Incoming SME tax changes for the FY 2020
The start of the new year has brought some core changes that will affect many SME’s in the way they conduct their business.
Below are the changes:
- AUSkey to be scrapped
AUSkey will be replaced by myGovID form 1st April 2020. This is a new way for the businesses to report to the ATO. All business owners will have to set up the myGov account and will require to link the ABNs. The new process will be a more secure, streamlined and flexible way to report information to the ATO.
- Expansion of Taxable Payment Reporting Systems (TPRS)
In the past the TPRS system was applied to the building and construction industry for a while, which was then extended to cleaners and couriers. For 2020 FY it will be further extended to road freight, IT and security investigation industries. The businesses within these industries will now have to lodge taxable payments annual report each year and include payments to contractors and subcontractors. The first annual report to be lodged is due by 28th August 2020.
- E- invoicing
A new system of e-invoicing will be introduced this year under federal government’s e-invoicing framework which includes a commitment to pay electronically supplied invoices from small business suppliers, up to the value of $1 million within five days’ time period, or else interest will be applied however it will not be compulsory for all businesses.
- Single Touch Payroll reporting
It is highly encouraged that all the businesses paying wages are required to register their business with the STP system. The intention of STP is to create transparency and guarantee employers are meeting their payroll obligations. The ATO will start contacting the businesses who have not yet registered themselves and penalties will apply accordingly.
If you need assistance with any of the above or would like to discuss the changes in detail, please feel to contact one of our trusted advisors at Cordner Advisory.