STP to create 10 times more compliance for small business
An Aussie bookkeeping services firm estimates that single touch payroll (STP) will exacerbate the compliance burden up to 10 times over for small businesses.
Speaking to Public Accountant, BookBoost founder, Don Grgic, said bookkeepers and BAS agents currently need a signature from a client five times a year to lodge compliance documents on their behalf – four BAS quarterly updates and a payment summary once at the end of the year.
Should the government stick to its plan to expand STP to employers with 19 or less employees from 1 July 2019 pending passage of relevant legislation, Mr Grgic predicted small businesses with a weekly payroll would be required to provide another 52 signatures to lodge the required compliance documents.
“It’s a bureaucratic nightmare. Imagine trying to chase 52 signatures in a year,” he said.
“There are still businesses out there that are paper based. Not everyone is on the internet. Not everyone is running the latest software. That's really the issue.”
Mr Grgic suggested that a more realistic alternative ATO should allow clients to be able to give bookkeepers or BAS agents authority to lodge on their behalf subject to certain conditions.
“Bookkeepers or BAS agents are processing the payroll for their clients, on behalf of their employees. That means regular timesheets, and regular information from the client,” Mr Grgic said.
“Can't the ATO allow the client to give them a yearly authority to lodge on their behalf based on the information they've provided?”
Last year, the Institute of Public Accountants noted how the rollout of Single Touch Payroll would affect small businesses, citing an additional “financial outlay” burden on these companies.
“Comments that infer that STP will reduce the regulatory burden are misguided,” said IPA chief executive Andrew Conway.
“Small businesses already face considerable compliance issues; STP will just add to the load with mandatory pay-period based reporting.”
Employers with more than 20 employees will transition to STP from 1 July 2018.