NSW Announces Tougher Penalties for Payroll Tax Avoidance
The NSW Government has announced that it will introduce new legislation to increase penalties for payroll tax avoidance, as well as providing it with the ability to name taxpayers who have underpaid payroll tax on wages.
The changes are directed at those employers who underpay wages, which of course reduces the employers’ payroll tax liabilities, but also deprives workers of their due wages. Modelling suggests that this amounts to $1.35 billion in wages per year Australia-wide, and affects some 13% of workers.
Revenue NSW will be able to reassess payroll tax more than five years after the initial tax assessment when wages have been underpaid.
The penalties will be increased five-fold in some instances (as set out in the following table). For example, penalties for making records known to contain false or misleading information and for knowingly give false or misleading information are both up from $11,000 to $55,000.
| Offence | Current penalty | New penalty |
| Fail to keep records needed to determine tax liability or to be produced to Revenue NSW as requested, including failure to keep records in English and for the minimum five years | 100 penalty units ($11,000) | 250 penalty units ($27,500) |
| Make or include records known to contain false or misleading information | 100 penalty units ($11,000) | 500 penalty units ($55,000) or, if the offender has previously committed the same offence, 1,000 penalty units ($110,000) |
| Wilfully damage or destroy records | 100 penalty units ($11,000) | 500 penalty units ($55,000) |
| Knowingly give false or misleading information | 100 penalty units ($11,000) | 500 penalty units ($55,000) or, if the offender has previously committed the same offence, 1,000 penalty units ($110,000) or imprisonment of up to two years (or both) |
| Fail or refuse to lodge a document, statement or return as required | 100 penalty units ($11,000) | 250 penalty units ($27,500) |
| Falsify or conceal the identity or location of a taxpayer or another person | 100 penalty units ($11,000) | 500 penalty units ($55,000) |
Important: Clients should not act solely on the basis of the material contained here. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We, therefore, recommend that our formal advice be sought before acting in any of the areas.
