Strengthening the Australian Business Number (ABN) system
From 1 July 2021, ABN holders with an income tax return obligation must lodge their income tax returns.
In addition, from 1 July 2022, ABN holders will be required to confirm the accuracy of their details on the Australian Business Register annually.
Failing to meet these obligations will result in the ABN holder being stripped of their ABN, meaning payments made to them for the provision of goods or services will require payers to retain ABN withholding tax at the top marginal tax rate, including Medicare levy.
Targeting sham contracting
A dedicated sham contracting unit within the office of the Fair Work Ombudsman will be established to attack sham contracting behaviour engaged in by employers. Businesses knowingly or recklessly misrepresenting employment relationships as independent contracts to avoid statutory obligations and employment entitlements are to be especially targeted.
The sham contracting unit will tackle sham contracting by increasing education, compliance and enforcement activities, and dedicating additional resources to investigate and litigate cases.
Sham contracting results in workers losing access to basic workplace relations protections, including minimum or award wages, and employers avoiding PAYG withholding and payroll tax obligations, workers’ compensation premiums and superannuation contributions.