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Mala14(Superuser)Superuser
19 Mar 2021

Hi,

One of my clients has some salary paid during 2020 FY that didn't go through STP.

Also, she hasn't lodged the Payment Summary Annual Report for those payments with the ATO. (no PAYG Summaries issued for employees either.) (She is a new client for me)

All 4 BASs for 2020 FY should be amended for PAYG Withholding for other reasons. However, now amendments should be made for those payments that didn't go through STP as well.

Client says she doesn't have access to her old payroll system to get information for those payments. The only evidence is her bank account as she says that some payments were not recorded in the Payroll system as the pays have been paid into employee accounts from the bank account.

I have a responsibility to consider all the changes when making amendments. None of her records are reliable and accurate.

I am struggling to finalise her accounts and tax and also BAS amendments.

What is the best way to handle this?

Any suggestions ?

Thanks

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3 replies
1,112 views
3 replies

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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
19 Mar 2021

All 4 BASs for 2020 FY should be amended for PAYG Withholding for other reasons. However, now amendments should be made for those payments that didnt go through STP as well.

Client says she doesnt have access to her old payroll system to get information for those payments. The only evidence is her bank account as she says that some payments were not recorded in the Payroll system as the pays have been paid into employee accounts from the bank account.

I have a responsibility to consider all the changes when making amendments. None of her records are reliable and accurate. I am struggling to finalise her accounts and tax and also BAS amendments.

Depends how much other work you have - does not sound like an ideal client to me.

Client says she doesnt have access to her old payroll system to get information for those payments.

Client's responsibility to give you the correct information - this just sounds suspicious.

What is the best way to handle this? Any suggestions ?

If you really want to do this, you should consider these steps:

1. Give an cost estimate, and get some $ up front - and make it clear that you are only going to do this if she is prepared do it all properly from now on.

2. Most important issue is to establish correct amounts for employees - work up from net pay if necessary.

3. Enroll client for STP

4. Get their payment summaries issued for 2019-20 + ATO rec. - or do by entering annual totals into STP (my preference)

5. Correct BAS W1 + W2 to match actuals

6. Then see what you can do with accounting records - making due enquiry as required by TPB.

7. Explain to client that tax would be less if she had kept proper records.

Care required - you could end up spending a lot of time on this, and then not get paid.

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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
19 Mar 2021

All 4 BASs for 2020 FY should be amended for PAYG Withholding for other reasons. However, now amendments should be made for those payments that didnt go through STP as well.

Client says she doesnt have access to her old payroll system to get information for those payments. The only evidence is her bank account as she says that some payments were not recorded in the Payroll system as the pays have been paid into employee accounts from the bank account.

I have a responsibility to consider all the changes when making amendments. None of her records are reliable and accurate. I am struggling to finalise her accounts and tax and also BAS amendments.

Depends how much other work you have - does not sound like an ideal client to me.

Client says she doesnt have access to her old payroll system to get information for those payments.

Client's responsibility to give you the correct information - this just sounds suspicious.

What is the best way to handle this? Any suggestions ?

If you really want to do this, you should consider these steps:

1. Give an cost estimate, and get some $ up front - and make it clear that you are only going to do this if she is prepared do it all properly from now on.

2. Most important issue is to establish correct amounts for employees - work up from net pay if necessary.

3. Enroll client for STP

4. Get their payment summaries issued for 2019-20 + ATO rec. - or do by entering annual totals into STP (my preference)

5. Correct BAS W1 + W2 to match actuals

6. Then see what you can do with accounting records - making due enquiry as required by TPB.

7. Explain to client that tax would be less if she had kept proper records.

Care required - you could end up spending a lot of time on this, and then not get paid.

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Liked by Mala14
Mala14(Superuser)Superuser
19 Mar 2021

Thank you so much.

Shes enrolled for STP, as she said only some payments havent gone through STP.

As a result, there is a variance between the STP Report and the actual payments. According to her, the payroll system doesnt have all the records.

Client says she doesnt have access to her old payroll system to get information for those payments. The only evidence is her bank account as she says that some payments were not recorded in the Payroll system as the pays have been paid into employee accounts from the bank account.

So, I have no way to work out whether they are actually salary, or how much the total salary is. (No payment Summaries) The only reliable information is the STP Report and the BASs could be amended according to that.

She wont be able to claim a deduction for the variance as she cannot provide any evidence.

I understand that its her responsibility to provide reliable information, however what will be my responsibility if I continue with the numbers on the STP Report.

Thanks again.

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