Source : Perth Now news
Superannuation is set for its most significant change in decades but a week ahead of implementation, many businesses – and potentially the clearance system itself – aren’t ready.
From July 1, employee superannuation contributions must land in members’ accounts within seven days of payday instead of every quarter.
Australian Tax Office data suggests as many as two in five businesses already pay contributions more often than quarterly.
For Waterfalls Cafe and Gallery owner Rachel Power in Tasmania’s Mt Field National Park, the vagaries of regional tourism pushed her towards early payments well ahead of schedule.
“We’ve actually been paying super weekly for probably a year or two now, only because for cash flow we’re very seasonal here,” Ms Power told AAP.
“The market forces are pretty insane in Tasmania.”
Ms Power, who also runs accommodation and merchandising businesses, employs between 15 and 30 people, depending on the season.
As president of her local business group, she is concerned for operators who aren’t ready for the change.
“So many small businesses are going to get hit by this and they’re not going to be ready,” Ms Power said.
“Whereas having (accounting software) Xero, or even a program like Xero, these computer systems are there, ready to make it easy.”
While payroll technology was easing the transition, the seven-day deadline presented its own challenge due to the limits of payments clearance systems, Council of Small Business Organisations Australia chair Matthew Addison said.
“I’m concerned with the time it will take to get payments through the payment system and, if they’re rejected, to get those payments back,” he told AAP.
“I’m not convinced the ATO has systems that will give employers and their agents visibility of payday super data.”
The council wants all penalties scrapped for businesses working towards payday super for the first six months, particularly given the already strained business environment.
“I think there’s going to be a lot of confusion,” Mr Addison said.
“Many small businesses will say the system is not right yet, so they’ll bury their head in the sand and wait, and that would be potentially disastrous, because it won’t achieve the vision of payday super.”
For its part, the tax office has flagged a reasonable approach to compliance and vowed to support businesses in the early stages.
“We understand when something is new, you might not get it perfect the first time,” deputy commissioner Emma Rosenzweig said.
“But it’s important to start, have a go, give yourself as much time as possible to fix any errors as they occur.”
Research by Xero found roughly nine in 10 businesses supported payday super, but some were worried about late payments and cash flow management.
“We’re up against it in terms of the time now to be ready for those changes,” Xero’s ANZ strategy and operations executive general manager Charlie Sheppeard told AAP.
Businesses had to understand and tighten up their cash position, use digital tools to streamline payroll and super payments, and broaden their payment methods to maintain maximum cash flow, he said.
“If something goes wrong, do act fast,” Mr Sheppeard said.
“Talk to your accountant or your bookkeeper, your BAS agent.”
