority payment categories where the ATO’s renewed focus will be most evident:

  1. Topping the list is the unpaid Superannuation Guarantee Charge (SGC), a penalty imposed on businesses that fail to fulfil their Superannuation Guarantee obligations. Notably, small businesses owe the majority of this debt, totalling $1.8 billion. To ensure compliance, the ATO has equipped itself with tools such as garnishee notices, payment directives, Director Penalty Notices, and potential legal actions to secure SGC payments.
  2. Chaudhary expressed concerns about new self-assessed debts raised by employers, suggesting that taxpayers might be waiting for the ATO to prompt payment before taking action.
  3. Refund fraud remains a significant worry, with fraudsters siphoning billions of dollars from the tax system through counterfeit GST refunds.
  4. The ATO is also monitoring substantial aged debts exceeding $100,000, and
  5. Debts arising from audit actions initiated by the ATO. Chaudhary emphasised that while some audit adjustments stem from genuine errors, others result from negligence, recklessness, or deliberate attempts to evade tax payments, and such cases will receive no leniency, with heightened expectations for debt settlement.

Consequently, the ATO is reverting to its pre-pandemic compliance strategies to transition from the COVID-induced payment culture to a more standard payment approach. ATO commissioner Chris Jordan revealed that the ATO is pursuing approximately $50.2 billion in collectable debt, with small businesses accountable for over $33 billion of this total.

Read the full speech Addressing collectable tax debt – Tax Institute’s Tax Summit 2023 here »

CONTACT ALLAN HALL BUSINESS ADVISORS

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Federal Budget weight behind tax audits

Posted on | by Allan Hall

The 2023 Federal Budget included $1 billion for audits of taxpayers over the next 4 years.

Therefore all taxpayers have an increased chance of a tax office review of their returns in the near future.

Did you know that our costs for assisting you with the management and supply of information to the ATO for their reviews can be insured?

We’ve partnered with AuditCover to share their offer with our clients.  AuditCover covers the professional fees you may incur when responding to a tax audit, review, investigation or enquiry from the ATO or state-based authorities and agencies.

If you haven’t already done so, please consider getting an online quote below.

If you’d like assistance with generating a quote, please let us know and we will be happy to help.

GET A QUOTE FOR AUDIT INSURANCE

If you have any questions, you can call AuditCover on 1300 895 797 or email them at [email protected]. Need more info? Read more here »

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