Almost time for Single touch payroll (STP)
As reported in various previous top tax tips and our Tax Update, single touch payroll (STP) is due to start on 1 July 2018 for businesses that employs 20 or more employees as measured on 1 April 2018. Under the STP system, employees’ salaries and wages, PAYG withholding and superannuation information will be automatically reported to the ATO through the employer’s payroll software.
However, businesses involved in seasonal activities such as harvesting that only employs 20 or more employees for a short time in the year (that incidentally includes 1 April 2018), can be exempted from STP reporting if the seasonal employer:
- had fewer than 20 employees for 10 of the previous 12 months;
- will have fewer than 20 employees for 10 of the upcoming 12 months; and
- is not part of a wholly-owned group (e.g. if one of the companies is owned 100% by another company).
Please talk to us (especially if you are likely to have 20 or more employees at 1 April 2018) so that we can assist you to choose a payroll service provider that is STP enabled to ensure your payroll software is STP compliant by 1 July 2018.
Proposal to only audit SMSFs every 3 years instead of yearly
As mentioned in our recent 'Guide to the Federal Budget 2018', from 1 July 2019, SMSFs with a good history of record-keeping and compliance (e.g. SMSFs that have three consecutive years of clear audit reports and have lodged their annual returns on time) will only have to be audited once every three years (i.e. audit 36 months of financial records and compliance with superannuation laws once every 3 years) instead of once every year.
According to the budget proposal, such a switch from a yearly to a three yearly audit requirement will reduce red tape for such SMSF trustees.
However, from a practical perspective, it is uncertain whether this proposed change may lead to cost savings. There may be small cost savings because only one audit report will be required on a three yearly basis, but on the other hand there may be no reduction in audit work involved over the three years (i.e. an auditor will need to review the same number of transactions over the three years).
At the time of writing, the only publicly available official information on this measure is the Federal Budget. Draft legislation is expected in the second half of 2018 and we trust once such legislation is released there will be more details available on how these proposed measures may work.
Nexia Australia will keep you updated on relevant official developments pertaining to this proposal affecting taxpayers that have SMSFs (i.e. currently any information you may have seen regarding this new proposal is purely speculation and not based on official publicly available information released by the Government).
