By Sam Heaney and Tim Jones
Overview of the policy
On 1 March 2021, the Queensland Law Society (QLS) brought into effect the Tax and Superannuation Arrears Policy.
Under this policy, QLS considers failure to comply with taxation and/or superannuation obligations a factor that increases the risk of default and a suitability matter for the principals of a law practice. As such, if a law practice fails to meet its obligations for taxation and/or superannuation they must report this to QLS.
The full QLS policy and notification form can be downloaded here.
Timing
The policy applies to all failures to comply with taxation and/or superannuation obligations by a law practice that are unresolved at or occur after 1 March 2021.
If there have been failures of compliance before 1 March 2021 which have been completely remedied before that date, the policy does not apply. However, if the failures are not completely remedied by 1 March 2021 then the policy will apply to those failures of compliance and reporting to QLS will be required.
Reporting requirement
Each principal of the practice must report the failure to comply, either jointly or separately, in accordance with their requirements to report suitability matters. The failure must be reported before the next application for renewal of a principal’s practicing certificate.
Obligations
Taxation
The taxation obligations which the policy applies to are:
- to lodge business activity statements by the due date applicable to the law practice;
- to pay, by the due date:
- monies owing to the Australian Taxation Office (ATO) in accordance with a business activity statement;
- any penalties, interest or charges assessed by the ATO as payable in relation to business activity statements;
- where a law practice is not required to lodge business activity statements to pay by the due date the amount assessed as owing by the ATO as advised in an Instalment Activity Statement.
Superannuation
The superannuation obligations which the policy applies to are:
- the obligation to pay the superannuation guarantee as required by the Superannuation Guarantee (Administration) Act 1992. That is at the time of publication of this policy 9.5% of employees salary into a designated superannuation fund by the 28th day of each April, July, October and February(we note this will increase to 10% from 1 July 2021); or
- to, as required by the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Charge Act 1992, lodge a superannuation guarantee statement and pay superannuation shortfall (including choice liability), interest chargeable and any administration fee by the 28th day of each May, August, November and February.
Need help?
This new policy from QLS further highlights the need for law firms to stay on top of their compliance matters.
At Vincents, we know that the legal industry is like no other. As professionals operating within it, your individual and business financial needs demand the same high level of precision, timeliness and strategy that you administer each day when dealing with your own matters.
We have been working with lawyers and legal practices for many years, adding value through services like:
- fixed fee packages for lawyers and legal practices;
- bookkeeping and compliance services;
- structuring and taxation advice; including tax planning and business performance management;
- asset protection;
- dedicated training and assistance to chambers assistants; and
- transaction management and legal trust account external examinations.
Our approach to managing your financial affairs is seamless and provides you the flexibility to engage with any or all of our services depending on your circumstances.
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.
