Single Touch Payroll (STP) became mandatory last week for all small businesses with 19 employees or less. Yet according to the Australian Tax Office (ATO) many businesses have yet to adopt the compulsory technology or inform the ATO that they need more time to make the switch.
Chartered Accountants Australia and New Zealand (CA ANZ) are encouraging businesses yet to make the switch to get in touch with the ATO, ASAP.
STP requires employers to electronically send payroll information including wages, salary payments and superannuation to the ATO at the same time as they make their pay run. Making the switch is simple for businesses already using cloud accounting solutions.
“According to the ATO, almost 400,000 small businesses have signed up to STP and around 100,000 have applied for quarterly reporting, been granted additional time to start reporting or are covered by the one-year extension for closely held employees. Given there are around 750,000 small businesses in Australia that employ people, many are yet to make the move,” said CA ANZ Tax Leader Michael Croker.
“Small business employers who haven’t signed up for STP, or have not obtained a deferral or concession, can expect to be contacted by the ATO. The ATO won’t just go from nice guy to tough guy, but the dial will move in a way that triggers more direct engagement,” Croker warned.
Croker suggested businesses who fail to make the switch could face scrutiny from the ATO.
“There is power in the legislation to penalise businesses who don’t make the switch which the ATO can use but currently the ATO is identifying and working with businesses to help them adopt STP.”
Croker said the purpose of STP is to create a more transparent environment where those employers who aren’t meeting their obligations can be identified and dealt with.
“This scheme gives the ATO access to businesses real-time payments, meaning any underpaid entitlements, such as superannuation, will be identified. Business who haven’t been meeting their employer payroll responsibilities can be identified and should expect to be contacted by the ATO.”
For more information on how to set up STP for your business visit the ATO website: https://www.ato.gov.au/Business/Single-Touch-Payroll/