The tax office has offered assurances that it will take a facilitative approach in the initial phase of the single touch payroll regime, noting that it will “cop a lot of flak” if it questions every pay-run data it receives.
ATO dodges ‘flak’ with penalties approach to STP
Speaking at MYOB Partner Connect 2018 in Melbourne, ATO STP lead and assistant commissioner John Shepherd said the tax office has received an influx of questions from practitioners and business owners who are worried that their pay practices might be perceived to be incorrect.
“We get a lot of questions or comments saying that [businesses] do this really peculiar thing in our business which when we report to you is going to look dodgy or you’re going to pick it up because it is going to look wrong,” said Mr Shepherd.
“The key message is that we’ve got a lot of learning to do around payroll data. We’ve got to accept as the ATO that this isn’t traditional tax form data — this is a real shift in terms of how we receive this information and we can generate a lot of benefits from it, but if we question every anomaly that comes through and drive a lot of questions back into the business, we will cop a lot of flak and we will become quite onerous.
“If there is one learning point from the UK system, they probably over-engineered their queries back, so we’ve been quite careful and we’re working with industry stakeholders around testing what things we actually question.
“We’re very much on a help and assist focus where we try and settle industry reporting and not overreaching out and questioning stuff all the time, but [we] try and help people get set up and then build confidence around this reporting and a chance for us, as the ATO, to ask how do we use this data in a sensible way because there is great value in getting real-time information, but we do need to recognise what it is and what it isn’t.”
This is in line with what Mr Shepherd previously told Accountants Daily, saying that penalties generally won’t apply in a transition year.
Likewise, MYOB capability consultant Dave Wilson said clients often raised concerns around making mistakes but assured them that there were steps to work around any issues.
“Whether or not you’ve deleted a pay or rerun a payment itself, the year to date figures will naturally balance itself out to give accurate real-time information for both the ATO’s perspective but also from the employer and employee’s perspective,” Mr Wilson said.
You can hear more about the ATO’s approach to STP implementation in Accountants Daily’s podcast with Mr Shepherd.