ATO lines up ‘nudges’ in the wake of STP deadline.

With Single Touch Payroll reporting now in force for all employers, the ATO has outlined how it will seek to promote compliance from 1 October 2019.

As a Bas & Tax Agent, the ATO has been in correspondence with us at Highview regarding our clients that have yet to begin reporting through Single Touch Payroll. The ATO has advised that they will soon move to directly contact employers to ensure compliance.

STP is now in force for businesses of all sizes, with 460,000 businesses now reporting, and just over 40,000 covered by a deferral, exemption or concessional reporting arrangement.

According to the latest figures from the Tax Office, 383,000 small businesses are now reporting through STP, out of the estimated 750,000 small business population. Employers with five to 19 employees were more likely to be reporting through STP, with 66 per cent compliant, compared to micro businesses with only 43 per cent compliant as of 27 September.

Substantial employers, or those with 20 or more employers, were required to begin STP reporting since 1 July 2018, and have achieved a 97 per cent compliance rate as of 27 September. Despite the passing of the 30 September deadline, there will be no penalties for mistakes, missed or late reports for the 2019–20 financial year for small businesses, as the ATO adopts a facilitative approach in implementing the new law change.

Speaking to Accountants Daily, ATO assistant commissioner Jason Lucchese reaffirmed the agency’s approach to helping employers transition to STP through “nudge correspondence”.

“The ATO recognises that 2019–20 is a transition year, and for employers that start reporting during that financial year, there will be no penalties applied for any late reports or mistakes in their reporting,” Mr Lucchese said.

“Our real immediate focus is to educate and help small employers to transition into STP and we’ll begin to make contact with those that are not reporting.”

From mid-October, the ATO will reach out to tax and BAS agents through email with a full client list documenting the STP status of their clients.

The Tax Office will then begin contacting employers directly, with further nudges set to follow from February to May 2020.

The full penalty regime for small businesses will then come into effect from 1 July 2020.

While the reporting deadline has now passed, Mr Lucchese said the ATO will still accept applications for deferrals, exemptions or concessional reporting. “It is not too late for employers who are still making their way through that transition,” Mr Lucchese said.

“We recognise that making the change will be different depending on each employer’s circumstances, which is why we are taking a supportive and flexible approach to assist small employers in that transition.

“Small employers still have those three pathway options available to them.”

If you are a Highview client that needs assistance with your STP transition, please don’t hesitate to contact your local office – we are here to help!

Cranbourne – 03 5990 1000
Prahran – 03 9529 1566
Mornington – 03 5911 2100
Ringwood – 03 8899 9797

Article written by Jotham Lian for Accountants Daily October 2019.