The ATO has set up a website to help small business owners learn about running their businesses. It’s called Essentials to Strengthen your Small Business. The site covers the 5 stages of business life (from idea to exit) and offers 21 short courses across each stage. In this blog, I’ll walk you through this website so you can see if it’s right for you!
On the website, you’ll find courses linked to one of the 5 stages of your business: Idea, Start-up, Day to Day, Change, and Exit.
Idea: when you’re thinking about starting a business.
Start-up: when you’ve just begun and need guidance on what to do next.
Day to Day: when your business is running, and you want help with everyday management.
Change: when you plan to reshape or update your business.
Exit: when you’re retiring, selling, or closing down your business.
21 Courses
The 21 courses match the stage your business is in. They cover topics from starting a business to keeping records, closing down—and everything in between. For instance, clicking “Start-up” shows you 11 courses on GST, cash flow, record keeping, home-based business deductions, and more. You can filter by business structure and industry to find the most relevant courses.
Course Breakdown
Each course has an overview, a video, and modules you can do in any order. If some modules don’t apply to you, skip them. Every course has “fast facts” – key points from the lessons. There are also “quick links” for more info. After each course, take a knowledge check to see what you need to review. Plus, there’s an “action plan” – a checklist to guide your next steps based on your learning. You can download the fast facts and action plan as PDFs or Word Docs to share or keep.
Course Account
Create an account on the website to track your courses. With an account, you can create a learning path that fits you and your business. Add or remove courses anytime from the course list. You can also save notes and favourite pages to visit later from your dashboard.
Here’s the video from the website that shows you how everything works, for those who like watching instead of reading!
This learning hub is perfect for small business owners looking for guidance without spending much time or money. It’s one of the best ATO initiatives I’ve seen recently.
For those who use the Cash Flow Coaching Kit, please note that it will be moved to this new Essentials website on June 30 2024.
In a previous blog, I discussed the challenges agents and clients face because of Client Agent Linking (CAL). Many of the issues encountered are related to setting up various digital identity software and/or not understanding the CAL process. In this blog, I will share useful links, videos and phone numbers to help those stumbling through this difficult task!
As mentioned, the CAL process is complicated. It involves setting up a myGovID, linking the ABN to the myGovID in Relationship Authorisation Manager (RAM), logging into Online Services for Business (OSB), nominating a new agent and finally advising the agent that the nomination has occurred. The links to assist with setting up myGovID, RAM and OSB are below, along with a step-by-step guide to CAL both in written and video format. Some phone numbers are listed for those who prefer to call a human being! I hope this helps those who are struggling with CAL.
Employers intentionally not paying their employees’ super has always been a bugbear of mine. If you follow my Twitter (X) account, you may have seen the hashtag I use: “#notyourmoney“. I use this hashtag because I believe that employee superannuation is not your money and never will be and I want to enforce this concept. These irresponsible employers anger me. It is completely wrong to hire people and then fail to fulfill the contract you agreed upon, which includes paying their super. In my opinion, not paying super is equivalent to stealing.
In the past, employers were able to get away with this unacceptable behavior because the Australian Taxation Office (ATO) only found out about it when employees reported them. At that point, the ATO would investigate, audit, and penalise these employers. This reactive approach has resulted in an estimated $2.5 billion shortfall in unpaid super. This is a truly disgraceful situation.
But things are about to change…
In the 2023-24 Federal Budget, it was announced that the ATO will receive $40.2 million for super compliance measures. This funding includes $27 million for data matching capabilities to identify and take action on cases of Superannuation Guarantee (SG) underpayment, as well as $13.2 million for consultation and co-design.
So what does this mean? Who/what will the ATO be data matching with?
Firstly, it is now widely known that the ATO receives payroll data from employers through Single Touch Payroll events (STP). This data includes the superannuation amounts owed to employees’ super funds. The ATO also receives information about employees’ super from the Australian Prudential Regulation Authority (APRA) through the Member Account Transaction Service (MATS). MATS is a reporting service used for more frequent and detailed reporting of member super contributions and transactions. The ATO utilises the information from both sources to identify potential non-compliant behaviour by employers.
With increased funding from the budget, the ATO will intensify data-matching activities between STP and MATS. This shift from a reactive to a proactive approach means that the ATO will be able to initiate audits themselves instead of relying on employees to report non-compliance after the fact.
It is important to note that this data-matching activity is not new. It has been ongoing since 2019, with the ATO reporting a 24% increase in investigations of super non-compliance. What is new is the improved data matching capabilities enabled by better technology and more comprehensive STP data.
The ATO is now more focused than ever on addressing super non-compliance. They have the necessary tools and resources to conduct investigations and audits on a large scale.
This makes me feel more positive about this problem. I sincerely hope the ATO succeeds in its efforts. I have a strong aversion to employers who think they can evade paying super. It is essentially stealing, a white-collar crime. Thanks to the ATO’s real-time monitoring, the likelihood of getting away with non-payment of super is rapidly decreasing. And that is a very good thing!
myGovID is an app that allows you to securely access ATO online services. It proves to the ATO that the person attempting to access a service/info is who they say they are – super important in this day and age of constant cyber attacks etc.
Setting up the app for the first time requires quite a few steps and can be slightly complicated. Sadly, if you buy a new mobile or tablet, or wish to use your myGovID on multiple devices, you will need to set up your myGovID again and re-verify your identity. You cannot just install the app on your new device and expect it to work. Below are the steps you need to follow to solve this issue.
How to set up myGovID on a new device
Firstly, you need to select “reset the app” within your myGovID app’s settings. Then, select “I am an existing user”. Then, follow the prompts to:
enter your latest myGovID email address – this is linked to the identity documents you previously verified. Setting up with a different email address will lock your myGovID on all devices and you’ll be unable to use it.
re-verify your identity – ATO recommends using the identity documents you previously used.
For security purposes, you’ll receive an email letting you know your myGovID is active on another device. You can view your myGovID setup history in your app.
Each time you set up your myGovID, its identity strength is unique to that device. This means if you set up your myGovID on multiple devices, the identity strength will only reflect what identity documents you’ve verified on that device. For example, you could have one device with a Strong identity strength and another device with a Standard identity strength. To access a service with your myGovID, that device needs to meet the minimum identity strength required of that service. Where you’re setting up on a new device, you need to take additional steps if you transferred your app.
At the time of writing this blog, most employers are actively submitting payroll events via Single Touch Payroll (STP). STP has been around since July 2018 and has now evolved into STP Phase 2. Most software companies used by small businesses to file STP reports, are now STP 2-enabled, so many employers will be reporting payroll via this mode.
While the process of filing or reporting payroll via STP is fairly straightforward, there can be occasions where things may go wrong. This is particularly true now, given the setup for STP Phase 2 is quite involved and onerous. Should the setup for STP 2 not be done correctly, this will most certainly lead to filing errors.
If a pay event is returned after filing it, the ATO will provide an error code that describes the issue. While these codes are useful in terms of helping the lodger understand what is wrong, they do not assist in providing details about how to fix the error within the software you may be using. Luckily, there is help available from each of the main software providers.
Here is a list of the software providers and the links to their help pages, should your filing return an ATO error code:
Also, from Reckon, here is a list of the most common submission errors via the ATO. Each error code is explained and a reason behind the error is given. This can be a helpful starting point when trying to rectify any STP errors.
I hope this blog has been helpful to you if you are an employer or bookkeeper. It would be a good idea to add the link for your chosen software to your favourites list for future access, should you encounter an STP filing error.
The way new employees are onboarded is changing. Currently, employers ask new employees to provide a Tax File Number Declaration form, a Super Choice form, and also other personal information required in order to set them up in their payroll systems.
While this process is fairly straightforward, often employers find themselves chasing new employees for the data and at times, needing to confirm details that may or may not be correct (usually not correct in my experience!). This process can therefore be very time-consuming and tedious for employers, not to mention that the room for error is very high. It is also not a great deal of fun for new employees either!
This is an all-in-one onboarding form that new employees access from their myGov accounts. The form will provide both the ATO and the employer with all of the information required to set up new employees in one easy action.
Importantly,this form will replace several forms. These include the Tax File Number Declaration, the Super Choice form, the Variation to Tax Withholding Declaration, the Variation to Medicare Levy Declaration, etc. Employees can also use it to update their tax circumstances, for example, if:
their residency status has changed
they no longer have a government study and training loan
they are claiming the tax-free threshold from a different employer.
This change to employee onboarding will reduce the administrative burden for employers and increase process efficiencies. It will also reduce data recording errors which are very common when obtaining personal details from new staff members.
How the new onboarding process works
Firstly, the employer needs to provide his/her ABN to the new employees.
After submitting the form, the details will be sent straight to the ATO removing the requirement for employers to send completed TFN Declarations separately. It’s important to note that the changes to Single Touch Payroll Phase 2 have also made this possible i.e. every time a pay run is reported via STP 2, employees’ tax information is sent to the ATO. Although this step can now be removed from the onboarding process, employers must continue to receive completed TFN Declarations from new employees and retain them as part of the employees’ records.
Once the form is submitted, the employee will print the form and give it to the employer who will use the information to set up the employee in the payroll system.
It’s important to note that the downloadable version of the TFN declaration form will be removed by the end of2022.
The ATO is therefore requiring new employees to be onboarded using the new above process going forward. This is a new process that both employers and employees need to understand and adopt. It has benefits in terms of efficiency and data security and in my opinion, is the way forward.
What you can do to help yourself and/or your business
During the past 2 years of the COVID-19 pandemic, the ATO deliberately halted tax and super debt collection in order to assist businesses and taxpayers affected by the pandemic’s consequences.
But now they are back on the bandwagon. Debt collection has recommenced!
The ATO is clear that if you engage with them as soon as possible, they will try to work with you to help you manage your debts. However, and I quote:
So the message is don’t hide under a rock. The debt won’t disappear and the ATO will chase you to recover it. Instead, contact the ATO immediately and work with them to resolve the issues. They can’t help you if you don’t communicate with them. Your tax or BAS agent can do this on your behalf if you would prefer not to call the ATO yourself.
It is important to note that from July 2022, any tax refunds or credits will be automatically applied to any tax/super debt you may have, meaning that you may not receive any refund or a smaller refund than expected.
The ATO has various avenues of help for businesses or taxpayers experiencing tax/super debt stress. Some of these are listed below:
Applications for a Director ID will close on 30th November 2022. Have you got yours yet? If not, why not? Is it because you lack the confidence to use a computer or smartphone or the technology required? Have you been told that you need to have a myGovID to apply for a Director ID and don’t know how to get one or even what it is? Never fear, there are other ways to apply for a Director ID and these are explained below.
What is a Director ID? Just quickly, before we go on, for those not in the know, a Director ID is a unique number identifier that identifies you as being a company director to government authorities, shareholders, employees, consumers, creditors, external administrators, and regulators. The reason behind obtaining a Director ID is to prevent the use of false or fraudulent director identities i.e. director identity fraud. Read more information about the Director ID here.
So, when you visit the Director ID information page via the Australian Business Registry Services (ABRS) to learn about how to apply for the ID number, it will immediately begin by explaining that you need to have a myGovID account. A myGovID account is a digital identity that helps you prove who you are online by participating government online services. This is a good thing to have but if you aren’t ready to go down that road or can’t for some reason, you can actually apply for a Director ID by phone or by sending in a paper application – yep, that’s right, you can do it old school style! Read on to find out how!
Apply by Phone
To apply by phone, have the below data at hand, then call 13 62 50. Wait for the automated system to ask you to make a selection from the following and select option 1. Tell the operator that you wish to apply for a Director ID number. Supply the operator with the below data and when he gives you the ID number, record it. A copy will also be sent to you by mail or email – your choice.
Documents Required:
your tax file number (TFN)
your full name
your date of birth
your residential address as held by the ATO
two Australian identity documents – one primary and one secondary
Primary documents
Australian full birth certificate
Australian passport
Australian citizenship certificate or extract from a Register of Citizenship by Descent
ImmiCard
Visa (if you are using a foreign passport but are still in Australia)
Secondary documents
Medicare card
Australian driver’s licence or learner’s permit
Apply by Paper
To make an application via a paper form, you will need to call the ABRS on the same phone number as above i.e. 13 62 50,and ask for the form to be mailed to you. In addition to completing the form, you will also need to send certified copies of:
one primary and 2 secondary identity documents, or
2 primary and one secondary identity document.
Primary documents
Australian full birth certificate (extracts and commemorative certificates are not acceptable)
Australian passport (including passports that have expired in the past 3 years)
Australian citizenship certificate or extract from a Register of Citizenship by Descent
Foreign passport
Secondary documents
Medicare card
Australian driver’s licence or Australian learner’s permit. This must show your photo, licence card number and signature, and the address on the card must match the details on your application.
If you have changed your name, you must provide another document showing the change, such as a
marriage certificate
deed poll
change of name certificate.
Certifying your Documents
Copies of documents you provide to support your application must be certified as true and correct copies of the original document by an authorised certifier. To certify your documents:
photocopy them
ensure the copy and any photograph is clear and identifiable
take the copies and originals to an authorised certifier.
Authorised certifiers
The following people can certify copies of your original identity documents as true and correct:
Barrister
Solicitor
Medical practitioner
Judge
Justice of the Peace (JP)
Minister of religion (who is authorised to celebrate marriage)
Police officer
Bank, building society or credit union officer with at least 5 years of service
Sheriff’s officer
Commissioner of Declarations (in Queensland only).
A certifier should never witness documents:
for their family, business, clients, employer or any other person where it could create a real or perceived conflict of interest
connected with matters in which they have an actual or perceived personal or financial interest.
So there you have it – you can apply for a Director ID without having to set up a myGovID account. Of the two old-school methods above, I think phoning is the easier option as long as you have all of the documents and information in front of you before you call.
PS – I’m not against getting a myGovID account and in fact, I do advise that you try to get one eventually. However, I do recognise that not everyone is tech-savvy or has a smartphone, or if they do, may not be sure how to navigate it – it is certainly a learning curve and not that easy for some. Luckily, the government understands this too and is providing alternative options to those who may require more time to transition to the digital world.
This excerpt is taken from the ATO website via this link.
Have you taken on new employees? Did you know they can complete a TFN declaration through ATO online services?
This is an easy way for them to provide both you and us with the information we need. If your new employee has a myGov account linked to the ATO, they can:
access ATO online services
go to the ‘Employment’ menu
select ‘New employment’ and complete the form.
This sends the TFN declaration details straight to us so you don’t have to. Your employee will need your ABN to complete the form. Once they’ve submitted the form, they need to print it and give you the summary of their tax details so you can input the data into your system.
You may be able to link your payroll software to the online commencement forms. But check first with your software provider if they offer this service.
You can also use the New employment form to collect a range of information. Despite its name, you can also use this form instead of the:
Withholding declaration form
Medicare levy variation declaration form
Superannuation standard choice form.
Your employees can use the New employment form to update their tax circumstances with you, for example, if:
their residency status has changed
they no longer have a government study and training loan
they are claiming the tax-free threshold from a different employer.
You can continue to use your current processes, including providing a paper TFN declaration where employees can’t create a myGov account or don’t have access to the internet.
STP Phase 2 is in full swing. It began on 1st January 2022 but various accounting software have not been ready until recently. This means many employers are only just now learning about, and setting up their payroll systems, to comply with STP 2 requirements.
Unfortunately, as it is still relatively new, some employers are making errors when reporting via STP Phase 2. Recently, the ATO published a list of those mistakes it is seeing. I am highlighting them here so you can be sure to avoid them when you start to report via STP Phase 2.
Common STP Phase 2 Mistakes List
Breaking the continuity of year-to-date amounts from STP 1 reporting. Unless you are using the replacing IDs methodfor transitioning to STP 2, you need to ensure that you maintain the STP 1 data that you have already reported. Your accounting solution will help you manage this and you should contact your provider if you require assistance with this issue.
Selecting “not reportable to the ATO” when setting up pay codes/categories. Most payments to employees need to be reported except for:
1. Travel allowance below the ATO’s reasonable amounts
2. Overtime meal allowance below the ATO’s reasonable amount
3. Reimbursements
4. Post-tax deductions except for those you need to separately identify.
Omitting a cessation date and reason. When an employee leaves your business, you need to report the date he finished and the reason why he left. Your accounting solution will include these fields to complete upon termination. The ATO will share this information with Services Australia which means you will no longer need to complete a separation certificate for that employee.
Some income types you report for employees will also include a special country code. If you are required to report a country code, you must report the code relevant to that employee. Some employers are incorrectly reporting a “NA” country code, thinking that it means “not applicable”. It actually means “Namibia”. So if you use NA in your reporting, you are telling the ATO that your employee is either working:
1. Overseas in Namibia or,
2. Is in Australia and they are from Namibia.
Allowances. All allowances must be reported separately using one of 8 specific allowance categories. You must not simply report an allowance to the “Other Allowance” category (allowance type OD). You must report allowances using their appropriate category because each category is treated differently for tax, super and social security purposes. Only report an amount as Allowance type OD if it’s an allowance that does not belong in one of the 8 specific allowance categories.
Treating reportable super contributions (RESC) and salary sacrifice as the same thing. These are 2 different things and need to be reported correctly. Check out this ATO video which explains how to report these payments via STP 2.
Here is the link to the ATO webpage which provides more in-depth information about the STP 2 reporting mistakes listed above, including several helpful videos.
