Non deductions if PAYG obligations not up to date

Following the passage of the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018, the ATO is reminding businesses that from 1 July 2019 deductions can no longer be claimed for certain payments that do not comply with pay as you go (PAYG) withholding obligations. In particular, the ATO advises that this includes ‘cash in hand’ payments made to workers.

It should also be noted that in addition to the loss of the tax deduction, employers caught not complying with their PAYG withholding obligations may be penalised for failing to withhold and report amounts under the PAYG withholding system.

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