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  • Small Business Stewardship Group minutes 4 April 2017

    Meeting details

    Venue: ATO Offices, Canberra

    Date: 4 April 2017

    Chair: Emma Rosenzweig

    Contact: email Small Business Stewardship Group secretariat or phone 02 6216 6211

    Attendees

    Emma Rosenzweig, Deputy Commissioner Small Business

    Deborah Jenkins, Assistant Commissioner, Small Business

    Neil Olesen, Second Commissioner, ATO

    James O'Halloran, Deputy Commissioner Super

    Robert Ravanello, Deputy Commissioner Debt

    Tim Dyce, Deputy Commissioner Indirect Tax

    Bede Fraser, Treasury

    Kate Carnell, Small Business and Family Enterprise Ombudsman

    Peter Strong, Council of Small Business Australia

    Scott Kompo-Harms, National Farmers Federation

    Paul Mather, Employer Obligations Australia

    Maree Petersen, Small Business Owner

    Jock Krietals, Real Estate Institute of Australia

    Gillian Stapleton, Direct Sellers Association of Australia

    Michael Croker, Chartered Accountants Australia and New Zealand

    Richard Dudley, Motor Traders Association of Australia

    John Hart, Restaurant & Catering Australia

    James Coward, Restaurant & Catering Australia

    Apologies

    Wally Tallis, Indigenous Business Australia

    Heath Michael, Australian Retailers Association

    Michael Renshaw, Newsagents Federation

    Graham Baxter, Business Enterprise Centres Australia

    Debbie Neutze, Australian Veterinary Association

    Matt Elliston, Small Business Owner

    Deb Cook, Small Business Owner

    Agenda items

    1. Welcome and introductions

    The Chair, Emma Rosenzweig opened the meeting, welcoming members and noting apologies.

    2. Second Commissioner's remarks

    Second Commissioner Neil Olesen discussed the ATO's recent attendance before the Tax and Revenue Committee, including a presentation explaining how we are living up to our commitment to provide services to the community which enhance the client experience, making it easier for people to meet their obligations. He also discussed the way in which the community broadly views paying tax, including the drivers, perceptions of complexity and fairness and how sometimes communities can inadvertently facilitate tax avoidance, for example by paying cash to tradespeople for a discount.

    3. Strategic discussion of business

    Topics discussed included:

    • Payment times and practices for small business, following the Australian Small Business and Family Enterprise Ombudsman's recent inquiry
    • Recent media attention about non-payment of superannuation and related effects on business of managing employee tax and super payments eg cash flow
    • ABN registrations and contractor status
    • Member participation in the Cash Flow Management Program pilot
    • Issues for rural business included the impacts of telecommunications/internet access on ability to interact with government online
    • The complexity of different definitions of turnover for small business, including lack of indexation and alignment of agencies.
    • Registration of employers as part of the tax rate changes for working holiday makers who are in Australia on a 417 or 462 visa from 1 January 2017.

    4. Single Touch Payroll

    John Shepherd led a discussion on Single Touch Payroll (STP) which leverages off existing natural payroll cycles to streamline employer reporting obligations to the ATO. Employers will continue to follow their normal business processes in completing their payroll, but through their payroll software they will report salary/wages and PAYG withholding amounts to the ATO at the same time they pay employees. Employee super will also be reported to the ATO when employers make a payment to the super fund. Individuals will be able to view their withholdings and superannuation contributions via ATO online in real time.

    While there are transitional arrangements for small business, including a pilot, it was noted that STP will be beneficial for small businesses should they choose to adopt it. For employers with 20 or more employees STP will be compulsory from 1 July 2018. The need for further information about the definition of 20 or more employees was discussed.

    5. Transparency of Tax Debt Measures

    In the 2016–17 Mid-Year Economic and Fiscal Outlook, the government announced that from 1 July 2017 the ATO will be able to disclose to credit reporting bureaus the tax debt information of businesses that have not effectively engaged with the ATO to manage these debts.

    Subject to the legislation being enacted, the ATO will be able to report tax debt information for taxpayers with an Australian business number (ABN) where the debt balance exceeds $10,000 for at least 90 days and the business is not effectively engaged with the ATO to manage their debt. Importantly, the ATO will have discretion to disclose tax debt information to credit reporting bureaus; the measure does not oblige the ATO to disclose this information.

    The ATO is mindful of the impact that such reporting could have on businesses, therefore there are a number of safeguards proposed in both the legislation and administrative approach. This will ensure that reporting is used only where other attempts to have the business engage actively to resolve their debt have not worked, or there is a history of failing to engage. The measure will be implemented in a phased approach to assess and assure processes, and it is expected that only a small number of businesses will be reported to credit reporting bureaus initially.

    Together with the Treasury, the ATO is consulting with the community, including business, industry groups and associations, to ensure this transparency measure is implemented and administered effectively, with appropriate management of identified risks.

    6. Black Economy Taskforce

    The black economy refers to people who operate entirely outside the tax system or who are known to the tax system but deliberately understate their income or overstate their expenses. Black economy participants evade taxes and may also be over claiming welfare and other government benefits.

    The black economy crosses a number of policy areas across local, state and federal government as well as business and the community. Based on consultation so far the following themes have been identified:

    • Incentives/deterrents
    • Payment system
    • How the Government conducts its business
    • Social norms

    An interim report has been submitted to the Minister, with further consultation to take place mid-year. The final report is due in October 2017.

    7. Fix-it Squad update

    To the end of this financial year the team will be focussing on completing some of the deliverables from fix-it squads which have been conducted to date. This includes deliverables from the drought assistance and sharing economy squads.

    Members were invited to:

    • participate in designing solutions for some of the current deliverables
    • put forward ideas for future fix-it squads based on irritants in the system
    • Members who wish to be involved can contact the secretariat.
      Last modified: 30 Jun 2017QC 52758