By Saumya Biskudanaruppage, Accountant.
Accountant Saumya has put together a helpful summary of recent ATO changes and updates. As always, we are here to guide you through these changes, please contact us if you need more information or clarification on any of these topics.
Electronic invoicing (eInvoicing) is the digital exchange of invoices between suppliers’ and buyers’ software. It will remove the need for businesses to generate paper-based or PDF invoices that must be printed, posted, or emailed and buyers will no longer need to manually enter or scan these into their software.
The Framework Australia has adopted is the Peppol Framework which is an accurate, efficient and secure way to transact with suppliers and buyers.
There are many benefits to be realised when both the supplier and buyer use Peppol eInvoicing such as a reduction in errors, the potential for reduced payment times, and cost and environmental savings by not producing and processing paper invoices. There is more information on eInvoicing and how it can benefit you and your clients here.
Small Business COVID-19 Support
The ATO has a range of tools and services available for small businesses to support them in getting back on track after the effects of COVID-19 and to help small business to grow.
With the JobKeeper and JobSeeker payment schemes now finalised, the ATO has provided leniency on payment methods and dates on super guarantee payments such as: no penalties up to one month within due date for the super guarantee charge statement to be lodged and availability of payment plan options if the super guarantee payment cannot be paid in full.
Businesses with a turnover of less than $500 million are able to accelerate their depreciation deductions on the purchase of certain new depreciable assets. This applies to eligible assets acquired and first used or installed ready for use from 12 March 2020 until 30 June 2021
Visit the ATO’s COVID-19 support page here for more information.
There is also a handy guide on which government support payments are taxable here.
Single Touch Payroll Phase 2
Single Touch Payroll (STP) has been in place since 2018 and is now expanding with Phase 2 (STP 2) to include additional information to reduce the reporting burden for employers. STP 2 is about making it easier for employers to report specific payment details made to employees across different income streams.
Some key changes for STP 2 are:
- The disaggregation of gross earning, where STP 2 will separately itemise the components that make up the gross amount by payment types, such as bonuses and commissions, director fees, paid leave, salary sacrifice, overtime, allowances and more.
- Employers will be able to report on employees’ employment basis and details of when and why employment ends, taking away the need for a separation certificate to be issued to the employee.
- Tax streaming codes are changing. Currently, employee tax treatment information is part of the TFN declaration. Instead, STP 2 will introduce a tax streaming code to indicate PAYG tax scales and other components that apply to the employee to determine how much tax should be withheld. Payroll software providers will be able to implement this in their system for STP reporting, rather than it being a new process for employers.
- STP 2 also means changes to TFN declarations. Currently, employers are required to submit a TFN declaration for new employees and existing employees when their tax situation changes. The next STP phase will incorporate employee tax information, eliminating the need to submit tax file declarations to the ATO as a separate process.
The mandatory start date of STP 2 is set to be on the 1st of January 2022. In supporting the transition from Phase 1 to Phase 2, the ATO has made this flexible and practical based on the individual circumstance or business readiness. If you are using payroll software, you may already have been advised by your software provider on their readiness for STP Phase 2.
You can read more about STP Phase 2 on the ATO website here.
This information is current at the time of publication and further updates may have occurred since that date. Please contact us for the latest information.