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  • Tax professionals: the big picture

    Find out how we work with and for tax professionals:

    Working with tax professionals

    We are committed to making it as easy as possible for tax professionals to work with us and help their clients. Last year, 74% of individuals and 95% of businesses lodged their tax returns through a tax professional.

    Our message to individuals and businesses is clear and promotes choice – either self-prepare or use a registered agent.

    We have a dedicated focus on:

    • providing tax professionals with the right information when they need it
    • maintaining and enhancing our relationship with tax professionals.

    Working with you and your profession

    Support for tax professionals includes:

    • face-to-face open forums
    • livestream webcasts
    • weekly newsletters
    • social media channels
    • providing speakers for events and discussion groups.

    This year over 350 tax professionals have been consulted on more than 20 different matters including:

    • Single Touch Payroll
    • the future of the tax profession
    • the financial planner experience
    • real time analytics for tax practitioners
    • communication preference.

    Consultation

    There are two main consultation groups that include members from the professional associations and individual agents – the Tax Practitioner Stewardship Group and the BAS Agent Association Group. These groups meet 3 to 4 times a year.

    We deliver 45 Open forums every year across the country. These forums provide you with an opportunity to raise questions and have open discussions about our latest updates and changes. The forum's current focus is Single Touch Payroll and online services for agents, including the practitioner lodgment service (PLS).

    Our Public advice and guidance community on Let’s Talk hosts collaborative discussions with tax and legal professionals to provide feedback and share ideas. This feedback helps shape advice and guidance solutions on issues important to the tax community, and helps us ensure existing products work.

    We encourage tax professionals to regularly visit Let’s Talk and the consultation pages on our website for current consultations and how they can help.

    See also:

    Using technology to enhance interactions

    We’re co-designing new products and services with the tax profession to cater for a modernised tax landscape.

    Over six million taxpayers interact with us online and more than 98% of individual income tax returns are lodged electronically. We are introducing new digital systems and services for better resilience, capability and performance.

    Online services for agents

    A recent comparison of our digital services with 15 other tax revenue agencies found we offer the best online service for agents. However, we have listened to feedback on issues with existing portals and are refining functionality through a new, modern and intuitive platform.

    Online services for agents is a more stable platform designed to replace aging technology. The new services are currently in a limited testing phase and offer a greater number of services to tax practitioners, including:

    • the ability to set up payment plans for outstanding debts,
    • access to more client information.

    We are also making available similar functionality to digital service providers to include in their software.

    Once Online services for agents is released, the existing portals will remain available to enable agents to transition to the new service gradually.

    While we transition to the new services there may be times when our systems is unavailable, slow or experiencing unexpected issues. We offer support services to you and your clients to ensure you aren't disadvantaged by any disruption.

    Practitioner lodgment service

    Tax Time 2018 is the first year that the practitioner lodgment service (PLS) is the sole electronic lodgment channel for tax agents to lodge current year individual income tax returns. As at October 2018:

    • over six million returns were successfully lodged through PLS
    • more refunds were received within five business days for clients of tax agents using PLS compared to for self-prepared returns.

    We’ve developed a PLS dashboard to give tax professionals visibility of:

    • what is and isn’t working
    • planned maintenance
    • response times.

    We partner with tax professionals to improve our digital services and continue to address irritants.

    See also:

    Single Touch Payroll

    Single Touch Payroll (STP) is a reporting change for employers that allows them to report payments at the same time they pay their employees. We’re collaborating with you to deliver it.

    From 1 July 2018, STP reporting became mandatory for employers who had 20 or more employees on 1 April 2018.

    Employers with 19 employees or less can choose to report through STP at any time. Legislation is currently before parliament which may make smaller employers report through STP from 1 July 2019.

    Changes STP will deliver

    Employers will report payments such as wages, PAYG withholding and super information to us via their payroll solution at the same time they pay their employees.

    Some employers may need to update their payroll solution (accounting software) or choose STP-enabled software to report to us.

    Super funds will be required to report the payment of super contributions more frequently. Together with STP, this will give us better visibility of unpaid super.

    We know many employers will want to discuss these changes with a registered tax or BAS professionals, so we are working together to deliver the transition to STP.

    How we manage debt

    We want to prevent debt where possible and make it easy for tax professionals and their clients to meet their obligations.

    If a debt arises, we want to engage with the taxpayer or their representative early to help them manage it.

    This includes helping you and your clients by:

    • working with accounting and bookkeeping professional associations and firms to roll-out the Cash Flow Coaching Kit to small businesses across Australia through their trusted advisor
    • replacing the tax agent and BAS agent portals with new online services for agents, a system which has been co-designed with tax and BAS agents to improve your experience and includes a range of new features
    • improving our website to make it easy to find what you’re looking for and simple to understand
    • delivering more dedicated communications to tax professionals on payment and debt processes
    • co-designing shareable resources with tax professionals
    • regular Open forums and Key Agent visits.

    It's important we all work together to encourage taxpayers to contact us if there is an issue and deal with things before they escalate. We can help tax professionals’ clients with a debt through:

    • tailored payment plans
    • release from payment in cases of serious hardship.

    Recent reviews by the Inspector-General of Taxation and the Australian National Audit Office found no systemic issues and we continue to improve and refine our approach in line with the recommendations of these reviews.

    If clients get into debt

    A client’s experience will depend on their tax circumstances and previous payment behaviour. Two clients with a debt may experience different approaches, including:

    • early action – we engage early to support and assist taxpayers address a debt while it is manageable
    • firmer action – for the minority that don't engage, we take timely firmer action to prevent unfair financial advantage
    • stronger actions – we may take stronger legal action to recover a debt, exercising the same rights available to any other creditor.

    Working with collection agencies

    We refer some debts to external debt collection agencies for collection on our behalf. It's important to remember:

    • we do not sell the debts and they always remain payable to the ATO
    • we do not pay external collection agencies a commission – they are paid on a fee-for-service basis
    • we make sure they provide a professional service and their negotiations with clients should be of the highest quality
    • external collection agencies use taxpayer nominated contact details and should only contact the taxpayer or their nominated representative between 8:00am and 8:00pm Monday–Friday.
    • external collection agencies do not undertake legal recovery. Once a debt is referred to a collection agency the referral will usually stay with them for 90 days. They will contact the taxpayer or their nominated representative to seek payment or entry into a payment plan. If that does not occur the debt is returned to the ATO and we continue collection action.

    Support and assistance

    We recognise taxpayers can experience challenging economic conditions, mental health issues or unexpected events. We will look at your client's situation and work together to find a solution.

    We can offer a range of options including:

    • remitting penalties or interest charged during the time your client has been affected
    • offering payment plans tailored to your client's individual circumstances, including interest-free periods
    • releasing your client from some or all of a tax bill when certain criteria are met.

    In 2017–18 we negotiated 1.1 million payment plans, an increase of 150,000 from the previous year. Of this, 790,000 were for small businesses.

    For taxpayers experiencing serious hardship we gave full or partial release from payment in 2,174 cases.

    Records for April 2018 show we have 4,300 disputes on hand – 0.0003% of all taxpayers. Less than 5% of these have recovery action underway. In recent years we have:

    • increased the amount for payment plans via our automated phone service from $25,000 to $100,000
    • accepted direct debit payment plans over the phone from tax agents or authorised representatives where there is no existing direct debit request authority
    • enabled sole traders to set up plans to pay debts up to $100,000 via ATO online for both income tax and activity statement debts.

    Managing disputes and settlements

    The number of appeals to the Administrative Appeals Tribunal (AAT) against our decisions dropped more than 60% in five years – from 922 in 2013–14 to 342 in 2017-18.

    Our approach has meant that:

    • 85% of tax litigation decisions in 2016-17 were favourable to us.
    • 30% reduction in the time taken to resolve a dispute since 2016-17.

    In 2017–18:

    • more than 36.5 million returns were lodged
    • 361,107 (1%) adjustments from audits were made
    • 24,350 (0.07%) objections were received
    • 478 (0.001%) cases were lodged to courts/tribunals
    • 102 (0.0004%) cases proceeded to decision.

    We have a number of services to help resolve disputes, which tax professionals can recommend to their clients, including:

    • free in-house facilitation
    • a test case litigation program
    • dispute assist
    • settlement.

    The recent Australian National Audit Office (ANAO) report found the ATO is effective, comprehensive and fair in using settlements to resolve taxpayer disputes.

    The use of settlements as a form of alternative dispute resolution is part of our commitment to earlier and more effective dispute resolution.

    Free in-house facilitation service

    In-house facilitation is a free mediation service for less complex disputes. It can be requested by taxpayers, their representatives, or their ATO case officer.

    In 2017–18, we received almost 250 referrals for in-house facilitation from individuals and small business taxpayers, almost twice as many as received in 2016–17. Nearly all of our free in-house facilitations in 2017–18 were able to partially or fully resolve the dispute.

    Test case litigation

    Our test case litigation program provides financial assistance to taxpayers where litigation outcomes will clarify the law and develop legal precedent where there is an issue that:

    • requires law clarification
    • affects a significant section of the public
    • has considerable commercial effects for an industry.

    Dispute Assist

    Dispute assist is a new, free service supporting unrepresented individuals and individuals in businesses where significant personal circumstances have contributed to their dispute. The service provides an independent, experienced disputes guide, who provides support and assistance through the process.

    What attracts our attention

    We want to provide appropriate guidance to taxpayers on the behaviour we expect of them, and what behaviour would raise concern. We've used the 'safe to swim between the flags' or 'safe harbours' concepts in recent years to help taxpayers understand our expectations.

    Law companion rulings and Practical compliance guidelines are available for more guidance.

    Law companion rulings

    Law companion rulings (LCR) are released as soon as the Bill becomes law. They give certainty on our view of the law at the earliest stage. Public rulings are binding advice, they express our interpretation of the laws we administer.

    To be protected by an LCR, you must have relied on it in good faith. If you rely on a LCR in good faith, you will be protected (as a normal public ruling) in relation to underpaid tax, penalties or interest.

    Practical compliance guidelines

    These go beyond our usual interpretation of tax law. They provide useful insights into practical implications, and our administrative approaches, and contain clear statements of how they can be relied upon by taxpayers.

    They are similar to ‘flags on the beach’ and clearly outline a range of low-risk behaviours that are unlikely to attract scrutiny.

      Last modified: 26 Oct 2018QC 57214