New laws passed by parliament last month directly target the behaviour of taxpayers that don’t meet their obligations.
From 1 July 2019, if taxpayers do not meet their PAYG withholding tax obligations for the following payments, they will not be able to claim a tax deduction:
- salary, wages, commissions, bonuses or allowances to an employee;
- directors’ fees;
- labour hire arrangements; or
- services where the supplier does not provide their ABN.
Exception: Where a mistake is made and voluntarily corrected.
For example, if you made payments to a contractor but then later realised that they should have been paid as an employee and no PAYG was withheld. In these circumstances, a deduction may still be available if you voluntarily correct the problem. Penalties may still apply, however.