Agency updates
Australian Small Business and Family Enterprise Ombudsman
The Australian Small Business and Family Enterprise Ombudsman will act as an arbitrator to assist resolve automotive franchising disputesExternal Link which represents fundamental change to the franchise model under the industry developed Memorandum of Understanding that pre-commits to an ‘opt-in’ agreement to use arbitration.
The Small Business Tax Concierge ServiceExternal Link is proving effective with only 1% of cases that utilise the service deciding to lodge an appeal with the Administrative Appeals Tribunal (AAT). There is opportunity to work with the ATO to raise awareness of the service.
ATO
Almost half a million directors have applied for a director identification numberExternal Link since November 2021.
There is slow and steady growth in the numbers of government agencies and small businesses adopting eInvoicing.
As part of the ATO’s Reach out program, and in alignment with Reconciliation and NAIDOC weeks, more targeted activity will take place in various regions to support indigenous small business.
The ATO has commenced writing to clients that may have their tax debts disclosed to credit reporting bureaus to raise awareness of the actions that can be taken under the disclosure of business tax debts measure. The approach provides businesses with an opportunity to effectively engage with us to manage their debts and avoid disclosure.
The ATO has written to relevant clients to inform them about potential personal liability for company tax debts under the director penalty notices program. To date, we have seen good engagement with clients engaging with us to manage their debts.
In June, the ATO will recommence applying system-based credit offsets against debts placed on hold. To improve visibility, letters will be issued to potentially impacted clients in late May to remind them of amounts on hold.
The Australian National Audit Office (ANAO) released their Addressing Superannuation Guarantee Non-ComplianceExternal Link audit report which includes 3 recommendations around implementation of a preventative strategy, enhanced performance reporting and the increased use of debt recovery powers. The ATO released a statement on 28 April 2022 addressing our response to recommendations.
Member comments
- Government and software providers need to be fully engaged in eInvoicing for small businesses to be motivated to adopt the system.
- Members questioned how details are removed from credit reporting bureaus’ list if they effectively manage their debt. The ATO confirmed that agencies have 2 days to remove details once we have advised them that the debt has been addressed.
- Members requested information on the non-pursued debt offsetting parameters and our communication strategy for impacted small businesses, noting the role of tax advisers in helping translate messages to clients.
- Members expressed interest in discussing opportunities for superannuation guarantee policy reform after the current caretaker period.
Member discussion
Challenges remain with small businesses ability to access skills and labour, supply chain issues, inflation and increasing costs of doing business.
Many businesses are absorbing increased costs instead of passing them onto consumers. Businesses require support on how to survive and be profitable in an inflationary world.
There is an opportunity for government to remove impediments to running a business. Similarly, government should consider what they can do to support businesses during their growth stages.
The full employment market is making it difficult to recruit independent contractors in the direct selling industry.
Restaurant attendance patterns are changing with many consumers avoiding traditional peak trading times.
Building and construction supply networks are increasingly asking for full payment before they take orders. This will have a flow-on impact for progress payments for builders.
Real estate activity is slowing down partially due to increased interest rates and the upcoming election. Accommodation availability in regional areas is an issue.
Skill shortages are at a historic high in the automotive industry. Supply chain issues are impacting the industry as many car parts come out of South-east Asia. Increased supply chain costs are being passed down to end-users, putting strain on businesses. There is some anecdotal evidence of price gouging to make up for profits lost over the last 2 years.
While there is evidence of some ‘green shoots’ in headline retail data; labour and skill shortages, wage increases, inflationary pressures and supply chain issues are increasing the cost of doing business.
Indigenous business relief packages are coming to an end and the withdrawal of support will create challenges. On a positive note, the lack of international travel has seen increases in domestic regional and remote travel. The increase in regional housing prices is making it difficult for many clients to buy a home.
Treasury ‘s Small and Family Business Division is engaging with the Australian Bureau of Statistics to look deeper into data to better understand the small business landscape.
Independent review service and alternative dispute resolution services
The ATO is committed to preventing disputes and promoting an internal culture where we encourage small business to talk to us early to resolve issues informally where possible.
When disputes do arise, the ATO has a suite of alternative dispute resolution services available to small businesses. The services are designed to be efficient, economic and easy-to-access. They include:
- in-house facilitation
- dispute assist
- independent review for small businesses with turnover less than $10 million.
When seeking resolution, it is important to consider all 3 services together to determine which is the most appropriate offering based on the client’s and their dispute’s specific circumstances.
At all times taxpayers have the right to formally dispute or object to an ATO decision or seek an external review of our decisions via the courts or AAT.
The current take-up rate for the small business independent review service is approximately 20%. Factors contributing to this take-up rate include:
- cost and time (noting it is a free service from the ATO, however, there are representative costs involved)
- the dispute may not be based on final position of the audit, therefore other services may be more appropriate
- the taxpayer is satisfied with the outcome of the audit and does not seek dispute resolution.
The ATO is open to feedback from members on how we can further improve our services.
Member comments
- Members from professional associations are interested in working with the ATO to raise members' awareness of available dispute resolution services.
- ATO communications, posters, fact sheets and letters are sometimes difficult to understand for those unfamiliar with ATO internal processes and terminology. Better communication of dispute service options are required, including for relevant external services that can support a small business taxpayer. Case studies could be helpful.
- Communication should highlight the independence of the processes as well as encourage taxpayers to seek help from their trusted advisers.
- Members were invited to provide feedback on ATO communications, posters, fact sheets and letters out-of-session.
- Members suggested they did not have an appreciation of the number of ATO audits or objections in progress at any one time to help understand the utilisation of alternative dispute services. The ATO committed to further contextualise these numbers at a future meeting.
Removal of the $450 threshold for superannuation guarantee eligibility
From 1 July 2022, employees who earn less than $450 per month, before tax will now be eligible to receive super guarantee payments regardless of how much they are paid.
Employers will need to update their payroll and accounting systems for super payments made after 1 July 2022 to ensure they correctly calculate their employees' entitlements.
The ATO is working closely with payroll and software providers to make sure their systems are updated in time.
A broad communication strategy is being delivered to ensure that software providers, employers, and intermediaries will be ready for this change.
The ATO sought feedback from members on levels of awareness of the changes, areas of concern and where we may need to provide more targeted advice.
Member comments
- Young employees and employers are an important group requiring awareness and understanding of the superannuation system. Channels outside traditional social media platforms may need to be leveraged to engage this cohort.
- The removal of the $450 per month threshold will impact the festivals and events sector given the nature of one-off and short-term employment. Working with agriculture societies could help raise awareness.
- It would be useful to target communications to small business that are employers, not the broader small business population.
- Members requested a ‘communication pack’ to support their own communications to their members and networks.
Attendees
Organisation |
Member |
|---|---|
ATO |
Deborah Jenkins (Co-chair), Small Business |
ATO |
Andrew Watson, Small Business |
ATO |
Emma Rosenzweig, Superannuation and Employer Obligations |
ATO |
Michelle Crosby, Australian Business Registry Services |
Australian Chamber of Commerce and Industry |
Jenny Lambert |
Australian Small Business and Family Enterprise Ombudsman |
Bruce Billson (Co-chair) |
Business Enterprise Centres Australia |
John Todd |
Chartered Accountants Australia and New Zealand |
Susan Franks |
Council of Small Business Organisations Australia |
Alexi Boyd |
Direct Selling Association of Australia Inc |
Gillian Stapleton |
Indigenous Business Australia |
Greg Ellis |
Institute of Certified Bookkeepers |
Matthew Addison |
Motor Trades Association of Australia |
Richard Dudley |
Real Estate Institute of Australia |
Jock Kreitals |
Small business operator |
Deborah Cook |
Small business operator |
Paul Meissner |
Small business operator |
Tony Sama |
Guest attendees
Organisation |
Attendee |
|---|---|
ATO |
Anthony Marvello, Small Business |
ATO |
Bianca Armytage, ATO Corporate |
ATO |
Caryn Kaluzinski, Superannuation and Employer Obligations |
ATO |
Farisha Ali, Review and Dispute Resolution |
ATO |
Larissa Jones-Angel, ATO Corporate |
ATO |
Larry Costa, Superannuation and Employer Obligations |
ATO |
Michael Morton, Small Business |
ATO |
Richard Mold, Review and Dispute Resolution |
ATO |
Rowan Fox, Lodge and Pay |
ATO |
Thomas O’Byrne, ATO Corporate |
ATO |
Tracie Crowden, Superannuation and Employer Obligations |
ATO |
Sonia Corsini, Superannuation and Employer Obligations |
Australian Retailers Association |
Lisa Brown |
Treasury |
Gino Grassia |
Treasury |
Tina Smith |
Apologies
Organisation |
Member |
|---|---|
ATO |
Vivek Chaudhary, Lodge and Pay |
Australian Lottery and Newsagents Association |
Michael Renshaw |
Australian Retailers Association |
Jason Robertson |
Australian Veterinary Association |
Moss Siddle |
Restaurant and Catering Industry Association |
Hugo Robinson |
Treasury |
Bede Fraser |
Treasury |
Peter Cully |