Reminder: Single touch payroll starts 1 July 2018
As mentioned in previous Top Tax Tips, from 1 July 2018, the Single Touch Payroll (STP) system will be compulsory for all employers (that have 20 or more employees at 1 April 2018) to report payments such as salaries and wages, pay as you go (PAYG) withholding tax and superannuation contributions directly to the ATO at the same time they pay their employees.
Employers will no longer be required to prepare payment summaries to individuals or a payment summary annual report to the ATO.
Nexia has been in regular discussions with the ATO about the new STP system. Once the ATO releases information on how the ATO intends to administer the STP system, we will quickly release practical recommendations to assist employers to be STP ready by 1 July 2018.
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 transition to STP (i.e. to assist you to align the reporting of PAYG and superannuation contributions to the payroll process) as well as determine whether your payroll solution is STP-enabled (by following appropriate guidance once released).
Digital changes coming to the small business superannuation clearing house
From 26 February 2018, the Small Business Superannuation Clearing House (SBSCH) will operate on a new ATO digital platform that will enable users of the SBSCH to access the portal with a single new logon.
Because of the transition to a new digital platform - there will be no access to the SBSCH from Tuesday 20 February to Sunday 25 February to allow data to be transferred between the old and the new system - we would advise employers to make their super guarantee payments before the close of business Monday 19 February 2018 to prevent any confusion.
Please contact your Nexia adviser for more information on how to access the new look SBSCH from Monday 26 February 2018.
Potential tips to avoid attracting ATO attention
Although we cannot give taxpayers an exact checklist of what to do to avoid an ATO tax audit for possible under-reporting of income, the following broad principles / tips can be incorporated into a risk management plan of a business to assist in limiting potential exposure:
- Ensure all business takings are deposited into a business bank account (i.e. do not make such deposits into a taxpayer’s personal bank account where business and private funds can be mixed);
- Keep good records to keep track of income and expenses (e.g. by keeping good records, taxpayers would be able to substantiate income and expenses declared in their tax return) as well as trading stock used for private purposes; and
Ensure a taxpayer’s business is performing within the ATO’s small business benchmarks (e.g. if a taxpayer’s business performance indicators deviate from these small business benchmarks that were developed from comparing data from similar businesses in the same industry, an ATO audit/review may be more likely than not). Undoubtedly, the best defence with the ATO is to have comprehensive records.
Because we would like to avoid any unnecessary stress, pressures and costs caused by an ATO audit of your business affairs, we can help your business adopt “best practices” methods to limit your risk of being subject to an ATO audit.