A number of large businesses and even government agencies are failing to meet their payroll reporting obligations, an accountant has suggested, raising questions about how SMEs will cope with the transition to STP.
Tasmanian accountant Tony Culberg OAM said that, in reviewing his individual clients ahead of 30 June, he had identified a number of their employers — including government agencies and listed companies — that are not yet reporting payroll information via the Single Touch Payroll (STP) system.
“When I checked 50 of my individual clients on Monday, 17 June, I found that many large employers were not reporting via STP. Or if they were, the ATO was not processing the reports,” Mr Culberg commented in response to a My Business story on the role of AUSkey and myGov in STP.
“These employers included subsidiaries of ASX-listed companies, two entire ASX-listed companies, some local councils, most Tasmanian government departments, and some departments/agencies of ACT, Vic, NSW, Qld and the Commonwealth government. Just over half the clients do have STP-compliant employers, but many were smaller employers like schools, legal firms and so on.”
He added: “STP from my perspective has not been widely adopted, especially by any level of government. If government agencies cannot make STP work, with all their resources, what hope does a really small business have?”
Mr Culberg declined to publicly comment any further.
Take-up ‘strong’ but incomplete
The ATO would not confirm or deny any specific cases, with a spokesperson stating “the ATO cannot comment on the tax affairs of entities or individuals”.
However, a spokesperson refuted claims that STP has not been widely adopted, telling My Business that take-up to date has “been very strong”.
“Currently, the ATO has 158,000 employers reporting STP, with over 100,000 of those that are small business, and we are seeing around 2,000 to 3,000 employers commencing STP reporting each day,” the spokesperson said.
“These small employers are already reporting ahead of time — small employers have until 30 September to start reporting. We recognise that some small employers will need more time and the ATO will take a pragmatic approach to providing additional deferrals.”
By the ATO’s own figures, there are around 70,000 large employers currently registered for tax purposes in Australia. If less than 58,000 of those are so far using STP to report payroll data, then some 12,000 or more are not yet doing so.
“As with small employers, the first year of STP reporting for substantial employers was a transition year and penalties did not apply,” the ATO spokesperson said.
“For those large employers that are not reporting and do not have a deferral in place, the ATO is following up with these employers appropriately.”
Bookkeeper Lielette Calleja, who was a panellist on the recent My Business webcast dedicated to STP, said she was “surprised” by the situation.
“Why aren’t they using an outsourced payroll provider that is STP compliant?” she told My Business.
“Government agencies’ payroll would not be straightforward, and the same goes for the not-for-profit organisations plus large businesses.”
Ms Calleja did appear to agree with Mr Culberg that the rollout has been less than perfect.
“It seems ironic that they have built out STP to cater for the simplest payroll scenario and yet they haven’t rolled out a solution for the non-basic scenarios and those that use integrated complex payroll solutions,” she said.
More information on the rollout, and the exceptions for certain small and microbusinesses, can be found in the My Business Guide to Single Touch Payroll.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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