Extension of the Taxable Payments Reporting System
The Australian Taxation Office currently requires businesses in the building and construction industries to report the total payments they make to each contractor for building and construction services each year.
This is due to the long-running issues with these industries and the issue of on "a Friday they are an employee but an independent contractor on Monday" and the significant leakage of GST and income tax revenue through the tax system from people who prima facie are considered to be employees in all but name.
As the economy is growing and changing, many businesses are feeling cost pressures and in some cases allegedly pushing the boundaries of what is "legal" in order to reduce costs and liabilities.
In this month's Federal Budget the government announced the extension of the "Taxable Payments Reporting System" to contractors in the courier and cleaning industries because of recommendations from the "Black Economy Task Force". The government indicated that there is a belief from the Australian Taxation Office that some businesses operating in these industries have become a source of revenue leakage of GST and income tax revenue.
It will be interesting to see how far the government plans to extend the "Taxable Payments Reporting System" in the future and how effective the reporting system is in collecting GST and income tax.
The other area that will be closely watched is the "data matching and cross sharing of information" between the Australian Taxation Office and the State/Territory based authorities to check if the correct information is being reported as part of Workers' Compensation Payroll Declarations.
Another concern for State/Territory authorities relates to whether payroll tax is being correctly calculated based on businesses' payrolls.
Capability Statements Are an Important Document
Many businesses are finding that when tendering for new work or having discussions with a new customer they are being asked to submit a "Capability Statement."
Why are Capability Statements important?
A Capability Statement is a business document or record of individual and organisational competencies, achievements, associations and accreditations. The purpose of a Capability Statement is to communicate clearly and effectively to potential partners, stakeholders, suppliers, customers and even employees about a business and its capabilities.
A Capability Statement is an essential document for organisations looking to secure "supply chain opportunities" and for subcontract work as it provides procurement staff in government or private organisations with key specific information about an organisation that will assist the procurement staff to make a decision on whether they should grant a contract to a particular business.
A well written Capability Statement will help a business differentiate itself from its competitors, helping to reinforce a business' track record, capabilities and value proposition in the minds of existing and potential new customers.
Government Proposing That Proprietary Companies Will Be Able to Participate in Crowd-Sourced Funding
The Australian government has released an "exposure draft" which would enable "Proprietary Companies" to participate in Crowd-Sourced Funding.
The Crowd- Sourced Funding Legislation which enables Proprietary Companies to be converted to Unlisted Public Companies goes live on 29th September 2017.
If the legislation proposed in the "exposure draft" is passed by the Parliament that legislation would operate from six months after the legislation receives royal assent. This would mean that the commencement date for Proprietary Companies being able to utilise Crowd-Sourced Funding for capital raising without having to convert to an Unlisted Public Company would be in March/April 2018 at the earliest
Key items contained in the "exposure draft":
- Proprietary Companies which wish to participate in Crowd-Sourced Funding would be known as "CSF Proprietary Companies";
- CSF Proprietary Companies would require a minimum of two directors;
- Auditors will be required to be appointed if the CSF Proprietary Company has raised in excess of $1 million;
- CSF Proprietary Companies will be able to exceed the 50 shareholders cap;
- There will be additional reporting obligations for CSF Proprietary Companies;
- The requirements for Crowd-Sourced Funding Companies relating to:
- maximum capital raise in a 12 month period of $5 million
- maximum investment that a retail investor can make of $10,000 in a 12 month period per company
- retail investor protection
- intermediaries acting as the "gatekeepers" for the legislation
- group sales to be under $25 million per annum
- the value of group assets to be under $25 million
The Crowd-Sourced Funding Legislation applies to companies operating in any type of business.
Temporary Skill Shortage Visa Introduced
The government has announced that the "457 Visa" would be abolished and replaced with a completely new "Temporary Skill Shortage (TSS) Visa" which the government has said will support businesses in addressing genuine skill shortages. We will give you more details on the TSS Visa next month.
Change of Details
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