Lodgment program framework - online survey results 2015
The ATO Corporate Research Centre was commissioned to conduct research to increase understanding of tax agent perceptions and identify irritants with the Lodgment program framework.
Registered tax agents and BAS agents (registered agents) play an important role in meeting tax and superannuation lodgment obligations of taxpayers. To help manage these workloads, registered tax agents are provided with a program that accommodates progressive lodgment of documents over a 12-month period.
The framework differentiates between the lodgment performance of registered agents. It is based on demonstrated lodgment performance and recognises agents who have good practice management, lodge electronically and are consistently on-time.
The lodgment program framework aims to increase the number of returns lodged on-time and electronically. Practitioners can benefit from concessional due dates under the program.
To receive the benefits of the lodgment program, tax practitioners are required to:
- lodge their clients’ income tax and FBT returns electronically, and
- lodge at least 85% of their clients’ current income tax returns and FBT returns on-time.
The benchmark of 85% was developed in consultation with the Lodgment Working Group and professional association representatives.
Results of the framework
Since the introduction of the Lodgment program framework in 2012, there have been a number of improvements across the profession:
- On-time lodgment of individual tax returns by tax agents increased to 85.8% for 2012-2013 returns, up from 81.5% for 2010-11 returns.
- On-time lodgment of all income tax returns increased from 78.7% for 2010-11 returns to 81.7% for 2012-13 returns.
- The number of tax agents lodging exclusively by paper for 2012-13 returns reduced by 29% (2,868 to 2,038) from the previous year.
- Overall electronic lodgment of income tax returns by tax agents increased by 0.2% to 99.2% from the previous year.
The research was conducted from 27 January to 10 February 2015 with 2,313 tax practitioners randomly selected and invited to complete an online survey.
Agents were represented across these demographics:
- geographic location
- practice size/agent tier
- on-time lodgers (achieving the 85% benchmark) and non on-time lodgers
- professional association membership
- time in practice
- electronic and non-electronic lodgers.
There were 549 participants who fully completed the survey, which is a 28% response rate. They were asked to rate their satisfaction and support of the Tax Agent Lodgment Program Framework's:
- requirement to lodge Income tax and Fringe benefits tax returns electronically
- requirement to lodge 85% or more of their clients’ current year returns on-time
- aim to improve on-time lodgment and promote a level playing field for agents
- best or worst attributes and give suggestions for improvement.
Participants were also asked about the ATO assistance offered, their preferred communication channels and any changes they have made as a result of the Tax Agent Lodgment Program Framework.
Key insights from the research findings
On the lodgment program framework intent and 85% on-time benchmark
- 79% of respondents supported the intent of the framework and 81% agreed that it aimed to improve on-time lodgment.
- Participants valued the fact that the Lodgment Program provides increased time to lodge and noted that it encouraged on-time lodgment.
- 64% of respondents agreed that the Lodgment Program aimed to promote a level playing field in the profession.
- Some agents who disagreed with the above statements felt that the framework doesn’t take into account that agents are not a homogenous group, with various client types/practice sizes and specialised services.
- 55% were satisfied with the 85% on-time lodgment requirement, 24% were dissatisfied and 21% were neither satisfied nor dissatisfied.
On electronic lodgment
- 83% of respondents were satisfied with the requirement to lodge electronically.
- The cost of software was the most cited reason for dissatisfaction.
On ATO support and changes in their practice
- 89% of respondents indicated that they had used some of the various types of assistance offered by the ATO.
- Requests for lodgment deferrals were the mostly commonly used form of assistance, followed closely by requesting performance summaries to track their on-time lodgment performance.
- 84% of participants have experienced a change to their practice management, with the most common experience having to follow up with clients more (68%).
- Other common experiences that showed a change to the practice management included, reviewing client lists more regularly, refusing work for non-paying clients, removing clients who do not respond to multiple contacts and turning away work to focus on lodgments.
- Most agents prefer for the ATO to advise them of changes to the Lodgment Program by using the Tax Professionals Newsletter and Broadcast. There was also support for emails directly to the agents.
On improving the Lodgment program framework
- Respondents noted that the best part of the Lodgment Program was the ability to spread out their workload and the extended due dates for lodgment. In addition, some considered the framework provides a guideline in which to aim to manage their client base to lodge on-time.
- The worst part of the Lodgment Program was the 85% lodgment requirement. Respondents noted reasons for their view being, difficult to achieve, too inflexible, not having a clear understanding of how it is calculated and the lack of clarity around the type of consequences if the 85% requirement is not met.
- On improving the Lodgment Program, analysis showed a theme relating to the 85% lodgment requirement with suggestions including; providing flexibility with lodgments based on circumstances, reducing to an 80% benchmark, leaving it as it is as there is ‘nothing to improve’ and removing it altogether.
- A frequent suggestion was having a more flexible deadline for clients (particularly new clients) with multiple outstanding returns.
- There is a high correlation between agents who are on-time lodgers and satisfaction with the 85% lodgment benchmark.
- On-time lodgers (69%) were almost twice as likely to be satisfied compared to non on-time lodgers (36%).
- High bulk agents (greater than 1,000 individual clients) were more likely to be satisfied than agents from small practices.
- Agents dissatisfied with the performance standard mostly commented on the need for flexibility to take into account individual circumstances and the 85% rate as being too high or difficult to achieve.
- On-time lodgers were significantly less likely to request lodgment deferrals and were more likely to take advantage of ATO seminars, forums or field visits.
- Agents in rural areas were also more likely to take advantage of ATO interactions than their counterparts in the CBD or inner metro areas.
- High bulk agents were more likely than small practices to take advantage of the ATO bulk client list deletion service.
How the research has been used
The following initiatives have been co-designed with the ATO Lodgment Working Group to address concerns raised by practitioners to improve the operation of the framework.
Results of a survey conducted with tax agents on their perceptions of the Lodgment program framework in 2015.
- Managing clients with overdue returns - In October 2014 we introduced an initiative to make deferrals available for the current year income tax return to manage new or returning clients with multiple overdue returns.
- Suspension of action on overdue lodgments - We are proposing to promote the availability of ‘suspension of lodgment compliance activities’ on prior year returns, as the tax agent seeks to bring clients’ obligations up to date. This is currently work in progress.
- Deferral application forms - A new lodgment deferral application ‘smart form’ was launched on our website on 27 November 2014. The new form provides more guidance on how to complete the request, reducing the need for follow up contact and delays in processing requests.
- Performance summary - The Lodgment program on-time performance summary has been re-designed with a focus on encouraging continued improvement. The summary now shows a comparison of the practices’ previous on-time performance, instead of a comparison with the agents’ peers.
- Lodgment program framework treatment matrix - The Lodgment program framework treatment matrix has been updated to provide more guidance around what agents can expect to happen if they do not meet the 85% performance benchmark. The information outlines ranges of lodgment performance and the subsequent treatments.