The ATO will grant a buffer period of three months for small businesses to comply with the newly legislated extension of single touch payroll regime to all businesses.
STP for small biz gets 3-month buffer
ATO Commissioner Chris Jordan has given his “personal guarantee” that the agency will adopt a flexible and reasonable approach in dealing with the transition to STP for employers with 19 or less employees.
Recognising the limited time left to the start date of 1 July 2019, small businesses will be allowed to start reporting any time between 1 July and 30 September 2019.
While the official start date will not change, the 30 September deadline has been chosen to give employers more time to make the transition to real-time digital reporting.
Further, any small employer who requests additional time to start STP reporting will be granted a deferral, with exemptions for employers experiencing hardship, or are in areas with intermittent or no internet connection.
There will also be no penalties for mistakes, missed or late reports for the first year.
“We understand that many small businesses and other small employers do not currently use commercial payroll software and they will not be required to purchase such software to report under STP,” said Mr Jordan.
“I want to reassure small [businesses] and give my personal guarantee that our approach to extending single touch payroll will be flexible, reasonable and pragmatic.”
There will be further concessions to the micro-business space, categorised as those with one to four employees, as they make up 60 per cent of approximately 750,000 employers in the small business population.
As such, micro-employers will be allowed to rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run.
Low and no-cost products
The Tax Office is set to release a detailed register of single touch payroll products for the micro-business space next month, including several no cost options.
A list of suppliers looking to offer a product for the micro-business space has been published, but it does not contain details on the price or type of product on offer.
Speaking to Accountants Daily, ATO assistant commissioner John Shepherd said that while the agency was still working with providers and could not provide more details on the products, there would be some offerings that will be made available at no cost.
“As we are working through the review process with the low cost solution providers and some of their solutions and pricing is still commercial in confidence, we have agreed not to share this information publicly until the next version of the register is published in early March,” said Mr Shepherd.
“Pleasingly, we understand some products will be made available at no cost, including some that are already available in the market.”