Government ties channel in compliance red tape

The federal government yesterday gave the channel two big new compliance chores.

One comes from the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018, a law that makes it compulsory for all employers to use a “single-touch payroll” system as of 1 July 2019.

Single Touch Payroll (STP) has been mandatory for employers with 20 or more staff since 1 July 2018. The scheme means businesses must send the Australian Taxation Office data on the income tax and superannuation payments made to employees every time they do a pay run. The ATO likes STP because it helps it to keep track of which business are meeting their tax and super obligations, especially once it cross-references with employees’ tax returns.

The Amendment that passed today means organisations with 19 or fewer staff now have to get up to speed with STP by 1 July.

For the many, many, channel organisations with that kind of headcount, that means some work to get ready for STP in the next four-and-a-half months. Most payroll software packages are already STP-compliant, so preparations won’t be onerous. But for those who process payroll manually, there’s work to be done.

Which is the second impact on the channel: plenty of Australian small businesses will need help preparing for STP. So this should be a busy time for channel organisations who work with accounting and payroll software vendors!

The second big compliance chore comes from the Taxable Payments Reporting System (TPRS), a data-matching effort that sees businesses in the building and construction industries are required to lodge a TPRS annual report each year on any payments to contractors and subcontractors within the industry. Matching TPRS filings to contractors’ tax returns helps the ATO to spot dodgy payments or declarations.

The information technology industry has now been included in the TPRS, meaning anyone who uses tech contractors needs to file an annual report about just how much they paid, and to whom.

The first TPRS report for IT organisations is due 28 August 2020, to cover the 2019/2020 financial year.