Compliance activities and penalties for payroll tax

We conduct compliance activities to ensure employers meet their payroll tax obligations.

If we direct you to complete a compliance activity, you must:

• provide information and documents requested by the due date in our correspondence
• contact us before the due date in writing, if requesting an extension of time.

During a compliance activity, you have the right to:

• involve your professional adviser in the matter (e.g. your accountant or solicitor)
• expect professional and courteous conduct from the QRO officer
• expect questions to be clear and unambiguous
• be consulted about the time, date and place of a site visit
• obtain a receipt for any records removed by QRO officers for inspection outside your office
• see the QRO officer’s authority and the legislative provisions under which they are conducting the investigation.

Compliance activities

Self-reviews

We may contact you to conduct a self-review where we have information that you:

• have met or are about to meet the criteria for payroll tax registration in Queensland and not registered
• have declared incorrect taxable wages
• are related to 1 or more businesses that exceed the payroll tax threshold and may be grouped
• have incorrectly classified the relationship with your workers (e.g. taxable payments to contractors or if your workers are part of an employment agency relationship).

We may ask you to submit a:

• payroll tax reconciliation schedule to assist reconciling any wage discrepancies
• grouping reconciliation schedule to confirm the designated group employer, group members and their taxable wages
• contractor reconciliation schedule to identify taxable and exempt contractor payments. We may also ask you to provide evidence to support contractor exemptions claimed.

Investigations

We may investigate instead of requiring a self-review. In this case, an authorised QRO officer may request the above schedules, financial statements, wage records or other information.

The Taxation Administration Act 2001 authorises us to investigate and requires you to give us this information (unless it is subject to a valid claim for legal professional privilege). We can also:

• interview people
• access premises
• search for, examine and copy documents or other relevant information.

After the investigation or self-review, we provide a written response that outlines:

• the reasons for any adjustments in taxable wages
• our decision in respect of unpaid tax interest and penalty tax (if applicable)
• your review rights if you disagree with the outcome.

You also have a right to:

• discuss any part of the investigation or self-review with the QRO officer
• expect your payroll tax information to be treated confidentially.

Penalties

Unpaid tax interest (UTI) and penalty tax may apply when payroll tax is not paid on time or was under-assessed.

If we assess or reassess your payroll tax liability as part of an investigation or self-review, we have the discretion to remit penalty tax and UTI.

For more information, see the following public rulings:

• TAA060.1—Remission of unpaid tax interest
• TAA060.2—Penalty tax.

Increases in penalty tax

The penalty tax can increase up to 20% if we believe you have hindered or prevented us from becoming aware of your true tax liability.

Prosecution and the penalty

If a penalty is imposed, you cannot also be prosecuted for a corresponding offence. Because a penalty is an alternative to proceedings for offences, any penalty is remitted in full if proceedings for the offence commence.

Also consider…

• Read about your obligations and how to comply.