Employer Obligations Audit Plan

Dated: October 2006

The ATO has recently issued the following notice on their web site:

"We will undertake audits and reviews to ensure employers are complying with their pay as you go (PAYG) withholding, fringe benefits tax (FBT), superannuation guarantee (SG) and choice of superannuation fund obligations."

They intend to conduct both field visits and phone reviews by identifying potential inconsistencies in employer reporting obligations.

The ATO will also be looking into labour market arrangements including contracting and labour hire services.

7,743 phone enquiries, client profiling reviews and field visits are planned for 2006/07.

This process of enquiries and reviews raised $182.5 million in extra revenue as a result of the ATO's 2005/06 compliance activities.

The major issues noted by the ATO were:

• poor record keeping
• poor cashflow management
• lack of understanding of the less common issues, such as termination payments
• not lodging activity statements when they are unable to pay the full amount owing
• wrong Australian Business Number (ABN) on payment summaries
• poor communication between bookkeepers, business owners and agents
• business that have incorporated and have not realised that they need to withhold payments to directors.

Should you have any questions in relation to this matter or feel we could be of assistance to you in reviewing your employer obligations, please contact us immediately.