Recommendation 2.1

The IGT recommends the ATO:

  1. clarify the protection provided to those who use and rely on the Employee Contractor Decision tool in good faith, promote the tool and allow it to be used by employees and contractors as well as accompanying the result with links to information outlining their respective rights and obligations; and
  2. implement and promote a Voluntary Certification System which employers, employees and contractors may use, as soon as possible, to confirm worker status and refer them to information about their respective rights and obligations once their status has been determined.

Recommendation 3.1

The IGT recommends that, in relation to Single Touch Payroll, the ATO:

  1. apply the learnings from the implementation of SuperStream and, in particular, ensure that there is rigorous testing of third party software with certification being provided to those that meet all requirements;
  2. seek to reduce employers’ reporting requirements by using the information obtained to prefill fields;
  3. ensure that there are appropriate exemptions at least in the short-term whilst exploring the possibility of providing:
    1. a low or no cost software for qualifying small employers; and
    2. an alternative method of electronic access for employers facing technological challenges, through such means as e-kiosks.

Recommendation 3.2

The IGT recommends that the ATO consider developing a capability for the Small Business Superannuation Clearing House to receive:

  1. electronic files, such as Microsoft Excel and Apple Numbers; and
  2. standardised files from commercial payroll software.

Recommendation 3.3

The IGT recommends that the Government considers reviewing the Fringe Benefits Tax regime with a view to delivering a reduction in compliance costs in the short to medium term as well as longer term fundamental reform.

Recommendation 3.4

The IGT recommends that the Government considers expanding the Taxable Payment Reporting System (TPRS) to the engagement of contractors across all industries and automating the required reporting under TPRS.

Recommendation 4.1

The IGT recommends that the ATO:

  1. improves its PAYGW and SG risk identification process by analysing the utility of data from third party referrals with a view to maximising the use of sources which yield the best results;
  2. improves its SG risk identification process by:
    1. encouraging trustees of APRA-regulated superannuation funds to refer more relevant data; and
    2. obtaining SuperStream payment data from superannuation funds for employers not required to use STP to promptly identify those not reporting or paying SG.

Recommendation 4.2

The IGT recommends the ATO seeks further means of ensuring superannuation entitlements are paid promptly including the use of deterrents, such as random audits, to curtail the propagation of non-compliance - compliant employers who undergo such audits should be reimbursed for any additional costs.

Recommendation 4.3

The IGT recommends the ATO publicly announce its areas of FBT compliance focus for future year(s).

Recommendation 4.4

The IGT recommends the ATO supplement the principles contained in its ‘Our approach to information gathering’ booklet with practical guidance, such as common scenarios in training materials, to assist compliance staff to apply them in the context of an employer obligation audit or review.

Recommendation 4.5

The IGT recommends the ATO enhance its capability development framework and compliance support tools with respect to employer obligations and Personal Services Income compliance activities by:

  1. improving the relevant training packages on the employee/contractor distinction;
  2. ensuring that staff are assessed following completion of relevant training packages;
  3. monitoring the results of quality assessments over time to identify recurring capability issues with a view to improving training and procedures; and
  4. improving the documentation in the ‘reasons for decision’ templates, by requiring an appropriate assessment of the application of the law to the facts of the case.

Recommendation 4.6

The IGT recommends the ATO increase employers’ awareness of its differentiated approach to non-compliance with SG obligations and assess the utility of this approach by analysing the results obtained from measuring its effectiveness.