BSBFIM601 Manage finances Assessment Task 1

1. Identify and describe financial probity requirements for businesses. 

Astringent adherence to a code of ethics based on absolute honesty, especially in commercial
(monetary) situations and beyond legal standards, is referred to as financial probity. Officials
shall conduct ethically following the APS Values (given out in section 10 of the Public Service
Act of 1999) and the Code of Ethics (outlined in section 10 of the Public Service Act of 1999).
When it comes to procurement, follow the rules (laid out in section 13 of the Public Service Act
of 1999). Participants' confidential information, including commercially sensitive information
and intellectual property, must be kept private. Ensure that tender processes, negotiations,
evaluation processes, and contract management processes are auditable, transparent, and
accountable. proactively identify and manage conflicts of interest. Proactively identify and
manage conflicts of interest.

2. Identify four examples of what would be consider fraudulent behavior regarding

company finances.

A corporation can lose assets, commit acts of theft from others, or falsify its financial statements
and stated outcomes as a result of corporate fraud. I'll give you a few instances.

Personal Purchases
On his behalf, an employee can use funds to purchase goods or services. This is normally
accomplished by approving his spending reports or invoices from suppliers. To be able to
persuade other employees to participate in this asset diversion, the person must be in a
sufficiently senior position. The amount of money that can be diverted usually increases as the
fraudster's job title increases in seniority.

Ghost Employees
Payroll personnel can create "ghost employees" and then pay them, diverting the money to their
bank accounts. This form of fraud is more likely to occur when there are insufficient controls
over employee pay.

Skimming
Before they can be documented in a company's financial records, incoming money are
intercepted. When a person is allowed to open the mail while still keeping track of financial
activities, this is a common occurrence. The mail room or the accounting department are the
most common places where this type of fraud occurs.

Tax Avoidance
Tax filings can be altered to show less taxable corporate income than is the case, resulting in
lower tax payments. This can only be accomplished with the help of high management, who
usually approves the tax returns.

Asset Theft
By stealing assets, such as cash or fixed assets, any employee can steal from a company.
Employees may be tempted to engage in this activity if there are insufficient restrictions.
Unauthorized Use
Unauthorized use of corporate assets by an employee, such as driving a company automobile for
personal use or using a company condominium for personal use, is prohibited. Although the asset
is not stolen, it is being used, and as a result, its value decreases with time. Personal use may also
cause these assets to be harmed or destroyed.

Financial Statement Falsification

Falsifying a company's financial statements can lead to outstanding financial success. After that,
these documents can be used to acquire bank loans or sell stock to investors. This type of fraud
might be carried out wholly within the accounting department, or it can be imposed by
management. The following are some examples of such falsification:

 Delaying the recognition of depreciation by extending the depreciation period

 Transferring debt to special-purpose organizations
 Delay recognizing revenues and accelerate recognizing expenses
 Invest in your expenses
 The cost of goods sold is reduced by counting non-existent inventory.

3. Identify the requirements for audited accounts and the purpose of an audit report.

Requirements for audited accounts

Title
"Report of Independent Registered Public Accounting Firm" must be the title of the auditor's
report.
Addressee
For companies that are not formed as corporations, the auditor's report must be addressed to the
shareholders and board of directors, or equivalents. The auditor's report may include additional
addressees.

Opinion on the Financial Statements

The title "Opinion on the Financial Statements" and the following items must be included in the
first section of the auditor's report:
In the case of a financial statement audit, the company's name;
 A statement identifying each financial statement that has been audited, as well as any
accompanying schedules;15
 Each financial statement and corresponding schedule, if appropriate, identified in the
report's date or period;
 The financial statements, including any related notes and any related schedule(s) named
and referred to as the financial statements in the report, were audited; and
 Following the applicable financial reporting framework, an opinion that the financial
statements present fairly, in all material respects, the company's financial position as of
the balance sheet date, as well as the results of its operations and cash flows for the
period then ended.16 The opinion should also identify the applicable financial reporting
framework.
Basis for Opinion
The "Basis for Opinion" section and the following components must be included in the auditor's
report's second section:

 A statement stating the company's management is responsible for the financial accounts;
 A statement that it is the auditor's responsibility to express an opinion based on the audit
on the financial statements;
 A statement indicating the PCAOB's criteria were followed during the audit;
 According to PCAOB requirements, the auditor must plan and conduct the audit to gain
reasonable certainty that the financial statements are free of material errors, whether
attributable to fraud or error;
The following is a statement from the audit:
Developing methods to analyze the risks of material financial statement misrepresentation,
whether due to fraud or error, and to respond to those risks;

 Examining evidence regarding the amounts and disclosures in the financial statements on
a test basis;
 evaluating the accounting standards applied and the management's significant estimates;
and
 assessing the financial accounts' overall presentation;
 In other words, a statement indicating the auditor feels the audit provides a reasonable
basis for his or her conclusion; and
 According to the US federal securities laws and the related rules and regulations of the
SEC and the PCAOB, the auditor is a public accounting firm that has been registered
with the PCAOB and is obliged to be independent concerning the company.
Signature, Tenure, Location, and Date
The following elements must be included in the auditor's report:
 The firm of the auditor's signature;
The year the auditor began functioning as the company's auditor for the first time in a row;
Note: Other firms that the auditor's firm has purchased or that have merged with the auditor's
firm are included in this subparagraph's references to the auditor. If the auditor is unsure of the
year he or she began serving as the company's auditor continuously, such as as a result of a
merger, acquisition, or change in ownership structure, the auditor should state that he or she is
unsure and provide the earliest year of which he or she knows.
 The auditor's report is issued from the city and state (or country, in the case of non-U.S.
auditors); and
 The auditor's report's publication date.

Purpose of an audit report

The goal of an audit is to determine if the financial report's information, taken as a whole,
accurately reflects the organization's financial situation at a given time, such as: Are the balance
sheet's details of what the company owns and owes appropriately recorded?

4. Describe the principle of cash accounting as well as one advantage and one disadvantage
of cash accounting. 
Principle of cash accounting
Payment revenues are documented in the period in which they are received, and expenses are
recorded in the period in which they are paid in cash accounting. In other words, when cash is
collected and paid, revenues and expenses are recorded, correspondingly.

Cash-based accounting has the following advantages:

You can keep it up and maintain it easily. Because the money is simply in or out of your bank
account, it's simple to keep track of how much cash the company has at any given time. Instead
of paying tax on invoices, you just have to pay tax on the money you've received.
Cash-based accounting's drawbacks are as follows:
It can be deceptive because it may seem that you are making money when you haven't paid your
bills in a while. Because you simply have a day-to-day picture of your finances rather than a
long-term perspective, it is unhelpful when it comes to making business decisions.

5. Describe the principle of accrual accounting and one advantage and one disadvantage of
accrual accounting. 

Principle of accrual accounting 

The accrual principle states that accounting transactions should be recorded in the period in
which they occur, rather than the period in which the cash flows associated with them occur.
Advantage accrual accounting
In general, accrual accounting makes it easier to see how revenue and expenses relate to each
other, giving you a better picture of how profitable you are. On the balance sheet, it also gives a
more realistic view of a company's assets and liabilities.
Disadvantage of accrual accounting
Cash flow must be tracked separately since corporations record revenue before they get the cash.

6. Explain the four main taxation and superannuation obligations for a business. Briefly discuss
each obligation. 

GST, PAYG, payroll tax, and corporation tax are just a few of the taxes that businesses may be
required to pay.

1. Goods and Services Tax (GST)

The most common items and services are subject to the Goods and Services Tax (GST). GST is a
10% tax on the cost of goods and services in Australia.
If your firm is in Australia, you must register for GST with the Australian Taxation Office
(ATO).
Your yearly business income is $75,000 or more (or $150,000 or more for non-profit
organizations) or is likely to be more than that.
You charge passengers for transportation by taxi or limousine as part of your business, which
means you charge passengers for transportation by taxi or limousine.
You want to take advantage of the fuel tax credits that are available to you in your state.
Depending on your company's BAS reporting arrangement, you can pay your GST due monthly,
quarterly, or annually.
2. Pay As You Go (PAYG)
With PAYG withholding, as a small business owner, you must assist employees in meeting their
tax obligations.
Employers who withhold income tax payments from their employees are referred to as PAYG
withholding agents.
The majority of PAYG payments are made quarterly, with an additional payment made after the
fiscal year.
3. Payroll tax
A state tax on wages and other benefits paid by employers is known as a payroll tax.
It's based on how much you pay in monthly wages and how many people you employ. Payroll
tax is paid to the state government of each state or territory where your workers work.
Because payroll tax thresholds differ from state to state, your payroll tax responsibilities may
differ from one state to the next. Here's where you may learn more about your state's payroll tax
responsibilities. We've also compiled a list of payroll tax suggestions to assist you save time and
money.
You may be required to pay payroll tax in addition to fringe benefits tax. More information
regarding the tax on fringe benefits can be found here.
4. Company tax
A company tax, often known as a profit tax, is a tax imposed on your company's profits.
For enterprises with an annual turnover of less than $10 million in Australia, the corporation tax
rate is 28.5 percent.
The corporate tax rate climbs to 30% of annual earnings for enterprises that make more than this.
Pay-as-you-go (PAYG) is a method in which companies pay company tax every quarter.

7. Identify the Act that details requirements for financial reporting and auditing and,
explain the requirements for companies for preparing and lodging financial reports under
this Act.

Corporations Act 2001

The obligations for financial reporting and auditing under the Corporations Act of 2001 are
outlined in this section (Corporations Act).

The Corporations Act of 2001 establishes several statutory obligations.

to keep track of the finances There are three main requirements:
• To keep track of financial transactions (s 286)
• To prepare a financial report and a board of directors' report each year.
a remark (s 292)
• Request an audit of the financial report (s 301)
A financial report, a directors' report, as well as a director's report should be sent to
Members' report from the auditor (ss 314–5)
(ASX where ASX where ASX where ASX where) to ASIC to lodge those documents.
(ss 319–320) (as appropriate)
• To provide the materials to the annual general meeting
an an an a (s 317)
A half-year report will be prepared (s 302)
• To have the half-year report audited or evaluated by a third-party auditor
by the examiner (s 309)
• To submit the auditor's report and the half-year report to
(Where appropriate, ASX) ASIC (s 320)

8. Explain the requirements for registered foreign companies regarding preparing and
lodging financial reports. 

Registered foreign companies

ASIC requires you to file an annual return (Form 406) but not financial statements.

Corporations (Foreign-Controlled Company Reports) Instrument 2017/204 of the Australian

Securities and Investment Commission (ASIC) exempts certain foreign firms that are:
 like an Australian private corporation, it is subject to the same constraints.
 not a lot of
 In their own country, they are not compelled to prepare financial statements.
as a result of the duty to produce and submit a financial report to the ASIC if:
 A 'big group' isn't something they belong to.
 For the entire financial year, a parent consolidates the registered foreign company and
submits its financial accounts to ASIC.
The rest of the foreign firms that have been registered in the United States
You have to be ready.
 financial statements
the ones you're looking for
 prepared in compliance with the law in the country where the firm was founded or
 (when reports are not made in the company's country of origin) prepared in line with
Chapter 2M of the Corporations Act
 audited following the law in the country where the firm was founded or
 if ASIC demands it (and not in the company's home country), and
 If it is required in the company's home country, it will be distributed to members.

9. Identify the current company tax rate for both smaller and larger businesses.

Except for'small or medium business' enterprises, which are subject to a reduced tax rate of 25%
for the 2021/22 income year (26 percent for the 2020/21 income year), all corporations are liable
to a federal tax rate of 30% on their taxable revenue. Only those corporations that, together with
specified "related" entities, have a combined turnover of less than AUD 50 million are eligible
for the reduced tax rate.

10. Explain the process by which a business reports GST to the Australian Tax Office.

Your business's GST turnover and other reporting requirements determine the method you
employ to report goods and services tax (GST):

You have a turnover in the GST that is less than $10 million
The Simpler BAS reporting method is the most common way to report GST.
You can use either the Simpler BAS or the GST full reporting method if your total sales exceeds
$10 million or if you make input taxable supplies as your major business or enterprise activity.
You can use the GST instalment system if you pay quarterly and report annually.
If you have a turnover of more than $10 million in GST,
The full reporting approach is used to report GST.

Your ATO records provide us with the GST turnover figure we use to determine your GST
reporting method. You had previously recommended it (at GST registration or subsequently).

Based on your GST turnover, your GST reporting method will usually be rolled over after each
financial year. You can modify your GST reporting method by contacting us.

11. Identify the penalty rate to be applied if a supplier does not provide an ABN? 

The proportion is 48.5 %.

When a supplier is operating a business and fails to provide the payer with their ABN, what is
the rate of withholding? The rate of withholding for failure to produce an ABN is 48.5 percent,
which is the sum of the highest marginal tax rate plus the Medicare levy. There may be a
requirement to withhold from a paying "entity."

12. A non-profit organisation needs to register for GST after it has a turnover of more than
how much? 
If your GST sales is $150,000 or more, you must register for goods and services tax (GST), but
you can choose not to register if your GST turnover is less than $150,000.

13. Explain the difference in Pay As You Go withholding

obligations for employees and contractors. 

The Australian Tax Office (ATO) allows you to pay a portion of a future liability in advance to
lower the amount owed to the ATO at the end of the financial year by using the Pay As You Go
(PAYG) system. Making frequent payments throughout the year helps businesses better manage
their cashflow and lowers the danger of being slammed with a hefty debt in the future.
PAYG is divided into two categories:
PAYG Withholding (or PAYG-W) is a pre-payment for your employees' income tax liabilities
that is made on their behalf.
PAYG Instalment (or PAYG-I) is a pre-payment made by a company to cover its own
corporate income tax liability.
The key distinction between the two is that one is for your employees, while the other is for your
company. We're both in favor of income tax relief!
 Task 1 Part B

Part 1 Financial Report

The financial report analyzes the profit and loss for Grow management consultant, including
revenue generated, cost of sales, gross profit/loss margin, and net profit/loss margin, as well as
the general success of the company's operations.

2016-2017 performance

Grow Management Consulting's net sales for FY2016-2017 were $1,335,600, and its total
expenses were $683,253, resulting in a net profit of $652,077. We can see that the major source
of income is consulting fees, which generate a profit of $1,175,600, followed by executive search
services, which generate a profit of $120,000, workshops, which generate $38000, and
publications, which generate a profit of $2000.

Table 1: For FY 2017-2018, the income source categories of Grow Management consulting based on
their budgeted, actual, and variance of total income predicted.

Income Budget Actual Variation

Consulting Fees $1,210,000 $1,410,720 $200,720
Conference $75,000 $45,000 $-30,000
E-Book $10,000 $15,000 $5000
Executive search $144,000 $144,000 $0

Strategic Goals and Priorities

The goal is to sell 10,000 copies of the E-book in the coming fiscal year, with the number of copies
increasing over time. Starting in 2018, the company wants to have an annual conference, according to
the business strategy.

Cash Flow Statement Analysis

As we can see from the cash flow statement, June 2017 was the month with the highest net income
sales, resulting in the highest year-end surplus of the year. The surplus in September 2016 was the
lowest of the year due to high expenses and accounting fees, which resulted in a low surplus in that
month. The entire cost for the fiscal year 2016-2017 was $42,435 higher than expected.

Financial Software

Wiise is a well-thought-out business tool. It aids small businesses in gaining a better understanding of
their operations, allowing them to view the big picture and make informed decisions. SMBs may use
Wiise to transition from accounting software to business software that can handle the rising complexity
of their firm. By combining banking, invoicing, and payments, Wiise pulls your systems together in one
place to provide you a complete picture of your company's finances.
GnuCash is easy to use for personal accounts, but it's also adaptable enough to be utilized by small
enterprises. While the software is simple to use, the fact that it is ideal for small business accounting is
due to the inclusion of a number of non-standard functions, such as payroll administration and double-
entry accounting.

If you operate on many platforms or don't use Windows by default, HomeBank will appeal to you.
HomeBank is a portable tool that can be installed on Windows, macOS, and Linux (there's also an
Android version in the works) and makes personal financial conveniently accessible. You can import data
from another application to save having to start from scratch if you've been using another tool to handle
your finances, such as Quicken or Microsoft Money.

Advantages of MYOB:

Anytime, Anywhere Access

Employees can work on organizational material from any device and from any location utilizing cloud
accounting. MYOB discovered that the most common reasons for embracing cloud computing were the
ability to access data from any location (42 percent), followed by the opportunity to work remotely (42
percent), and the ability to access data from any location (42%) (28%).

"Using the cloud can give you a significant competitive advantage," argues MYOB's CEO, Tim Reed.
Businesses are increasingly employing teams that work from home, in the office, or on the road.
"Anytime, anywhere access can dramatically increase a workforce's productivity by reducing employee
stress and strengthening an organization," says the cloud's power. "Anytime, anywhere access can
dramatically increase a workforce's productivity by reducing employee stress and strengthening an
organization."

Greater Speed Of Input

It's not uncommon for accounting systems to be terribly slow. Many manual accounting operations are
automated by MYOB, which saves time and money. Manual accounting systems frequently involve
multiple entries of the same data. By automating credit notes, purchase orders, payroll, and other
procedures, MYOB synchronizes information and saves time. Business analysis is also made simple. To
assist with managing, monitoring, and controlling the business, reports such as Statement of Cash Flows,
Profit and Loss Statements, and others are produced in a smooth manner. Users can generate
substantial reports with only a few mouse clicks rather than waiting for several teams to collect and
consolidate data.

This enables businesses to anticipate challenges with cash flow or periods of expansion, allowing them
to plan for the future with certainty.

Greater Accuracy

Effective financial management necessitates the use of accurate data. MYOB automates these manual
processes, decreasing the chance of human error and dealing with out-of-date data. Organizations that
rely on manual accounting systems face the risk of human error and working with out-of-date data.
MYOB also ensures that content updates occur in real time, so that staff are constantly working with the
most up-to-date information, as well as built-in controls to detect and eliminate duplicate entries and
redundancy problems. Updated accounting records, for example, are immediately reflected in client
account balances, allowing for accurate representations of the company's financial status at all times,
allowing for true financial stability and security.

Reduced Costs

Hardware, operating systems, and accounting costs can quickly empty a reasonable budget. With
MYOB's cloud service, businesses may save money on both financial and operational costs by paying
only a monthly charge rather than paying a lump sum upfront. Maintenance, upgrades, and backups are
no longer necessary. In addition, the organization no longer has to deal with server breakdowns,
hardware upgrades, and other technological concerns. To avoid paying for infrastructure, 32% of
Australian SMEs use cloud computing, according to CCH.

Businesses may save up to $125 billion per year if they switched to cloud computing, according to a
study conducted by Cloud Accounting Australia. "Cloud software provides an opportunity for small and
medium businesses to adopt state-of-the-art technology with very cheap running costs," says Michael
Kuster, CEO of Cloud Accounting Australia. We expect to see a variety of firms reduce their operational
costs by transferring their bookkeeping, accounts, and financial reporting online over the next few
years."

MYOB offers enterprise-level capabilities to help businesses save money on both assets and operations,
allowing them to increase their productivity.

Disadvantages of MYOB:

Data security is a big concern for cloud accounting systems like MYOB, with 46 percent of Software
Advice's poll respondents admitting that security is the top concern. This is due to the fact that online
content may be open to tampering, fraud, and other forms of tampering. MYOB, on the other hand,
puts a lot of effort on security architecture and design, as well as applying industry best practices. This
kind of protection, as well as secure user access restrictions and approval processes, is not something
that many businesses can afford. An organization's personnel must be instructed on the software to
avoid employees continuing to use inefficient manual techniques. Many firms aren't taking advantage of
cloud automation because they've grown accustomed to the previous system's limitations. As a result,
arranging for employee training is crucial. For MYOB Essentials subscribers, MYOB offers complimentary
webinars.
Part 2

Budget
July 18 to June 19
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Budget
INCOME
Consulting fees 117,570 102,000 99,000 146,400 117,600 145,200 105,150 107,400 126,000 99,600 84,600 160,200 1,210,000
Conference 0 0 0 0 17,000 16,000 12,000 0 0 0 0 0 75,000
E-book 1,000 1,200 1,500 1,100 1,000 1,200 1,100 1,300 1,100 1,400 1,300 1,800 10,000
Executive search 8,400 9,600 14,400 12,000 14,400 10,800 10,800 10,800 13,200 14,400 13,200 12,000 144,000

NET INCOME 126,970 112800 114900 159500 150000 173200 129050 119500 140300 115400 99100 174000 1,439,000

EXPENSES
Salaries/wages 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 44,100 504,000
Superannuation 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 5,250 63,000
Cleaning 840 840 840 840 840 840 840 840 840 840 840 840 10,080
Accounting fees 0 0 7,165 0 0 0 0 0 0 0 0 0 6,300
Advertising and marketing 1,050 0 525 735 0 840 0 0 2,100 0 0 0 5,250
Contract writer (e-book) 10,500 3,759 3,759 0 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 11,550
Computer software 0 2,730 0 0 0 2,100 0 0 0 0 0 0 4,200
Motor vehicle expenses 686 474 914 186 157 276 588 0 966 620 220 357 4,200
Utilities 0 705 0 0 0 1,550 776 0 1,100 0 0 0 4,200
Insurance 0 0 0 329 329 0 0 3,370 0 0 0 0 4,200
Office supplies 105 126 189 126 158 200 189 242 242 137 231 262 1,575
Lease/loan payments 105 126 105 105 220 53 158 0 210 157 126 210 1,365
Rent 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 3,759 45,108
Sundries 210 210 147 178 241 210 210 147 170 241 189 231 2,100
Travel and Accommodation 1,662 0 1,506 2,044 128 0 0 0 134 180 0 0 5,250
Conference venue and catering 0 0 0 0 0 0 10,000 0 0 0 0 0 5,000
Speaker fees and travel 0 0 0 0 0 0 11,000 0 0 0 0 0 10,000
Marketing (conference only) 0 0 0 0 2,500 2,500 2,500 0 0 0 0 0 5,000
Conference bags 0 0 0 0 0 0 1,200 0 0 0 0 0 1,000
Conference casual project officer 0 5,000 5,000 5,000 5,000 5,000 5,000 0 0 0 0 0 30,000
E-book 0 10,000 0 0 0 0 0 0 0 0 0 0 10,000
Desktop publishing 0 3,000 0 0 0 0 0 0 0 0 0 0 3,000
Marketing (e-book) 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Repairs & maintenance 105 0 420 0 0 420 0 315 0 0 0 0 1,575
Telephone 315 305 325 336 305 315 305 325 346 252 220 220 3,150

TOTAL EXPENSES 68,787 80,484 74,104 63,088 66,846 71,272 89,734 62,207 63,076 59,395 58,794 59,088 742,303

SURPLUS/ DEFICIT 58,183 32,316 40,796 96,412 83,154 101,928 39,316 57,293 77,224 56,005 40,306 114,912 696,697

Grow Management Consultants Pty Ltd

July 18 to June 19 Budget Forecast

INCOME Budget
1,210,00
Consulting fees 0
Conference 75,000
E-book 10,000
3,702,02
Executive search 0
   
4,997,02
NET INCOME 0

EXPENSES
Salaries/wages 504,000
Superannuation 63,000
Cleaning 10,080
Accounting fees 6,300
Advertising and marketing 5,250
Contract writer (e-book) 11,550
Computer software 4,200
Motor vehicle expenses 4,200
Utilities 4,200
Insurance 4,200
Office supplies 1,575
Lease/loan payments 1,365
Rent 45,108
Sundries 2,100
Travel and Accommodation 5,250
Conference venue and catering 5,000
Speaker fees and travel 10,000
Marketing (conference only) 5,000
Conference bags 1,000
Conference casual project
officer 30,000
E-book 10,000
Desktop publishing 3,000
Marketing (e-book) 1,200
Repairs & maintenance 1,575
Telephone 3,150

TOTAL EXPENSES 742,303

Part 3
Key Financial Compliance
Requirements and Liabilities for
Tax
Part 3
Key Financial Compliance
Requirements and Liabilities for
Tax
Part 3
Key Financial Compliance
Requirements and Liabilities for
Tax
Part 3
Key Financial Compliance
Requirements and Liabilities for
Tax
Part 3
Key Financial Compliance
Requirements and Liabilities for
Tax
Part 3

Key Financial Compliance Requirements and Liabilities for Tax

GST reporting requirements

The Australian Taxation Office (ATO) recently changed the criteria for small enterprises to declare GST.

 G1: Total Sales

 1A: GST on Sales
 1B: GST on Purchases
 1H: GST Instalments (when applicable)

The following labels are no longer required:

 G2: Export Sales

 G3: GST-Free Sales
 G10: Capital Purchases
 G11: Non-Capital Purchases

These improvements have been made to make it easier to fill out Business Activity Statements and
lessen the quantity of information that must be submitted (BAS). On their BAS, small firms who qualify
for the simplified GST reporting will only have to disclose the following labels.

PAYG withholding obligations

You must deduct tax from the benefits you pay to those who are ill or disabled.:

 under 60 years old and receive a reversionary capped defined benefit income stream
  if the person who died was 60 years old or older at the time of death
 if the benefit is from a defined benefit pension plan that is capped

You must do the following if you must withhold tax:

 register for pay as you go (PAYG) withholding

 A tax file number declaration must be obtained from the member. If the receiver does not give
their TFN before the payment is issued, you must withhold tax at a rate of the highest marginal
rate (47 percent for residents and 45 percent for non-residents as of July 1, 2017).
 Your first step should be to check for a tax treaty External Link with the recipient's tax-paying
country of residence. The tax treaty will tell you if the benefit payment will be assessable
income in Australia or the other country, and if it is only assessable in the other country, no tax
will be withheld.
 pay the ATO the amount of tax withheld
 issue the member a summary of PAYG payments
 By the 14th of August, you should have received a PAYG withholding payment summary
statement from us.

PAYG income tax instalment

Instalments (PAYG) are a method of making periodical payments towards your annual income tax
liability. Unless you make more than a particular amount of company and/or investment income, you
must still file an annual tax return if you pay PAYG installments.

If you need to start paying by instalments, we will let you know. When your PAYG instalments are due,
we will send you either an activity statement or an instalment notice, depending on the circumstances.

If you have a myGov account linked to the ATO, you can view, lodge, pay, vary, and manage all of your
PAYG instalment obligations online as an individual.

Payroll tax obligation

If you are an employer, you may be subject to payroll tax, which is a tax imposed by the state and
territory on the salaries you pay your employees. It's based on the monthly salary you pay and is due in
the state or territory where the services were rendered in Australia.

Payroll tax is levied on the following wages:

 Wages for employees

 Payments to contractors
 compensation of directors
 Superannuation
 Allowances
 Payouts on the side
 Bonuses and commissions
 Termination payments

There will not be a payroll tax obligation for all enterprises. You only have to pay it if your taxable wages
(or group wages) surpass your state's or territory's tax level. Each state or territory has its own tax
threshold and registration requirements. It's critical to understand your state's or territory's payroll tax
threshold, as well as whether or not your taxable wages are nearing or above it, as you may be required
to register for payroll tax. Payroll tax is usually filed and paid to state and territory Revenue Offices on a
monthly basis. There are a number of payroll tax exemptions available to employers. Check with your
local Revenue Department to see if your company is eligible for a tax break.

Superannuation benefits and obligations to comply with the law in terms of payment frequency, fund
selection, and employee reporting.

Super is money you give to your employees to help them save for their retirement.

In most cases, if you pay an employee $450 or more in a calendar month before taxes, you must pay
super on top of their earnings.

 the SG is currently 9.5 percent of an employee's ordinary time earnings;

 you must pay it at least four times per year, by the quarterly due dates;
 you must pay and report super electronically in a standard format, ensuring you meet Super
Stream requirements;
 and your super payments must go to a complying fund – most employees can choose their own
fund;
 if you don't pay it on time, you may be required to pay it later.