Small Business Stewardship Group key messages 10 March 2020

Welcome and introductions

Members were welcomed and apologies noted. No conflicts were declared.

Member resignations were noted:

• Paul Mather, Employer Obligations Association
• Michelle Size, Small business operator.

Questions on agency updates

Agency representatives provided written updates which were included in the meeting papers circulated to members. At the meeting the following matters were discussed:

Australian Taxation Office

E-invoicing is a work in progress. The ATO is working on direct engagement with interested small businesses to identify early adopters, champions and case studies.

The current focus for e-invoicing includes encouraging large business adoption, so they can receive small business invoices when software packages become available.

The activity statement financial processing system changes were successfully deployed.

The Reach Out Indigenous business support pilot program started in July 2018 in Queensland. The program helps Indigenous small businesses meet their tax and superannuation obligations through tailored support and education. In January 2020, we announced the expansion of the pilot into New South Wales, South Australia and Victoria.

As part of its Mid-Year Economic and Fiscal Outlook (MYEFO), the government reaffirmed its commitment to the Modernisation of the Business Register and Director Identification Number measures. Legislation has passed through the House of Representatives and is awaiting debate in the Senate. Consultation on the Director Identification Number will occur in April 2020.

Treasury

The Treasury discussed a range of legislative matters, including:

• Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020 which amends the Income Tax Assessment Act 1997 – The bill makes certain government support payments, non-assessable non-exempt income and updates the list of deductible gift recipients to include the Australian Volunteers Support Trust and the Community Rebuilding Trust. It passed through the Parliament and received Royal Assent on 13 February 2020.
• Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 – This bill is before the Senate.

Members noted the challenges in providing considered feedback on all the proposals from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The Department of Industry, Science, Energy and Resources

The Department of Industry, Science, Energy and Resources noted that the Exposure Draft of the Payment Times Reporting Bill was released for consultation on 21 February 2020, with a submissions closing date of 6 March 2020.

Australian Small Business and Family Enterprise Ombudsman

The Ombudsman is working closely with key agencies including the Department of Industry, ATO, and New South Wales, Victorian, and South Australian Small Business Commissioners to ensure bushfire recovery activity is targeted, timely, and relevant so small businesses in affected areas can resume normal trading as soon as possible.

The effects of droughts, bushfires, floods, and COVID-19 on a number of industries and supply chain problems were noted.

Member discussion

Issues raised by members included:

• Cash flow is the major issue facing small businesses currently. While payment plans offered by the ATO can be helpful, small businesses are reluctant to commit to a payment plan if they have no cash or are waiting on payment from other parties.

Call centre advice on setting up myGovID, authorising people and linking to Australian Business Number's using Relationship Authorisation Manager (RAM) is not always correct.

• Small businesses have been affected by the withdrawal of large international firms in the automotive and direct selling industries.
• There are cases of tax agents providing incorrect advice to small businesses that trust their advisers to help them do the right thing.

Dealing with disasters and coronavirus workshop - ATO support for small business

An overview of ATO support and assistance available to people in bushfire-affected postcodes was provided.

Lodgment deferrals were automatically provided until 28 May 2020 to those in identified bushfire impacted postcodes. The deferrals apply to income tax, activity statement, self-managed superannuation funds, fringe benefit tax and excise. Those affected by the fires in other postcodes are encouraged to contact the ATO for tailored support.

Members provided feedback including:

• Small businesses outside of identified bushfire impacted postcodes have also been significantly affected. It may take businesses years to recover.
• Some small businesses in bushfire-affected areas still have no access to computers, phone lines, internet and mobile. This limits their ability to engage with their tax and superannuation obligations.
• There is a significant impact on employees. Businesses are unsure about putting staff off, putting them on leave, or asking them to work from home. Many small businesses employ casual workers who have no ‘safety net’ of accrued leave.
• Some small businesses are so heavily affected they have stopped operating for the moment.
• While interest free loans from the government are available for up to $50,000 for two years, some taxpayers may not be aware of this assistance.

The ability of taxpayers to meet their lodgment obligations from 28 May 2020 may need to be reconsidered closer to the time.

Members discussed the impacts of coronavirus on the local economy including:

• the impacts on trade due to coronavirus fears and cancelled Chinese New Year celebrations
• instances where an overseas worker cannot go home temporarily but works remotely
• the impacts of shutdowns in China and Europe on international trade and supply chains
• reductions in airlines services from China are affecting not only tourism, but also businesses that use air freight to transport their products to international markets, for example, Tasmanian salmon
• Many small businesses are represented by tax or BAS agents. It could be valuable for the ATO to partner with intermediaries to assist with communicating key messages. Vouchers could be provided for those who cannot afford advice.
• The ATO should consider the current complexity of getting assistance and make it easier. Often the most vulnerable people in the community are not aware of government assistance schemes.
• a one-stop-shop website for all federal government and state assistance would be valuable
• a coordinated whole-of-government approach could be used as a blueprint for future disaster responses.

Superannuation and employer obligations update

The Superannuation Guarantee Amnesty Bill has passed through Parliament and received Royal Assent.

The amnesty was announced in May 2018. New web content has been developed and will be live from 11 March 2020. The amnesty online claim form contains pop-up error boxes, designed to make it easy to understand and to help claimants correctly lodge their claim.

From 6 March 2020 businesses have a six-month one-off opportunity to correct unpaid Super guarantee for quarters starting from 1 July 1992 to 31 March 2018, without incurring administration charges or penalties. It was agreed a timeline to help members understand the key dates would be distributed to members.

The Single Touch Payroll uptake for substantial employers (greater than 20 employees) is over 98%. For small employers (less than 20 employees) uptake is around 67%. The ATO is conscious of supporting small businesses that have not yet transitioned.

AUSkey transition update

The ATO provided an update on AUSkey transition, including:

• uptake of myGovID and RAM communication activities to date
• help and support tools available to business and tax professionals
• proactive steps we have taken to contact and support those yet to transition
• the expansion of document types to support proof of identity.

Members discussed issues including:

• the evidence required to set up myGovID, particularly the potential use of overseas birth certificates and the challenges around third party data
• how to support those businesses and individuals who have tried but failed.
• the introduction of the Director Identification Number through the Modernisation of Business Registers measure. There is now a significant cross-over between office holders of a business and the employees responsible for tax affairs.

Other business

Independent review for small business pilot

The independent review for small business service commenced as a 12-month pilot in July 2018. The pilot has been extended to 31 December 2020. An independent review is a service where an officer outside the audit area reviews the technical merits of a case prior to finalisation of the ATO audit position. For small businesses, the benefit is that taxpayers gain a better understanding of the issues and reasons for the audit decision. Of the reviews undertaken to date, only two have proceeded to objection. This means we are seeing disputes resolved more quickly.

Common matters for independent review include employee v. contractor, administrative penalties and substantiation.

Small Business Stewardship Group (SBSG) membership refresh

Members were thanked for their contributions and commitment to the SBSG and were invited to continue their current membership. If a member would like to resign for any reason, please email the Chair or the Secretariat.

The SBSG’s Charter has been updated to align with the ATO’s standard charter for all stewardship groups. A copy of the new Charter will be sent to members for review out-of-session.

2020 meeting dates

Members were invited to suggest agenda topics. Feedback on proposed future dates and timings of the meeting was requested.

Wrap up and close

Members were thanked for their contributions, recognising the time taken out of their busy schedules to share their experiences.

Attendees

Apologies