Boutiques and SME firms are due to benefit from the 2022-23 budget, as the Morrison government takes “decisive action” to provide increased cash flow support.
In a joint statement, Treasurer Josh Frydenberg, Minister for Employment, Workforce, Skills, Small and Family Business Stuart Robert, and Minister for the Public Service Ben Morton have revealed a number of measures and initiatives to “slash red tape and provide cash flow support for millions of small and medium businesses” as part of the 2022-23 budget.
These measures are set to generate an annual compliance saving of $800 million every year – and will boost the cash flow of over 2.3 million small businesses and sole practitioners.
According to the statement, “the government will set the GDP uplift rate that applies to pay-as-you-go (PAYG) instalments and GST instalments to 2 per cent for the 2022-23 income year. This rate is significantly lower than the 10 per cent rate that would have applied under the statutory formula”.
This will mean lower instalments and will result in $1.85 billion in cash flow injections for businesses in need post-pandemic. In addition, companies will also be able to calculate PAYG instalments based on financial performance. If financial performance declines, companies may be able to get refunds of instalments paid automatically.
The budget will also include new ways for SMEs to leverage technology to automate tax reporting requirements, reducing compliance costs, improving processing times and supporting cash flow management.
“The government will facilitate sharing of single touch payroll data with state and territory governments on an ongoing basis to cater for pre-filling payroll tax returns. This will facilitate further investments by states and territories in their own systems to improve lodgement accuracy, reduce compliance costs and save time for the approximately 170,000 businesses that have payroll tax reporting obligations,” the statement said.
“New South Wales, Victoria, Western Australia, South Australia, Queensland and Australian Capital Territory are already participating in a trial data transfer to understand how STP data can deliver benefits to their payroll-tax clients. The government is on track to complete its IT system implementation by late 2023.”
More to come.