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ATO delays superannuation changes

ATO won't impose new superannuation obligations next month but uncertainty remains as to when the changes will take effect

By Brad Gardner

The Australian Taxation Office will not impose new superannuation obligations next month but there is still uncertainty as to when the changes will take effect.

In a letter to industry stakeholders, ATO Assistant Commissioner Robyn Bruce has acceded to industry requests to defer the introduction of the 9 percent superannuation obligation on “regular, normal, customary or usual” overtime earnings.

The tax office originally planned on introducing the scheme for the trucking industry on April 1 but eventually decided “it would not be appropriate for the trucking industry to be required to change its practices from 1 April, 2009”.

Industry groups NatRoad and the South Australian Road Transport Association (SARTA) called for the scheme to be delayed to at least July 1, which would be in line with other industries.

Although trucking businesses have been granted a reprieve, attention now turns to when the tax office will follow through on the changes, with Bruce remaining vague on an implementation date.

“We will write again as soon as we have finalised our position and advise its effect on your industry. I apologise for the inconvenience which has been caused,” Bruce writes.

Businesses are expected to suffer a massive increase in superannuation costs “due to the common incidence of overtime work for yard staff”, according to consultancy firm Meyrick and Associates.

“In dollar terms, a large operator with hundreds of employees could incur a $780,000 increase in its total employment cost, though this amount will vary a great deal between firms,” the firm says.

Operators liable under the new scheme will also be hit with higher payroll taxes and insurance premiums, which the Australian Road Transport Industrial Organisation (ARTIO) estimates will increase by as much as 6 percent.

It says the ATO’s ruling may add an extra five percent to an operator’s annual transport bill.

The ARTIO criticised the ATO’s decision to link superannuation to overtime work, saying determining what constitutes ‘regular’ is subjective and hard for a company to abide by.

“Determining when a driver’s additional hours become sufficiently ‘regular, normal, customary or usual’ could only be made in hindsight and only after the due date for contributions had passed,” the organisation says.

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