We’ve spoken a lot this year about business stimulus programs, JobKeeper, support for employers and ways of adapting your business for the future. But I’d like to talk about superannuation this week, and specifically an important deadline that is fast approaching for small business: the government amnesty on superannuation underpayments.
The government has clearly recognised that business owners have a lot on their plate and things can slip through the cracks, one of which could be neglected superannuation responsibilities, and they have opened up this amnesty for businesses to go over their books and make things right without any punishment from the tax office.
That means if you haven’t already, it is time to ensure that you are up to date with your super payments to your employees by September 7, 2020.
If you are found to be in breach of your super responsibilities after this date the punishment will be significant fines as well as an audit, which will clearly affect the productivity of your business at a time when every hour is vital for income.
Payments made before the deadline will be tax deductible, and there are opportunities for payment plans if you don’t have the full amount on hand.
But it is crucial that you inspect your books closely and make sure this amnesty does not pass you by, especially if you have been accessing JobKeeper as that will be looked on very unfavourably by the tax office.
We all know how hard this year has been for small business owners, and the last thing that any business needs right now is a loss of income from an unnecessary fine as well as time out of your business on an audit.
One last word on super and that is the planned increase in super contributions that will eventually see the rate of super paid to employees rise from 9.5 per cent to 12 per cent by 2025.
I believe that there needs to be some tweaks to the legislation to allow businesses smaller than 20 employees to make this negotiable with their employees, largely to reflect the current financial strain already on these businesses.
The business owners I have spoken to lately would much rather be putting money into the pay packets of their workers instead of their super funds, so I think there needs to be a bit of a cushion for small businesses in the current climate, instead of treating all businesses the same.
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