SMEs face “significant ramifications” from Single Touch Payroll (STP), according to a prominent accounting body, which claims it will simply add to the existing compliance burden for businesses.
Just a day after the government announced the rollout of STP, a prominent accounting body has criticised the additional burden it will place on SMEs.
The Institute of Public Accountants (IPA) called on the government to prove its cost benefit for the SME sector, which will come into force from 1 July 2018 for all businesses with 20 more employees, and the same date in 2019 for smaller employers.
Minister for Revenue and Financial Services Kelly O’Dwyer said it forms part of the government’s approach to tackle the $2.85 billion Superannuation Guarantee shortfall.
“We support the objectives behind STP and the increased transparency and visibility it provides. For larger employers, the compliance costs associated with STP can be streamlined within their existing processes with minimal additional compliance costs,” chief executive officer Andrew Conway said.
“[However], this is not the case for small or micro-employers.
“Comments that infer that STP will reduce the regulatory burden are misguided. Small businesses already face considerable compliance issues; STP will just add to the load with mandatory pay-period based reporting.”
According to Mr Conway, the government conducted a pilot program in order analyse the impact mandatory reporting would have on smaller businesses.
“We have been waiting for the results to prove the cost benefit analysis of introducing the program, especially in relation to how it impacts SMEs.”
He said the transition will have “significant ramifications” for all employers, and as such, he implored all business owners and leaders to engage with their advisers, bookkeepers and accountants to help manage the transition to the new system.