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Time to Update Annual STP Authorisations and Engagement Letters
The new financial year is an excellent time to update your engagement letters and authorisations if you are not already in the habit of doing this annually.
As a professional accounting technician, having an engagement letter for every client is an important aspect of your practice or business.
Many disputes between business owners and bookkeeping businesses could be minimised or avoided altogether if an engagement letter was in place. Although it is not a legal requirement to have a letter of engagement, it is best practice to use this document.
An engagement letter protects you and your business, clarifies arrangements for your clients, explains services and scope of work, and sets out fees and terms.
It is a good idea to review engagements annually and adjust them where needed. It is quite common that services provided to clients change over time in response to their business needs, and this is a chance to document the added or changed services in your agreement formally.
Visit AAT -
for the engagement letter template you can use as a starting point. If you are a BAS agent, check the
TPB Letters of engagement for BAS agents
for more detail about essential elements to include.
Single Touch Payroll Annual Authorisation
Although the ATO has removed the micro quarterly reporting concession for STP, agents can still obtain an annual authorisation for eligible businesses.
The STP engagement authorises agents to lodge pay events with the ATO for a whole year rather than getting a separate authorisation for each pay event.
There are strict criteria for eligibility for the annual authority. The business must not have overdue statements, outstanding debts (unless covered by a payment arrangement), recent ATO PAYGW compliance activity, or directors with a Director Penalty Notice.
Remember that the annual authorisation does not include the finalisation process and that this lodgement must be authorised separately.
Visit AAT -
for the STP annual authorisation declaration and STP finalisation declaration.
ATO - STP Authorisations to act