As previously reported in TaxVine, on 10 June 2015 the Small Business Minister Bruce Billson MP committed to undertake further consultation on the Government's Single Touch Payroll initiative around the 1 July 2016 commencement date and conducting a targeted pilot. Last Friday I attended a consultation with ATO and Treasury to discuss the Institute's thoughts on the revamped approach.
Single Touch Payroll will now only be mandatory in relation to reporting and not in relation to payment obligations. This was one of the main concerns raised by members in relation to the initiative and it has now been addressed. It will be important to ensure that the expected compliance cost savings are maintained despite the separation of payment and reporting obligations.
The proposal to further test the initiative with a pilot program is welcome news, and shows that the Government has taken on board the feedback of smaller businesses and recognised their need for further support and assistance to prepare for Single Touch Payroll. The pilot should bear out whether the initiative is beneficial for very small businesses and closely-held entities who currently do not use payroll software.
Overall the Government's decision to take their foot off the pedal and engage in more consultation on this initiative is a positive step. The Institute supports Single Touch Payroll and can see the benefits it can yield. It is worth taking the time to get it right.
The Institute's written submission in relation to Single Touch Payroll is available here.
There will be a consultation with other key stakeholders next Wednesday 24 June so please contact us at Tax Policy with any further thoughts on this initiative.
Thilini Wickramasuriya FTI is a Tax Counsel of The Tax Institute.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.