The Australian Taxation Office has issued guidance to clients of Plutus Payroll, the company accused of AU$165m scam, and says they “will not be penalised” if the company hasn't paid the right amount of tax on their behalf.
“As a worker you won’t be penalised if the amount reported as being withheld is not actually paid to the ATO,” the new FAQ says. “At tax time, the amounts withheld from your pay will be applied when the income tax liability is assessed.”
The FAQ also explains that clients will be able to resolve their FY16/17 tax affairs without the annual “payment summary” recording their incomes and income taxes paid by employees. As Plutus' subsidiaries appear to be in the process of being wound up and the company appears to have let go all staff, many clients have told The Register they are worried they will not be issued that document.
In a statement sent to The Register, the Taxation Office said: “We understand that sometimes workers and employers are affected by circumstances outside their control and we are implementing a range of support measures to ensure that you have clarity on your circumstances.”
The FAQ also points out that if Plutus clients have been overpaid they'll need to pay tax on that income.
But clients affected by Plutus' collapse still have plenty to worry about: the FAQ has nothing of substance to say about salary sacrifices, the Medicare levy or student loan repayments, and says the ATO is yet to develop a position for those with complicated tax arrangements impacted by the collapse. The FAQ also advises those out of pocket for wages or other entitlements to contact Fair Work Australia. The Register understands that that body can take weeks or longer to resolve disputes.
A media statement sent to The Register nonetheless says: “We hope this general advice will provide certainty to workers and employers who have used the services of payroll company Plutus Payroll Australia Pty Ltd and associated entities and may be seeking guidance regarding PAYGW status, to ensure their tax obligations are met.”
The Register had sought guidance for Plutus contractors last week from the ATO and Treasury. The former offered only generic advice, the latter relied on the ATO's advice and, when we pressed, suggested we contact the office of the Treasurer. ®