Get your business off to the right start for the new year

Firstly, I understand many small businesses in Victoria have been impacted by the devastating bushfires which continue to impact large parts of Australia. I want to reassure you the ATO is here to help. We are already providing automatic deferrals for lodgment and payments, and we are fast-tracking refunds that are due to those in impacted postcodes.

If you have been impacted by the bushfires, we understand that your priority is to focus on your family and community – we will work with you when you are ready to get your business back on track.

For a current list of impacted postcodes and more information on how we can assist, visit Dealing with Disasters.

We will continue to update our website with any new disaster-affected postcodes and provide bushfire ongoing support to affected individuals and businesses.

Don’t worry if your address is not listed as an identified postcode. When you are ready, contact our Emergency Support Infoline on 1800 806 218 so we can help you get back on track.

I know as business owners you put a lot of time and effort into making the right decisions to help your business thrive. One of the biggest issues identified with running a small business are the day to day pressures on owners and external influences impacting them; from simply finding the time to run your business to the effects of recent events including drought and fires.

The following information will help you keep on top of your tax and super obligations.

Two men sit with laptops open on the table before them. Between the laptops they work on figures on a sheet of paper.

Record keeping and managing your business

To help keep your records accurate and complete, there are some simple steps any small business can take:

  1. Keep accurate records of all cash and electronic transactions.
  2. Keep business transactions separate from personal ones to make your record keeping clearer and to make it easier to report your business income and claim your business deductions.
  3. Use a digital record-keeping system – it can be cost effective and a real time saver.
  4. Set aside time regularly for record keeping and make it a priority, so you know where your money is coming from and going to, and so you meet your legal obligations.

For more information, check out Record keeping for business on our website so you know what records you need to keep for your business and understand the requirements.

You should also check your business is set up properly and you are optimising your use of information and opportunities that can help your business thrive:

  • Have you chosen the best business structure for your situation?
  • Are all your business registrations current and complete?
  • Have you set your business up to report to us online so you save time?
  • Are there business networking opportunities in your area that can help your business be more successful?

Help with paying

As a small business owner, you can reach out to us if you are struggling with payments. By contacting us, we will look at your individual situation and work with you to find a solution. Find out more about Help with paying.

Depending on your circumstances, we may be able to:

  • provide you extra time to pay your debt or lodge tax forms
  • set up a payment plan tailored to your individual circumstances, including interest-free periods
  • fast track any refunds owed
  • remit penalties or interest charged.

We also have a range of services to make it easier for small business owners to pay including:

  • the option to prepay your income tax and activity statement liabilities
  • SMS payment reminders
  • the ability to view your accounts online
  • functionality to set up a payment plan online or via our automated phone service.
An iPhone sits on top of a journal detailing appointments. A Laptop sits open next to them.

Keeping up to date in 2020

As they say, change is the new constant. So it is inevitable 2020 will bring with it changes and challenges for small business owners. You’re not alone in this.

We can assist you by providing support and guidance tailored to your specific circumstances. We try to identify areas where we can reduce complexity in the system such as pre-fill or other options, making it easier for small business owners and tax professionals who act on their behalf.

Some of the changes that will affect small business owners include:

  • AUSkey retiring and introduction of myGovID
  • Single Touch Payroll reporting
  • the expansion of taxable payment reporting system
  • the introduction of e-invoicing.

To make sure you’re up to date with all the changes and news you need to know, register for the ATO small business newsroom.

AUSkey retiring – introducing myGovID and Relationship Authorisation Manager

AUSkey including Manage ABN Connections (your ABN connected to your myGov account) will retire due to its limitations and changes in technology.

From the end of March 2020, to access our Business Portal and Access Manager you will need to use:

  • myGovID – the Australian Government’s digital identity provider and a new way to prove your identity online. Establish your identity once and use your myGovID to access government online services.
  • Relationship Authorisation Manager (RAM) – a new Australian Government authorisation service that allows you to act on behalf of a business online. You need to sign in to RAM using a digital identity like myGovID.

Together, myGovID and RAM provide a secure, simple and flexible replacement to AUSkey. If you or your employees use AUSkey to access our online services on behalf of your business, you’ll need to set up your myGovID and link your ABN using RAM.

You have until the end of March 2020 to make the move from AUSkey before it retires. But why wait? Download myGovID today and see the benefits.

You can read more about the change at accessing online services with myGovID and RAM.

Single Touch Payroll

Established small businesses should be using Single Touch Payroll (STP). For eligible small business owners who are just setting up and have employees, remember you need to report through STP. This enables you to report information to us as you run your payroll, including:

  • salaries and wages
  • pay as you go (PAYG) withholding
  • super liability information.

We have worked with digital providers to ensure there are a range of software options available to support your small business with STP reporting.

At the end of the financial year, you will finalise your STP data, and this will tell us and your employees the information is final and ready for their income tax return.

You no longer need to issue payment summaries for information reported and finalised through STP.

If you have closely held payees, like a family member employed by your business, you will have until 1 July 2020 to start reporting them through STP. Concessional options are available. You should already be reporting all of your other employees through STP.

Expansion of taxable payment reporting systems

In 2019, the taxable payment reporting system (TPRS) was expanded to include businesses that:

  • provide road freight, IT, security, investigation, or surveillance services, and
  • pay contractors (including subcontractors, consultants and independent contractors) to provide those services on their behalf.

These businesses will need to lodge their first taxable payment annual report (TPAR) on 28 August 2020.Businesses providing building and construction, and cleaning or courier services also need to lodge a TPAR each year.

Introduction of e-invoicing

When we talk about e-invoicing we mean the automated direct exchange of invoices between the supplier’s and buyer’s software systems.

E-invoicing removes the need to create paper-based invoices, post or email them, and reduces manual data entry – saving many small businesses much needed time.

We know Australian small business owners are owed around $26 billion in unpaid invoices at any given time. We also know that 20 percent of late payments are due to invoices being sent incorrectly following manual data entry.

E-invoicing helps streamline this process and reduces the need for manual intervention, meaning more invoices are received and paid on time. E-invoicing also helps small businesses get paid faster. The Australian Government recently announced that Commonwealth Government agencies will start paying e-invoices for contracts valued up to $1 million within five days, or pay interest on any late payments.

For small business, cash flow is often king, so receiving the funds quicker will help many small businesses stay afloat.

In addition to these benefits, it is 70 percent cheaper to process an e-invoice than a traditional paper or PDF one, resulting in further cost savings for businesses sending and receiving invoices.

Talk to your accounting package provider to see if they plan to offer e-invoicing or for more information visit our website.

Purchasing assets for your business

If you’re thinking of purchasing new or used assets for your business, the instant asset write-off threshold has been increased to $30,000 and extended till 30 June 2020.

This means you can purchase and claim a deduction for multiple assets provided each asset is under the threshold and is used or installed ready for use.

To find out more and take advantage of the instant asset write-off, check out simpler depreciation for small business on our website.

Looking after yourself during challenging times

We know change can be difficult and on top of the usual stress of running a business, it can take its toll on mental health and wellbeing.

If you are feeling overwhelmed and finding it difficult to keep on top of your tax and super obligations, we can help in a range of ways. Sometimes a little extra time or a payment plan is all a small business owner needs to relieve some pressure. The best thing is for you or your representative to contact us as early as possible so we can work out a solution with you.

For more information, refer to Supporting your wellbeing.

More information

In addition to the ATO website, you can also gain more information at our workshops and webinars, which are held in-person around Victoria, and online.

If you need any assistance, including with lodging or payments, contact the ATO on 13 28 66, or visit our website at supporting your small business.

Finally, you can follow me on LinkedIn and make sure you also follow Deputy Commissioner Deborah Jenkins on Twitter @ATOSmallBizExec, and LinkedIn to stay up to date with small business info.

Andrew Watson

Assistant Commissioner | ATO

Andrew Watson is an Assistant Commissioner for the Australian Taxation Office in the Small Business line. He is currently responsible for understanding how small businesses engage with the tax and super systems, collaborating with small businesses, industry groups and government agencies to shape the client experience and drive improved digital services. His area also helps small businesses manage cash-flow and digital readiness so sustainable and viable businesses can thrive, and advocates for small businesses within the ATO.