Workplace RelationsEmployers win improved Pay-roll tax amnesty
After intense lobbying from Master Builders, the Treasurer and the Office of State Revenue have agreed to extend a penalty amnesty for employers who have incorrectly excluded payments to contractors who are employees at common law in their taxable wages for pay-roll tax purposes from 2004 to 2008.New pay-roll tax changes 1 July 2008
The Queensland Government recently amended the pay-roll tax system to include "contractor provisions" which has the potential to create a new tax burden on thousands of contractors in the industry. The changes have been designed to capture all payments to contractors, subject to a range of exemptions intended to exclude genuine independent contractors. The new contractor provisions identify 'relevant contracts' that are included for the purposes of calculating and the payment of pay-roll tax.
- Fact Sheet 1 - Overview
- Fact Sheet 2 - Taxable Wages
- Fact Sheet 3 - Threshold & Calculations
- Fact Sheet 4 - Relevant Contracts
- Fact Sheet 5 - Exempt Contracts (new)
- Consumer to lobby Pay-roll Tax changes Letter
New subcontractor statement for pay-roll tax records
The Queensland Government amended the pay-roll tax legislation to include "contractor provisions" which have been designed to capture all payments to contractors, subject to a range of exemptions intended to exclude genuine independent contractors.
Master Builders has developed this new 'subcontractor statement' for a principal or taxpayer to request information from the subcontractor to assist the principal/taxpayer identify and assess their tax obligation under the contractor provisions. The information may also assist the principal/taxpayer to record information or facts to be relied upon in making their self determination regarding their tax obligations associated to the payments by the principal/taxpayer to the contractor.
A company will most likely be affected by these changes if they regularly engage 8-12 individuals on labour-only or majority labour-only contracts on hourly, daily or meterage rates. Under certain circumstances, payments to contractors will be taxable as a 'relevant contract'.
Download the subcontractor statement form here.
Need more information or advice?
Call Master Builders Workplace Relations Team on (07) 3225 6407; or call the Office of State Revenue Client Service Centre on 1300 300 734; Visit www.osr.qld.gov.au
Independent Payroll Tax Report
Master Builders has commissioned Reed Construction Data to produce a special report into the effect of proposed changes to pay-roll tax legislation.
Click here to download the report.
Pay-roll Tax Industry Educational program
Master Builders educational program, supported by the OSR, included Master Builders writing to over 66,000 industry participants alerting them to the changes, developing the above five factsheets to explain the legislative changes and conducting some 15 free industry briefings across the State attended by over 700 industry participants.
View industry briefing presentation here.
Periodic returns - during the financial year
Employers must work out and pay their pay-roll tax periodically during the year.
Most employers must pay pay-roll tax monthly, by the 7th day after the end of each month. If the Commissioner of State Revenue (the Commissioner) approves a different period for an employer (e.g. quarterly or six monthly), payment is due within 7 days after the end of each period.
For employers who make their periodic payments electronically (by BPAY or electronic funds transfer), no paperwork is required throughout the year.
The electronic payment is treated as the periodic return. The payment reference number changes for each periodic return and can be obtained via the online 'Assessment Information Screen' which is available on OSR's website.
If the payment is not made electronically (i.e cheque or cash), the employer is required to manually lodge their periodic return and attach the relevant payment slip with their payment. To obtain a booklet of periodic returns, the employer will need to contact OSR on 1300 300 734 or email payrolltax@osr.treasury.qld.gov.au to request a booklet to be sent.
Annual returns - at the end of the financial year
At the end of each financial year, employers need to provide a breakdown of their annual wages in an annual return. They also need to work out whether they have paid the correct amount of pay-roll tax for the financial year, and pay any tax shortfall when they lodge their annual return. If the employer is entitled to a refund, OSR will process the refund on receipt of the annual return subject to there being no other outstanding tax.
Annual returns must be lodged by 21 July after the end of each financial year. Employers can save time and paperwork by lodging their annual return on-line at OSR's website. In June each year, OSR sends all registered employers a new password to access their annual return. Employers who do not have internet access should contact OSR by 1 July to request a paper annual return.
Cash flow relief for large member affected by the new Pay-Roll Tax changes
Master Builders can assist numbers in obtaining relief in regards to penalty tax and unpaid tax interest under the Office Of State Revenue's Practice Direction 9.1. Improving cash flow by allowing members to delay payment of the new tax obligation until December 2008.