Changes your business need to know.
With the world operating at such a fast pace, laws and legislation are trying to keep up, and so do you and your business.
With the world operating at such a fast pace, laws and legislations are trying to keep up and the ATO is no different, with the introduction of many new features and improved functions being made to their online systems for reporting purposes. This is what you need to know to make sure you are ahead and planned for these changes.
- AUSkey to be made redundant
From 1 April 2020, the AUSkey system will be replaced as the reporting tool between businesses and the ATO. This new online services system will be through the use of myGovID and Relationship Authorisation Manager (RAM) instead.
Susan Franks, senior tax advocate at Chartered Accountants Australia and New Zealand (CA ANZ), says, “the ATO says this new process will be a more secure, streamlined and flexible way to report information to the ATO.”
With more than 1.2 billion invoices exchanged in Australia annually, and Australian small businesses collectively owed $26 billion in unpaid invoices at any given time, the ATO believes e-invoicing could be the answer.
The ATO believes with increased efficiency in invoicing, the economy would save an estimated $28 billion over ten years. This year the federal government will begin its e-invoicing framework, committing to pay electronically supplied invoices from small business suppliers within five days, to the value of $1 million, or interest will be applied.
But how does it work? E-invoicing us an automated process to submit and process an invoice in a digital format. E-invoices are received into the business’s financial systems, minimising the risk of fake or compromised invoices due to a direct exchange of invoices between a supplier and a buyer’s computer systems.
Although the ATO reports e-invoicing will not be compulsory for all businesses, it is definitely suggested with cost savings on invoicing processing up to 70% as well as increased cash-flow.
- Single Touch Payroll (STP)
The introduction of STP has been met with some resistance in it’s transparency and guarantee provided that employers are meeting their payroll obligations. However, as the transition to the digital reporting platform is being made penalties will soon start to apply for those who have not adopted the STP in their business.
Small businesses (less than 20 employees) were granted a three-month extension to 30 September 2019 to make the transition, and penalties will be waived until 30 June 2020. However, for larger employers (more than 20 employees), penalties already apply from the beginning of FY 2019-20.
To avoid penalties and make sure you are compliant with all the latest changes please get in touch with your Prime Accountant today, 9415 1511 or email firstname.lastname@example.org.