Small businesses are set to be contacted in the month of September by the Australian Business Register. According to reports the sample size of small businesses to be contacted is close to 8 million. As per the ABR, the objective is to ensure that details on the register are up to date. Questions may be asked regarding the business activity and the use of the ABN by the small business owner. When we look at these actions along with a raft of other measures, they all tend to have one focus: The black economy.
The contact is to confirm with accountants and their clients about the accuracy of business information on the ABR, discuss their understanding and usage of the ABN, survey their registration experience and confirm their entitlement to the ABN. An ABN will not be cancelled automatically unless the client or the accountant asks for the ABN to be cancelled.
Currently, ABN holders are able to retain their ABN’s regardless of whether they meet the obligation of income tax return lodgment or updating of ABN details. The future landscape shall require clients to confirm their ABN entitlement annually and also make it mandatory to lodge tax returns on ABN incomes to retain ABN’s.
In the budget of 2019-20, based on the Black economy taskforce’s recommendations, the government sought to make transactions entered into cash that are in excess of $10,000 be made illegal. If you add to the above mix, STP (single-Touch-Payroll), TPAR (Taxable Payments Annual Reporting for Cleaners, Couriers, IT, construction Trades), Software driven live reporting via e-invoices whereby a report of invoices issued gets sent to the tax office directly from your software issuing invoices then you have a situation where the whole compliance landscape is changing dramatically.
There will be a push for small businesses to embrace technology and new software and new software providers meeting compliance objectives. While technology should have made the costs of compliance go down but given the new reporting standards that will be introduced, the costs of compliance may inadvertently go up.
Long gone are the days when you could pay $500 for standard software that will do the job every year with a small update. Small business owners now need to pay for multiple subscriptions with software providers who shall charge a monthly fee that will do all of the above.
These changes are to ensure that ABN holders will be held more accountable for meeting their obligations in the future while at the same time minimizing the regulatory impact on businesses that are doing the right thing.