Tax changes for your salon

Tax. It’s boring and it’s time-consuming and, mostly, it’s confusing. But you need to be on top of it to ensure your salon doesn’t fall foul of the Australian Taxation Office. With that in mind, there are some changes to the tax system coming into effect in 2020 that you need to be aware of from the outset.

AUSkey will be discontinued
According to the ATO, the AUSkey system, including the “Manage ABN Connections” service, will be discontinued from March 31.
While AUSkey was a reliable way to send business information to the government online, from April 1 you will need to use myGovID and Relationship Authorisation Manager (RAM) instead. While that may sound cumbersome and long-winded, the ATO is adamant that RAM will be a more secure, streamlined and flexible way to report information to the ATO.

Single Touch Payroll will go mainstream
The roll-out of Single Touch Payroll (STP) has started, and if you’re planning on launching your own small business and will have employees, it’s imperative that you begin reporting through STP.
If you have what the ATO classifies as ‘closely held payees’, such as family members working in your business, the ATO has given a deadline of July 1 to start reporting them through STP.  You can opt to report quarterly rather than at the time of their usual pay run.
If you have an existing business which has not yet started STP and does not have an exemption, there’s a good chance you’ll be contacted by the ATO. It’s recommended you switch to STP before the ATO starts issuing penalties.

Use of e-invoicing
Australian small businesses are owed $26 billion in unpaid invoices and 20 per cent of late payments are due to errors on invoices often associated with manual entry, according to the ATO. For a small business, e-invoicing can mean more cashflow and cost savings (the Government pays e-invoices within five days). It is estimated that e-invoicing will save the Australian economy $28 billion over ten years.

If you are unsure about any of these changes or want some guidance to ensure you’re on the right path, a chat to your accountant, or a representative from the ATO is recommended.

 

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