Management ate my tax return
Tax office: Hmmmm-ok
The Australian Taxation Office has issued guidance to clients of Plutus Payroll, the company accused of AU$165m scam, and says they “will not be penalised” if the company hasn't paid the right amount of tax on their behalf. “As a worker you won’t be penalised if the amount reported as being withheld is not actually paid to the …
ATO says that the contractor won't be penalised, not that they aren't responsible for paying the tax.
IOW - if Plutus deducted the tax from contractor payments for the full year and didn't hand it over to the ATO the contractor will still get a nasty demand for payment at tax time.
That's the way I read it too. Can't imagine the ATO saying "ahhh, that's alright then" and letting you off with them being on the short end of a dollar or two. The taxman is not in the business of risk which is why they sit up the front of the queue when a company goes bankrupt.
That "At tax time, the amounts withheld from your pay will be applied when the income tax liability is assessed" suggests to me that, if Plutus deducted the tax due, but ATO didn't receive the money, they won't be asking the contractor for it.
Of course everyone will have to wait and see, but it seems odd that they wouldn't just come out and say 'you'll have to pay what did not reach us' if that is what they are intending to do.
As to other losses, it does seem those are going to be treated as 'you paid but had the money stolen in transit so that's your problem'.
"suggests to me that, if Plutus deducted the tax due, but ATO didn't receive the money, they won't be asking the contractor for it."
I think I lean towards the other posters. If the tax didn't reach the tax man, the tax will still be assessed and billed to the contractor, but they won't be "penalised", ie not fined for late payment. The contractors can join the queue of creditors to try to claim back tax deductions taken by Plutus but then not passed on to the tax man.
"the new FAQ says. “At tax time, the amounts withheld from your pay will be applied when the income tax liability is assessed.”
It seems to me (IANAL) that they are saying the opposite to the comments above - if tax money was deducted by Plutus, then the ATO is going to treat it as tax that was paid by the contractors. Presumably they will then work on the basis that it subsequently stolen by Plutus from the ATO, which is all to the good as the ATO have much better facilities for getting it back than any individual does.
"Presumably they will then work on the basis that it subsequently stolen by Plutus from the ATO, which is all to the good as the ATO have much better facilities for getting it back than any individual does."
Otherwise there'll be a lot of "as soon as I get it back from Plutus, I'll pay you"-type things, and ATO will definitely be keeping an eye on any precedent-setting here.
IOW "if you paid it (or it was withheld from you) but it didn't get to us, the guy in the middle has the problem, not you" ..... this seems fair, and reasonable .... from a tax office ..... next they'll be saying if you don't get employee rights you are not an employee ...... where are my pills ....
The rules have always been that if your are an employee and you employer deducts tax but fails to pay it on to the tax office, the employee will still get the credits and the ATO will chase the employer. The ATO FAQ simply repeats this.
The employers who paid the gross pay to Plutus as not off the hook. They still owe the tax to the ATO.
Employers are also in a double bind with superannuation contributions. The contributions haven't been paid to the super funds so the employers still have an obligation to make sure they get paid, and because they were not paid on time they are not entitled to a tax deduction for the contribution.
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