Tips for setting your business up for a successful 2021

Andrew Watson, Australian Taxation Office

With 2020 behind us, it’s time to turn our attention to 2021. Many businesses are still suffering the effects of last year’s natural disasters and the COVID-19 pandemic, which are likely to be a consideration for the foreseeable future.

We want small businesses to have the information and support they need to get back on track and thrive. The following are some tips to help your business in 2021.

Embrace digital

We know from research that businesses who are digitally engaged perform better. When tax and super obligations are integrated into natural business systems, business owners and their advisers have better information and more time back in their day to grow, improve, and expand their business. With this in mind, we are committed to continuously improving our digital and data services for business.

This year we’ll be rolling out a new service – Online services for business. This will replace the Business Portal and make it easier for businesses to interact with us online and at a time that is convenient for them. Online services for business will deliver users a range of new functions that are not available in the Business Portal, such as creating payment plans, viewing and printing their income tax return histories, and switching between businesses within a single login.

Online services for business has undergone extensive user testing to make sure it meets users’ needs. A private beta is currently underway, and we will let businesses know when this service is available for everyone to use. We will support businesses through this change by providing a transition period before we remove access to the Business Portal.

Keep up with your tax obligations

It’s important to lodge your activity statements and tax returns on time, even if you can't pay by the due date. This will show us that you're aware of your obligations and doing your best to meet them.

If you’re worried you won’t be able to pay on time, or you’ve already missed a due date, contact us as early as possible to discuss your situation as we have a range of options to support you. For more information visit ato.gov.au/helpwithpaying.

If you're having difficulty meeting your tax and super obligations because of COVID-19, we’re here to help. Contact our Emergency Support Infoline on 1800 806 218 or speak with a trusted tax advisor. For more information visit ato.gov.au/COVID-19.

Report all income and sales

We know that 2020 was complex for small businesses, with decreases in sales, changing service offers and restrictions likely to have effects for some time to come. Businesses struggling to get back on their feet might be tempted to engage in behaviours such as under-reporting income, assisted by electronic sales suppression tools (ESST).

ESSTs can be used to manipulate sales records, enabling a business to under-report their sales income and avoid paying the right amount of tax. The government banned the possession and use of ESSTs in October 2018.

You may have an ESST if your point of sale (POS) system can manipulate records during or after the transaction, for example, if it can:

  • permanently delete and re-sequence transactions
  • change transactions to reduce the amount of a sale
  • misrepresent records, like re-categorising a product to avoid GST
  • produce fake records.

ESST suppliers may prey on vulnerable businesses during this time. It’s also possible that businesses might already have an ESST installed in their point of sale software and not know it.

If you have an ESST, or think you may have used one unknowingly:

  • contact your POS system provider and ask them to remove the ESST
  • review the information you have reported on past tax returns and activity statements to make sure it is accurate.

It’s important to note that fixing a mistake in a record retained by the system is okay – it’s not the same as manipulating records.

We will continue to support small businesses who do the right thing by tackling the use and supply of ESSTs in order to maintain a level playing field.

If you suspect a person or business is producing, supplying, possessing, using or promoting an ESST, report it at ato.gov.au/tipoff

You can find more information about ESSTs, including what to do if you think you have an ESST, at ato.gov.au/esst

Stay on top of your superannuation (super) obligations

The superannuation guarantee (SG) is the minimum super an employer must report and pay:

  • for each eligible employee
  • at least four times a year – by 28 October, 28 January, 28 April and 28 July
  • electronically, to meet SuperStream requirements
  • to a complying super fund.

You must pay super on top of wages for any employee you pay $450 or more (before tax) in a calendar month.

Currently, the minimum you must pay is 9.5% of an employee’s ordinary time earnings (OTE). OTE is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments.

You can use the ATO's SG contributions calculator to help you work out how much super you must contribute for your eligible workers at ato.gov.au/Calculators-and-tools/Super-guarantee-contributions/

You can claim a tax deduction for super payments in the financial year you make them – but only if you meet the SG requirements.

Extending super fund choice

A change to the law means that you may need to offer your employees more choice in the fund you pay their compulsory super contributions to.

All workplace determinations and enterprise agreements made on or after 1 January 2021 must give employees the right to choose their super fund. Once a new determination or agreement is in place, you’ll need to give a Superannuation (super) standard choice form to:

  • existing employees who request to choose their super fund
  • all new employees.

You must then pay employees’ compulsory super to their nominated funds.

Visit ato.gov.au/offeringchoice for more information.

The JobMaker Hiring Credit

The JobMaker Hiring Credit was announced by the government on 7 October 2020 to support new employment of young people. Eligible employers will be able to claim:

  • $200 per week for each additional eligible employee they hire aged 16 to 29 years old, and
  • $100 for each additional employee aged 30 to 35 years old.

New jobs created until 6 October 2021 may be eligible for hiring credits for up to 12 months from the date the positions were created.

New employees must have received the JobSeeker Payment, Youth Allowance (other), or Parent Payment for at least one of the previous three months at the time of hiring. Their employer will be able to claim the hiring credit as a reimbursement for the wages paid to their eligible employees.

You can register for the JobMaker Hiring Credit through ATO online services, the Business Portal or your registered tax or BAS agent can do it for you from 7 December 2020.

You can claim the hiring credit quarterly in arrears from 1 February 2021. You will need to report through Single Touch Payroll and meet the eligibility criteria.

 

For more information go to ato.gov.au/jobmakerhiringcredit

Andrew Watson is an Assistant Commissioner for the Australian Taxation Office in the Small Business line. He collaborates with small businesses, industry groups and government agencies to shape the client experience and drive improved digital services. His area also helps small businesses manage cash-flow and digital readiness.