Small Business Stewardship Group key messages 16 November 2021
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Small Business Stewardship Group key
messages 16 November 2021
https://www.ato.gov.au/General/Consultation/In-detail/Stewardship-groups-
minutes/Small-Business-Stewardship-Group/Small-Business-Stewardship-
Group-key-messages-16-November-2021/
Last modified: 06 Jan 2022
QC 67620
Small Business Stewardship Group key
messages 16 November 2021
Agency updates
ATO
As COVID-19 restrictions ease, the ATO is recommencing reviews and audits with
small businesses. The ATO continues to show empathy and understanding for each
client’s unique circumstances.
The small business income tax gap estimate was refreshed in the ATO Annual
Report 2020–21. The gap is estimated at 12.7% in 2018–19 and is a preliminary
estimate based on a reduced sample size due to the impacts of COVID-19 on the
random enquiry program. The estimate will be calculated from a larger sample size
in 2021–22.
The Treasury Laws Amendment (2021 Measures No. 7) Bill 2021 , requiring
electronic platform operators to provide information on transactions made through
the platform to the ATO, is currently before Parliament. Once passed, the ATO will
work with industry associations to understand impacts and to raise awareness for
impacted businesses.
There has been strong support for director identification (ID) and uptake to date has
exceeded expectations, considering it has been a soft launch.
The ATO recognises the need to raise awareness on exactly who is a director as
many small business owners do not readily identify themselves as such. The ATO
will target small businesses with relevant communications as we move closer to
1 of 9going live (out of public beta) early next year.
Member comments
Observation that some tax gap media messaging appears to be placing ‘blame’
on small business for contributing disproportionately to the aggregate income
tax gap – The ATO stressed its own messaging highlight that a significant
majority of small business willingly pay their tax.
Concern whether the cost of reporting requirements will be passed onto small
business, particularly in the food service industry – The ATO noted there has
been a lot of discussion that data already captured in systems is aligned to the
law intent. The ATO will look at how it obtains data as reasonably as possible
and will work with associations as soon as law is passed. Members are keen
to be involved.
The simplicity of the director ID registration process was noted by several
members.
Will director ID be a central place to update all addresses and will it be listed
as a tax record under online services for agents – The ATO noted that the
address function is still under design.
Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
Matters currently being raised include least-cost routing, payment disputes, and
superannuation guarantee penalty issues.
The Discretionary Mutual Fund (DMF) review interim report was released on
20 October 2021 and has generated a lot of interest. The interim report found that a
DMF may be a suitable way to address the insurance crisis faced by Australia’s
amusement, leisure and recreation sector.
The Small Business Tax Concierge Service continues to provide insights on tax
issues faced by small businesses.
Issues brought to the Alternative Dispute Resolution assistance line include
franchising, leasing, digital service platforms, business exit options, and some
disputes with government over contracting terms. New franchising Alternative
Dispute Resolution mechanisms are available, including group mediation and the
option to go to arbitration under franchising disputes (if parties agree).
A member explained there is some confusion regarding the role of Australian
Financial Complaints Authority (AFCA) regarding small business finance disputes.
ASBFEO confirmed it is aware of the issue and is working with AFCA to clarify the
situation.
Treasury
Treasury is currently supporting Mid-Year Economic and Fiscal Outlook preparation
and progressing a range of 2021–22 budget measures including consultation on the
cessation of employment taxing point for employee share schemes.
ATO and Treasury are considering the impacts of the High Court decision regarding
2 of 9taxation of working holidaymakers. The High Court decision is only relevant where a
working holidaymaker is both an Australian resident for tax purposes and from a
country where the tax treaty with Australia has an enforceable non-discrimination
article.
On 5 October 2021, an announcement of Consumer Data Rights (CDR) rule
amendments was made to enable consumers, including small businesses, to share
CDR data with their trusted adviser.
The Payment Times Reporting Scheme is in place and the first reporting window
closed on 30 September 2021 for businesses with an end of financial year date of
30 June.
Ongoing Franchising Reforms are underway including finalising an approach on
increasing penalties in the franchising code and consideration of whether there
should be a standalone automotive franchising code.
Member comments
Several members indicated that Government support for small business is essential
in 2022 as an ongoing response to COVID-19. There is a real fear that economic
activity will drop post-Christmas and small business will continue to struggle.
CDR rule amendments for sharing data with a trusted adviser is a step forward.
However, there is an ongoing concern about the disruption CDR could have on the
relationship between trusted adviser and client. Treasury will continue to monitor
this issue.
Member discussion
Discussion focused on what members are hearing from small business about
COVID-19 impacts on small business.
Some businesses are impacted by COVID-19 restrictions more than others.
While issues are similar across the country, the timing varies. Border closures
are impacting confidence, particularly in tourism and service industries.
The ‘multi-speed economy’ is making it difficult to draw definitive conclusions
about the overall health of the small business sector.
Labour shortages and supply chain issues are the most common challenges
across all industries. As a result, small business owners are overworked and
working ‘in’ and not ‘on’ their businesses.
The combination of labour shortages and a fatigued workforce is impacting
businesses’ ability to operate at full capacity over the Christmas period.
Businesses are taking longer to understand their true debt position and are
fearful of what it looks like. Deferred debt is creating a challenge for tomorrow,
particularly in relation to deferred lease payments.
Businesses are delaying making investment decisions due to debt burden,
uncertainty and supply chain issues.
Increased cost of materials and labour are reducing profit margins. High
turnover is not currently translating to high profit margins.
3 of 9There are some reports of price gouging in an effort to make up for lost
revenue.
Small business is still in the midst of COVID-19 which is impacting mental
health. Exhaustion and anxiety about the future are big issues.
The cost of freight has increased significantly, and limited international freight
capacity is being prioritised to China and the USA over Australia.
Consumer patterns have not returned to normal. The usual ‘Christmas
bonanza’ cannot be relied upon.
Online sales may not generate profit until next year.
Some associations are seeing declining membership as businesses exit the
industry.
Radically reduced levels of traffic in CBDs are continuing.
Audit action by some state agencies relating to government grants and payroll
tax has produced nervousness which may flow on to clients engaging with the
ATO.
Communication with small businesses following compliance activity needs to
be effective – especially at this time, for example a recent ATO Super
Guarantee audit where the outcome was not effectively communicated. The
ATO followed-up on this experience out-of-session.
Incentivising e-invoicing for small business
With approximately 89% of small and medium businesses processing invoices
manually and over 1.2 billion invoices being exchanged in Australia annually, e-
invoicing provides significant productivity and cost efficiency benefits for Australian
businesses if adopted more widely.
To date the ATO has focused efforts on raising awareness among intermediaries,
with momentum growing in this space. Small business engagement activities are
planned for 2022 which will focus on the benefits and how to get started, including
low-cost options.
Representatives from MYOB and Xero provided a demonstration of e-invoicing in
their products. Benefits highlighted included ease of use, increased security, view of
history, efficiency, less data handling, fewer errors, and reduced costs.
Member comments
Members suggested the ATO can support small business awareness of e-invoicing
by:
being considerate of timing as business attention is likely to be focused on
COVID-19 recovery
developing tailored case studies that highlight benefits and efficiencies,
including the opportunity to spend less time on invoicing.
ATO’s debt and lodgment approach for small business
Over the past two years the ATO has taken a tailored approach to lodgment and
payment in response to COVID-19.
4 of 9The ATO’s approach is to minimise the need for firmer debt collection action
through our enhanced engagement. The more the ATO knows about clients and
their circumstances, the better equipped it is to help.
The ATO helped engaged clients get back on track using additional time to lodge,
payment plans and remissions of interest and penalties. The ATO cannot help
clients who do not engage with us.
The ATO has resumed firmer debt collection activity, prioritised for clients that
represent higher risks and who do not engage. The ATO is very conscious of using
these types of activities sparingly and with empathy.
Member comments
The following insights were shared about why small businesses might not be
engaging with the ATO or their trusted advisers to discuss their debt position and
how the ATO can better tailor its communication efforts.
The topic is stressful and forces clients to acknowledge the debt.
Many are just getting back into positive cash flow and are reluctant to part with
money due to ongoing economic uncertainty.
Navigating online services and websites is challenging.
Businesses are not hearing the message that the ATO is here to help and
support.
It is important that businesses know their debt position.
Businesses are busy and not in a position to take phone calls during the day
as it adds to the stress.
Members shared a diverse range of perspectives on how the ATO can engage and
communicate with small businesses, with all agreeing that empathy and human
interaction is critical.
Single Touch Payroll Phase 2 implementation
Single Touch Payroll (STP) Phase 2 reporting commences 1 January 2022 and is
primarily designed to support the social security system and to assist related
reforms to income reporting by Services Australia customers.
The ATO recognises that the changes have not been front of mind for many
employers because of COVID-19 impacts, so is taking a pragmatic and reasonable
approach to support employers to transition to STP Phase 2.
If an employer’s Digital Service Provider (DSP) is ready for 1 January 2022
and they can start reporting, the ATO will help and support them to start.
If an employer can start reporting by 1 March 2022 they will be considered to
have started on time – they will not need to apply for a deferral.
DSPs who, despite their best efforts, may not be ready by 1 January 2022,
now have deferral dates throughout 2022. Employers will need to speak to
their DSP to learn their deferred start date.
For employers who still need more time to transition to STP Phase 2, an online
deferral application process will be available from December 2021.
5 of 9Engagement and communication activity continues and includes ATO open forums
and DSP-hosted events. The ATO has conducted a well-attended webinar series
over the last few months. Recorded webinars are available on the ATO website.
Frequently asked questions will be available on ato.gov.au as an additional
resource for employers.
The ATO will be writing to a small population of employers who will be getting ready
for STP Phase 2 in the first half of 2022 to raise awareness on what they need to
do and where to find information.
Preliminary analysis demonstrates that reporting through STP Phase 2 creates
significant time efficiencies for the employer. This is not withstanding the investment
required upfront to transition. This message will start to be built into communications
and awareness activities.
Member comments
The STP Phase 2 transition may not be as resource intensive as some perceive.
For many it will be an easy adjustment, especially if the benefits are clearly
understood. This message needs to be communicated more broadly.
The ATO noted the need to develop testimonials from those who have transitioned,
highlighting positive experiences to help win hearts and minds.
Small Business Stewardship Group 2021 year in review
The ATO provided a brief year in review, including:
the return to a quarterly meeting model using a hybrid WebEx/hub model for
our first two meetings before shifting back to WebEx only following the
resumption of COVID-19 restrictions
several changes in membership, including changes in our small business
representatives and personnel changes within several industry associations
the group continues to be well-regarded with many keen to join
recognising some additional industries, for example, building and construction,
tourism should be represented.
Member comments
The SBSG is a valuable group with most members wanting to continue to be
involved.
Group meetings are extraordinarily beneficial from a consultation and information-
sharing perspective.
The group builds relationships and covers a lot of material.
The ATO should consider an all-in meeting for all consultation groups once or twice
a year.
Tasks should be assigned to sub-groups to manage and report back to the group.
6 of 9Members are encouraged to provide any additional views on how the group
operates and any opportunities for improvement.
Attendees
Attendees list
Organisation Member
ATO Deborah Jenkins (Co-chair), Small
Business
ATO Andrew Watson, Small Business
ATO Emma Rosenzweig, Superannuation
and Employer Obligations
ATO Michelle Crosby, Australian Business
Registry Services
ATO Vivek Chaudhary, Lodge and Pay
Australian Chamber of Commerce and Jenny Lambert
Industry
Australian Retailers Association Jason Robertson
Australian Small Business and Family Bruce Billson (Co-chair)
Enterprise Ombudsman
Australian Veterinary Association Moss Siddle
Business Enterprise Centres Australia Graham Baxter
Chartered Accountants Australia and Susan Franks
New Zealand
Council of Small Business Alexi Boyd
Organisations Australia
Department of Industry, Science, Peter Cully
Energy and Resources
Direct Selling Association of Australia Gillian Stapleton
Inc
Indigenous Business Australia Greg Ellis
7 of 9Institute of Certified Bookkeepers Matthew Addison
Motor Trades Association of Australia Richard Dudley
Real Estate Institute of Australia Jock Kreitals
Restaurant and Catering Industry Hugo Robinson
Association
Small business operator Deborah Cook
Small business operator Paul Meissner
Small business operator Tony Sama
Treasury Bede Fraser
Guest attendees
Guest attendees list
Organisation Attendee
ATO Anthony Marvello, Technical Leadership and Advice
ATO Chontelle Weyman, Superannuation and Employer Obligations
ATO Jason Lucchese, Superannuation and Employer Obligations
ATO Julia Cook, ATO Corporate
ATO Les De Wind, Lodge and Pay
ATO Mark Stockwell, Enterprise Solutions and Technology
ATO Natascha Bowett, Enterprise Solutions and Technology
ATO Sally Bektas, ATO Corporate
MYOB Mandy Hicks
Xero Simon Foster
Apologies
8 of 9Apologies list
Organisation Member
Australian Lottery and Newsagents Association Michael Renshaw
Our commitment to you
We are committed to providing you with accurate, consistent and clear information to help you understand
your rights and entitlements and meet your obligations.
If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as
a result, we will take that into account when determining what action, if any, we should take.
Some of the information on this website applies to a specific financial year. This is clearly marked. Make
sure you have the information for the right year before making decisions based on that information.
If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to
you, contact us or seek professional advice.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way
that suggests the ATO or the Commonwealth endorses you or any of your services or products).
9 of 9You can also read
