ASFA criticises Single Touch Payroll plans

ASFA, ATO, Single Touch PayrollThe Association of Superannuation Funds of Australia (ASFA) has criticised aspects of the proposed Single Touch Payroll system.

Single Touch Payroll is a system for businesses to electronically report their payment obligations to the ATO, including PAYG withholding and superannuation. It was announced by the Government in September 2014.

Though the ATO website says the tax office has been consulting with the payroll and software industries since July 2014, ASFA says they have been advised that the ATO has actually been consulting on Single Touch Payroll for over two years.

“ASFA’s initial concern is that, despite acknowledging that the processing of employer superannuation obligations formed part of the project scope, it is only recently that an attempt has been made to engage formally with the superannuation industry with respect to this project,” ASFA said in a discussion paper sent to the ATO. The ATO had asked for comments and raised potential issues with Single Touch Payroll.

ASFA calls the proposed start date for Single Touch Payroll of 1 July 2016 “overly optimistic.”

A major concern of ASFA is the news that Single Touch Payroll may include PAYG withholding amounts on superannuation benefits. As the risk of superannuation funds defaulting on their withholding requirements is “negligible,” ASFA says “this expansion of project scope seems to be more about an earlier receipt of revenue than an attempt to resolve other problems.”

Also, at a time when large superannuation funds are implementing changes to SuperStream and Standard Business Reporting, including PAYG withholding for superannuation benefits in Single Touch Payroll “would add an unacceptable level of risk to the implementation of these current large scale industry projects.”

“ASFA urges that no firm commitment be given to including superannuation fund withholding payments in the Single Touch Payroll projects scope until extensive and detailed consultation has been undertaken with the superannuation industry and a full cost benefit analysis has been undertaken.”

ASFA also says that Single Touch Payroll should be “subject to further rigorous analysis,” including the scope of the project.

Though ASFA has concerns around the extent and implementation of Single Touch Payroll, it “has the potential to significantly reduce red tape costs and other business costs associated with payroll providing what is delivered provides a comprehensive payroll processing solution.”

“However, it also has the potential to produce both costs and benefits for other entities,” said ASFA.

Update: The Government has announced that the start date for Single Touch Payroll will be pushed back.

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