Management Accounting (Case Study 7)

A small business client in the contract cleaning industry was subject to an “Employer Obligations Audit” by the taxation office. In the process of this audit the business was assessed to be liable for superannuation and the superannuation guarantee charge pertaining to the payment made over several years to contractors. The resulting liability of circa $75,000 if required to be paid would have crippled the business.

Axis accounting was engaged by the company to review the information and assist in an objection to this assessment made by the ATO. In the process of the firms review it was discovered that the contractors were not deemed employees and therefore not subject to this assessment.

The firm was able to lodge an objection on behalf of the client and successfully argue to have the assessment overturned resulting in a zero liability owing to the ATO.

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