Tax

ATO outlines new digital approach as it takes tax digital

Matthew Elmas /

Chris Jordan Australian Taxation Office

Australian Taxation Office Commissioner Chris Jordan appears before the Senate Inquiry into corporate tax avoidance. Source: AAP Image/Mick Tsikas

The tax office will be stepping up its efforts to get with the times next year, outlining a new approach to product and service providers which will prioritise digital engagement.

Australian Taxation Office (ATO) chief information officer Ramez Katf says a new e-commerce platform will be developed to support the next stage of online super and single-touch-payroll (STP) reporting.

It follows record levels of engagement with the ATO’s existing e-commerce portals this year, with six times more transactions being done online than 12 months ago.

“Australians expect online services to be available 24/7, as well as being easy-to-use and intuitive,” Keft said in a statement published on Wednesday.

“We are committed to providing a contemporary, reliable and secure digital experience for all our users – from those who interact with us multiple times a day, to those who only interact with us once a year.”

However, while the ATO spruiks its strengthening digital credentials, there is still concern micro businesses will find it difficult to comply with STP reporting

Legislation before parliament, which is expected to pass, will require companies with less than 19 employees to adopt STP from 1 July 2019.

Single-touch reporting is already a requirement for businesses with more than 19 workers.

An estimated 730,000 new businesses will need to be added to the regime, expanding it by more than tenfold from the about 45,000 businesses currently using STP.

There is a concern many micro-businesses that aren’t using digital payroll software or don’t have reliable internet access could be shafted by the changes.

ATO Commissioner Chris Jordan has said micro employers with four workers or less won’t be forced to purchase payroll software to comply with future STP requirements, although accountants SmartCompany has spoken to say it would be cumbersome to comply with STP manually.

“You’ve got is that there’s a high percentage of businesses doing things fairly manually,” Perigee Advisers’ Lisa Greig has told SmartCompany.

When SmartCompany spoke to ATO assistant commissioner John Shepherd in October, he said the ATO was undertaking consultation with providers MYOB and Xero on a possible low-cost solution for micro businesses.

Xero has participated in the EOI campaign but has said its existing product offer can be used by micro-businesses.

In a webinar late last month, ATO commissioner Chris Jordan said micro employers will be able to comply with STP reporting quarterly for the first few years of the scheme to ease the pressure.

He said accountants will be able to help micro businesses with STP compliance through their business activity statements.

“We’re not going to force people to go and put into their business a whole accounting system [or] payroll software,” Jordan said.

“But its part of that digital world also that people do have to realise that everyone is going digital.

“It’s not us forcing people to go digital to get this accounting software and payroll, it’s what’s happening … there will be those local solutions, there will be those apps people will be able to use.”

Jordan also said there will be exemptions for businesses without access to the internet.

“We’re very open to granting deferrals, we’re very open to granting class exemptions for example for those people that don’t yet have an effective internet connection, we can just provide an exemption until that happens,” he said.

The ATO is looking for a digital solution that would be low cost and allow STP reporting to be conducted within 5 minutes.

This article was updated at 9:10 AM AEDT December 6 to include new information provided by Xero.

NOW READ: ATO fraud report: Tax watchdog calls for improved transparency in wake of a police investigation

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Matthew Elmas

Matthew is the news editor at SmartCompany.

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