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  • Small Business Stewardship Group minutes 24 May 2018

    Meeting details

    Venue: ATO offices, Canberra

    Date: 24 May 2018

    Chair: Deborah Jenkins

    Contact: email Small Business Stewardship Group secretariat or phone (02) 9374 5658

    1. Welcome and introduction

    Members were welcomed and apologies noted.

    The new Australian Veterinary Association representative replacing Debbie Neutze will be Michael McKeand. The group acknowledged Debbie's contribution.

    2. Single Touch Payroll

    A brief summary was provided of the progress of Single Touch Payroll (STP) in readiness for the mandatory 1 July 2018 reporting change for employers with 20 or more employees.

    During the first year of reporting we will support employers to help them make a seamless, successful transition to STP. Our focus will be to help and assist employers to get it right.

    Employers with 19 or fewer employees can choose to report through STP from 1 July 2018. Subject to legislation being passed, small employers will be required to start reporting through STP from 1 July 2019.

    We are exploring a range of potential solutions for those in the micro employer market (one to four employees) that may not be users of payroll software or have little or no experience in the digital world. These potential solutions including options other than payroll software.

    See also:

    3. Agency update since last meeting

    Department of Jobs and Small Business

    The Department of Jobs and Small Business is expected to announce shortly the successful applicants to provide services under the Government’s primary small business advisory initiative, the Australian Small Business Advisory Service (ASBAS) Digital Solutions.

    Successful service providers will offer direct services to small businesses through a combination of channels and formats, including face to face, video calls online, webchats, interactive webinars or phone calls.

    See also:

    Australian Taxation Office

    The Small Business Technical Working Group met for the first time in April 2018. A wide range of issues were canvassed for potential consideration by the Working Group over the next 12 months that:

    • improve willing participation by making it easier for small business to comply with tax and superannuation laws
    • reduce red tape and remove irritants for small business.

    The working group supplements existing consultation arrangements with the small businesses community and industry associations through the Small Business Stewardship Group.

    Treasury

    The Board of Taxation's Review of Small Business Tax Concessions is now public. The Consultation Guide can be accessed on the Board of Taxation website.

    See also:

    An overview of Budget announcements relevant to small business was provided by Treasury at agenda item 5.

    Australian Small Business and Family Enterprise Ombudsman

    The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) welcomed the opportunity to provide input into the Treasury review of the Australian Taxation Office. The report is complete and has been submitted to the Minister for Revenue and Financial Services, Kelly O’Dwyer.

    4. Strategic discussion of business

    Small Business Digital Task Force Report

    The Small Business Digital Taskforce handed its final report to the Treasurer, Scott Morrison, and the Minister for Small and Family Business, the Workplace and Deregulation, Craig Laundy on 10 May 2018.

    The Government is considering the report and its recommendations.

    See also:

    5. Budget update

    The Government handed down the 2018-19 Budget on 8 May 2018.

    Key small business tax measures include:

    • extending the $20,000 immediate deductibility threshold for small businesses for a further 12 months to 30 June 2019
    • extending support for craft brewers and distillers
    • Tax Integrity – Clarifying the operation of the Division 7A integrity rule
    • Tax Integrity – Enhancing the integrity of concessions in relation to partnerships
    • Tax Integrity – Extending anti-avoidance rules for circular trust distributions
    • Tax Integrity – Improving the taxation of testamentary trusts
    • reforms to combat illegal phoenixing.

    In response to the Black Economy Taskforce Final Report, the Government announced a comprehensive approach to cracking down on the black economy. Key measures include:

    • combatting illicit tobacco
    • introduction of an economy-wide cash payment limit
    • increasing the integrity of Government procurement processes
    • removing tax deductibility of non-compliant payments
    • consulting on a new regulatory framework for Australian Business Numbers
    • further expansion of taxable payments reporting.

    See also:

    6. Superannuation update

    On 24 May 2018, Minister for Revenue and Financial Services announcedExternal Link the commencement of a 12 month Superannuation Guarantee Amnesty (the Amnesty).

    The Amnesty is a one-off opportunity for employers to self-correct past super guarantee (SG) non-compliance without penalty.

    Subject to the passage of legislation, the Amnesty will be available from 24 May 2018 to 23 May 2019.

    Employers who voluntarily disclose previously undeclared SG shortfalls during the Amnesty and before the commencement of an audit of their SG will:

    • not be liable for the administration component and penalties that may otherwise apply to late SG payments, and
    • be able to claim a deduction for catch-up payments made in the 12-month period.

    Employers will still be required to pay all employee entitlements. This includes the unpaid SG amounts owed to employees and the nominal interest, as well as any associated general interest charge (GIC).

    The Amnesty applies to previously undeclared SG shortfalls for any period from 1 July 1992 up to 31 March 2018.

    See also:

    7. Tax Gap

    The tax gap is an estimate of the difference between the tax the ATO collects and what we would have collected if every taxpayer was fully compliant.

    Estimating tax gaps forms part of the ATO's broader accountability and transparency as leading administrator, and is consistent with contemporary international best practice in tax administration.

    Tax gap estimates are important for us to better understand levels of compliance and risk in the tax and superannuation systems, to inform our resource allocation, and to assess the effectiveness of our work over time.

    Tax gaps are also an indication of the system in operation. The insights gained from this analysis guide us in determining priority risks and development of strategies, including administrative design, help and education, and compliance approaches.

    Recognising the importance of having reliable and credible tax gaps, we engage an independent expert panel to provide advice on the suitability of our gap estimates and methodologies.

    The panel’s advice considers:

    • whether proposed methodologies can be relied on to produce a sufficiently robust gap estimate
    • whether the methodologies are likely to be broadly accepted as a way of estimating a gap and whether alternative methodologies should be considered
    • international comparability, including global developments in the use of tax gap estimation methodologies and practices.

    See also:

    8. Digital identity and framework

    The Digital Transformation Agency (DTA) is working with government agencies, the private sector and the public to design and implement a digital identity solution for Australia.

    Govpass will provide a simple, safe and secure choice for people to verify who they are and access government services online, reducing the need to visit a shopfront.

    The first government services to be trialled with the digital identity system, from October 2018, are applying for a Tax File Number and registering a business. Later releases will expand to a whole of government business services and will eventually replace AUSkey.

    A number of Commonwealth agencies will work together to roll out digital identity:

    • the DTA has oversight of the system, developing a set of rules called the Trusted Digital Identity Framework to accredit identity providers
    • the ATO will be the Commonwealth’s identity provider to verify people are who they say they are
    • the Department of Human Services (DHS) will operate the exchange — a technology gateway between accredited identity providers and the services people use.

    9. Penalty relief initiative

    We are continually seeking new ways to encourage clients to participate in the tax and superannuation systems.

    From 1 July 2018, we will not apply penalties for a failure to take reasonable care or for not having a reasonably arguable position to eligible taxpayers for errors made in income tax returns and activity statements.

    Penalty relief will apply to:

    • most individuals, small businesses, self-managed super funds, strata title bodies, not-for-profits and co-operatives
    • income tax GST, PAYGI, PAYGW, luxury car tax, wine equalisation tax and fuel tax credits but not to other taxes such as fringe benefits tax (FBT) and the superannuation guarantee.

    Penalty relief does not impact taxpayer rights to normal objection and appeals processes.

    See also:

    10. Other business

    Members were encouraged to put forward topics for inclusion as agenda items for future meetings.

    11. Meeting close

    Chair Deborah Jenkins thanked members for their contributions to meetings throughout the year.

    Attendees

    Deborah Jenkins, Deputy Commissioner, Small Business, ATO

    Robert Ravanello, Deputy Commissioner Debt, ATO

    James O'Halloran, Deputy Commissioner Superannuation, ATO

    Mathew Umina, Assistant Commissioner, ATO

    Bede Fraser, Treasury

    Rose Verspaandonk, Department of Jobs and Small Business

    Kate Carnell, Small Business and Family Enterprise Ombudsman

    Peter Strong, Council of Small Business Australia

    Magdalena Kaczmarska, Australian Chamber of Commerce and Industry

    Jock Kreitals, Real Estate Institute of Australia

    James Coward, Restaurant & Catering Australia

    Susan Franks, Chartered Accountants Australia & New Zealand

    Graham Baxter, Business Enterprise Centres Australia

    Gillian Stapleton, Direct Selling Australia

    Michael Renshaw, Australian Lottery and Newsagents' Association

    Maree Petersen, small business operator

    Tony Sama, small business operator

    Michelle Size, small business operator

    Apologies

    Tim Dyce, Deputy Commissioner Indirect Tax, ATO

    Deb Cook, small business operator

    Richard Dudley, Motor Traders Association of Australia

    Michael McKeand, Australian Veterinary Association

    Paul Mather, Employer Obligations Australia

    Heath Michael, Australian Retailers Association

    Wally Tallis, Indigenous Business Australia

      Last modified: 11 Jul 2018QC 56245