From July 1, 2018 the new Single Touch Payroll (STP) system will officially launch, representing a leap forward into the digital era while attempting to simplify tax reporting obligations for Australian businesses.
It’s been a long time coming, with the ATO first announcing plans to digitise tax and superannuation reporting way back in 2014.
At first, the new system will only be available to organisations with 20 staff or more (counted from April 1 this year). It requires those organisations to report payment information each time they pay employees, by integrating their payroll software with the ATO’s system.
This will allow statements such as Pay As You Go (PAYG), superannuation and individual group certificates to be “pre-filled”, automating almost everything online and doing away with the need for the old paper-based system.
If the legislation passes in parliament, all businesses will need to use STP from July 1, 2019.
Rhys Kyburz, Director of Business Advisory at RSM in Canberra, explains what this means for individuals and the future of group certificates.
“For years, tax returns have been available through the ATO’s online system. The change essentially allows the ATO to add more information so they can do more “pre-filling” of your tax return. Dividends, interest, other income, PAYG, Medicare details – it’s all being added automatically.
“It will undoubtedly affect those who try to hide information from the ATO, as the new digital processes make it much easier to verify data against various sources to ensure it is correct.”
Rhys adds that pre-filling has been around for decades, but Australia is still catching up compared to some countries where tax payers are presented with an all-but-finalised tax return that they simply click to submit.
“Pre-filled tax returns are a great step towards a digital and paperless future, and leveraging technology to streamline reporting practices. However, it doesn’t mean you should take what you see at face value.
“The role of your accountant is not that of a bean counter. It should be more of an advisor, helping you meet your obligations while claiming what is rightfully yours. If you receive your pre-filled tax return, go through it with your accountant to ensure that you have declared all of your income, the pre-filled figures are accurate, and you are claiming all of your deductions.
“STP is a big change, but is likely only one of many changes that will continue to occur over the next 5 years as the ATO follows through on its plans for digital transformation.”
To learn more about how STP works, see Single Touch Payroll.
To chat with Rhys about your obligations under the new system, or how STP might affect you, call 6217 0300 or visit RSM Australia.
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