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Chartered Accountants Australia and New Zealand has warned that the ATO’s Single Touch Payroll program will hurt business’ cash flow.
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CAANZ latest to criticise ATO's Single Touch Payroll
17 March 2015
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CAANZ's criticisim follows similar comments made by the Institute of Public Accountants last week.
In a submission on the ATO’s Single Touch Payroll Discussion Paper, CAANZ said it supports the policy objectives of the initiative but urged further design and development work be carried out. The chartered accountants also called for more business impact research on SMEs as well as a detailed implementation strategy for the sector.
Michael Croker, head of tax at CAANZ, said the main concern amongst chartered accountants is the proposal for PAYG withheld and super to be paid by businesses more frequently.
“Nobody disputes that PAYG tax and super is an employee entitlement and must be paid, the sooner the better. But this is an area where a desirable policy objective needs to take into account the fact that many SMEs struggle with cash flow.
"It takes more than 50 days on average for small business accounts to be paid and many are in a weak negotiation position with key clients,” he said.
Mr Croker said that if the current reporting and payment timeframes are to change, businesses will need an adequate adjustment period. Software is another key factor.
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“Single Touch Payroll will be available to those whose software supports Standard Business Reporting, but many businesses large and small are yet to embrace SBR,” he said.
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