As a business owner, understanding your tax obligations and having efficient processes in place to meet these obligations gives you more time to concentrate on running your business.
To assist with this, the Australian Taxation Office (ATO) has provided some updates on changes for 2020 and has some key tips for staying on top of everything.
AUSkey retiring & your new key to business
The way you access the ATO’s Business Portal is changing. From the end of March 2020, you won’t be able to use AUSkey – it’s being replaced because it hasn’t kept up with modern technology. This includes Manage ABN Connections, so if you’re accessing the Business Portal using your myGov details you’re also impacted.
You will need to start using:
• myGovID – which is the Australian Government’s digital identity provider and a new way to prove your identity online.
• Relationship Authorisation Manager (RAM) – an authorisation service that allows you to act on behalf of a business online when linked with your myGovID.
If you or your staff use the Business Portal, you’ll need to set up your myGovID and link your ABN using RAM. You need to register to use these by the end of March 2020.
You can read more and access our helpful factsheets at ato.gov.au/mynewkey
Single Touch Payroll
If you’re an employer, one of the biggest changes for your business was the introduction of Single Touch Payroll or STP in 2019.
STP is a new way of reporting tax and super information to the ATO, delivering benefits for both employers and employees by streamlining payroll processes and providing greater visibility for the ATO in relation to unpaid super or late payments.
You should be underway with your STP reporting by now. If not, it’s not too late if you missed the 30 September 2019 start date, but time is running out. You can talk to the ATO or a registered tax or BAS agent for help getting started.
Record keeping and cash flow
One of the elements underpinning a business’s success is accurate and complete record keeping that enables you to:
• be in a good position to assess your cash flow
• more easily meet your tax, super and employer obligations
• identify small issues before they become big ones.
The ATO’s Record keeping for business information resource will help make it quicker and easier to find and understand what you need to know and do to meet the legal record-keeping requirements for businesses. That way you can focus more time on the success of your business.
Making sure you have good cash flow will help keep your business going and ensure you have money for those unexpected business expenses. The ATO suggests all businesses prepare a cash flow projection as part of their planning and refer to it regularly.
Thinking about purchasing assets for your business?
If you’re thinking of purchasing new or used assets for your business, there have been changes to the instant asset write-off, which may benefit you if your aggregated turnover is less than $50 million. The instant asset write-off threshold has been increased to $30,000 and extended to June 30, 2020.
This means you can purchase and claim a deduction for multiple assets provided each asset is under the threshold and is used or installed ready for use.
To make sure you take full advantage of the instant asset write off, check the ATO’s website for more information.
Introduction of e-invoicing
E-invoicing is the exchange of invoices between buyers and suppliers. It’s faster, easier, and cheaper to create e-invoices, and can save you time and money.
E-invoicing reduces rekeying and associated errors, and you won’t lose your e-invoice, so you’ll always be on top of your record keeping requirements.
It’s also reassuring to know that e-invoicing is a secure method of processing your invoices, reducing the risk of falling victim to a scam.
E-invoicing will be available this year, so be on the lookout for software solutions that will save you time and money when dealing with your trade partners.
To get ready for invoice, and read more about how it will benefit your business, visit www.ato.gov.au/einvoicing
When it comes to managing your tax and super there is always support available. If you’re struggling to manage your financial commitments or getting behind with your tax, contact the ATO as early as possible to find a solution. Visit the ATO support page (ato.gov.au/sbsupport) for more information.
To help you keep up to date, subscribe to the ATO’s Small business newsroom and get regular updates on tax and super news. Subscribe now at ato.gov.au/sbnews