Small Business Stewardship Group key messages 18 August 2020

Cash flow coaching kit

As the COVID-19 situation evolves, the ATO understands small businesses and their trusted advisors are facing unique and ongoing challenges. Cash flow continues to be one of the biggest challenges for small businesses and many, especially those in Victoria, are finding it even tougher to manage their financial obligations.

The Cash flow coaching kit is ideally positioned as a resource to help small businesses work with their trusted adviser to better manage their cash flow. The kit can be used at any stage of the business lifecycle and is particularly useful in times of financial stress.

The beta digital kit has been refreshed with a contemporary layout and improvements in its functionality and accessibility. The ATO is working with 700 beta users and full release of the digital kit is expected later in 2020.

A demonstration of the beta test kit included:

• concepts of cash flow management
• a health check on the business
• a cash flow canvas, using actual financial figures from the business
• change levers to help improve cash flow in and reduce cash flow out
• printable action checklists.

Member insights

Members suggested the kit could be used a predictive tool to assess a business’s viability under different scenarios and is especially pertinent to crisis situations. By changing the inputs, a business can model projections and plan for various scenarios.

The kit can be used to test viability through the canvas tool which provides bottom line information to businesses via their financials.

Some members assumed the kit required good record keeping, time available to set aside from normal business activities and money to pay for an adviser, however some small businesses / sole traders do not have such capacities. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) suggested the small business grants they are proposing to government might assist small businesses / sole traders engage an agent to help them assess viability using the kit. One member explained that their advisers schedule in 15-minute Cash flow coaching kit sessions to assist with cost and time restraints as the kit is flexible enough to work in this way.

The kit can produce powerful figures to outline business value and small businesses should get the benefit of working through it.

Modernising Business Registers Program and Director ID

Michelle Crosby presented key elements of the Modernising Business Registers (MBR) Program and Director ID work.

The ATO MBR Program will deliver:

• a modern, whole-of-government business register platform that has high levels of reliability, accessibility and security
• a new registry service by consolidating Australian Securities and Investment Commission (ASIC) and Australian Business Register (ABR) registries, providing a digital user interface for the full business registry lifecycle.
• a Director Identification Number regime for over 2.7 million company directors.

The future integrated registry service provides an opportunity to capture a richer, more accurate dataset and offer an enhanced user experience with increased support at start-up and throughout the lifecycle of a business.

The immediate focus is on the registry consolidation and transformation agenda to optimise delivery of a smooth, seamless registry experience. The ASIC Registries are expected to transfer to the ATO in early 2021.

The MBR will bring together a significant registry dataset and consolidate a range of fee-for-service and free search functions under the new registry business.

MBR will provide a digital-first registration experience that will enable clients to register and manage their ongoing obligations in a single integrated dashboard view. MBR will also deliver a business inbox–notification service.

The Director Identification Number (Director ID) features a single unique identifier and is issued once for life. Director ID will use the appropriate identity verification that is available and acceptable to Government. The Director ID should help prevent phoenix activity. The first Director ID is expected to be issued in early 2021.

Member insights

Members were interested to know how mutual recognition of licences, as announced by the Treasurer this week, will fit into the MBR. The ATO noted that mutual recognition of licences is currently a state matter and may be part of a possible future registry platform.

Superannuation Guarantee Amnesty

The Superannuation Guarantee Amnesty finishes on 7 September 2020.

Employers should come forward to the ATO before 7 September to pay or put a payment plan in place.

A communications campaign including social media has led to a spike in interest in the final weeks of the amnesty.

Members can still provide feedback on the draft Practice Statement Law Administration PS LA 2020/D1 Remission of additional superannuation guarantee charge until 28 August 2020. The PSLA outlines the ATO decision-making principles for the remission of Part 7 Penalties, including changes in the ATO’s ability to remit.

Member insights

Members noted that amnesty amounts paid before 11.59pm on 7 September 2020 are tax deductible. Therefore, while payment plans are a good option for many businesses, it should be noted that payments made after 7 September 2020 will not be tax deductible.

Members noted that under current Stage 4 conditions imposed in Victoria, some clients are physically unable to comply as they cannot attend work from their offices. This restriction also applies to the tax professionals. The ATO noted the law includes consideration of exceptional circumstances.

Agency updates

Department of Industry, Science, Energy and Resources

Department of Industry, Science, Energy and Resources is producing checklists for employers. It aims to provide all the government information a prospective employer needs to know before they take on their first employee. The checklist uses links directly to the information published on the relevant department or agency webpage.

The Australian Small Business and Family Enterprise Ombudsman

ASBFEO recently released a paperExternal Link highlighting policy changes needed to help small businesses navigating insolvency.

Other business

A small change to the Small Business Stewardship Group Charter reflects the need for the ATO Co-chair, in considering nominees for membership, to consider any real or perceived conflicts of interest regarding the nominee.

Attendees

Apologies