The Australian Taxation Office has not delivered their message to SMEs strongly or informatively and we hold great fears of how SMEs are expected to conquer this beast called STP2.
STP2 is not simple.
Great fears are held for SME's who will try and tackle STP2 alone.
Since the introduction of the Goods and Services Tax (GST) in 2000 this is said to be the next to rattle us all!
STP2 will have 16 new payroll categories with approximately 90 dropdown options to choose from. Not so simple...
Choosing the incorrect category or sub-cat will have consequences for your employees. It may affect their income tax returns, child support payments and so on. Not so simple....
We need clear understanding of the categories and sub-categories and to liaise with employees to try and minimise errors.
Some commercials or software providers may make this process sound simple, it is not.
It is complex. There will be errors made. This will be a learning curb for everyone. It is expected that Accounting Firms will be putting rescue packages in place for those who will go it alone but at a price.
STP2 commenced on the 1st January 2022.
The date was set. "1st January 2022" they said. No one was ready.
Information from the Australian Taxation office was not readily available or sent out for easy access. Accounting Associations scrambled to get their heads around the changes and to put together resources for all its members. It is now February 2022, one month past its commencement as we are only now receiving some resources, education, webinars and support. Further support and educational webinars are set for next month.
Software companies requested deferrals from the Australian Taxation Office (ATO) to bring their software in line with their demands of STP2.
Xero & Recon have been granted a deferral to December 2022.
MYOB and Quicken appear to be have completed their back end however have not gone live as yet (date TBA).
STP2 is a disaggregation of data.
STP2 is the pulling apart of data, playing under the rules and format of the ATO.
Data cannot be changed, amended or deleted. This is why our Software Partners have not been able to meet the deadline of 1st January 2022 and have requested deferrals.
There is too much work that needs to be done at the back end.
STP2 Beneficiaries of Data
In STP1 payroll information was collected by the Australian Taxation Office and Superannuation Guarantee.
With STP2 this collection of data will not only be available to the ATO & Superannuation Guarantee but Services Australia and Child Support Agencies. I think we can all see where this is heading...
Our next step at BBSG
We are now in the process of putting together new Employee Information Sheets to provide all our payroll clients.
Once these have been sent out, filled in and return to our office, we will arrange to meet each payroll client to sit down and go through the process with them.
This process will not be an easy one for some of you.
This will depend on your employee information, whether they salary sacrifice, if they receive an allowance, type of allowance, is there child support, are they returning back to work, do they have any government loans and so on.
Example : Allowance - Type of Allowance - Motor Vehicle Allowance - how is this allowance calculated, by km - calculation? by fixed amount?
A picture has been drawn....
We are currently attending seminars, educating ourselves and getting our hands on as much resource material as we can to be able to transition everyone with little pain.
But until our Software providers are ready to go live, all we can do is be prepared.
We are hoping to be able to go live by June 30th 2022 so that we start the next financial year afresh.
If you wish to pop in and see us or call for chat, please feel free to do so.
Please call the office on 8080 9614 to arrange an appointment.