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  • Consultation Steering Group key messages 22 July 2020

    Key highlights

    • Members were extremely positive about their experience with consultation on COVID-19 stimulus measures noting the ATO’s agility, pragmatic approach, appreciation of taxpayer circumstances, speed of response, sharing of information and willingness to discuss the ‘hard’ issues.
    • The ATO acknowledged the support provided by the tax profession to identify emerging issues related to the Government’s stimulus measures.
    • Members noted that the Treasury consultations on JobKeeper were excellent.
    • Insights from the ATO Stewardship Group Co-chairs meeting of 30 March 2020.

    Introduction and opening comments

    Deborah Jenkins, Acting Second Commissioner, Law Design and Practice, ATO; Michelle de Niese, Corporate Tax Association

    Co-chair Deborah Jenkins opened the Consultation Steering Group (CSG) meeting and welcomed members. Deborah Jenkins noted that this was her first meeting as ATO Co-chair and reiterated that the focus of this Group is on the governance of consultation processes.

    Deborah Jenkins acknowledged that concerns have been raised about the confidentiality of information discussed in Stewardship group meetings. Recently a Stewardship group requested that members sign confidentiality agreements, but members raised their concerns about this approach. Deborah Jenkins noted that the new standardised charter for Stewardship groups outlines that members are expected to maintain the confidentiality of information as required and are not authorised to disclose information that was discussed or provided at a Stewardship group meeting which is declared confidential, or which they ought to reasonably know is confidential, without the prior written approval of the co-chairs.

    Co-chair Michelle de Niese noted that the next period of consultation will be particularly important but also difficult. We all need to ensure that the consultation processes for the proposed changes to JobKeeper benefit from positive methods and experience, i.e. the agility and practical approaches that the ATO and Treasury have taken.

    COVID-19 Stimulus Measures

    All members

    The ATO provided a paper that outlined the ATO’s consultation activities about the COVID-19 stimulus measures. The focus of this discussion was for members to provide reflections from their representatives on the consultation activities that occurred for COVID-19 stimulus measures and to identify opportunities for system wide improvements or approaches that are better practice.

    Members were extremely positive about the consultation experience noting the ATO’s agility, pragmatic approach, appreciation of taxpayer circumstances, speed of response, sharing of information and willingness to discuss the ‘hard’ issues. Members noted that the advice and guidance products reflected issues or concerns they raised. If the issues were not reflected it was still acknowledged and the reason why the matter was not included was explained. Members felt trusted and listened to. Members would like this approach to continue. The ATO acknowledged this feedback and noted that delivering at this level has had an impact on staff and other priorities, and there is a need to balance this with appropriate pace and agility to ensure sustainability.

    Members noted that engagement and discussion at the strategic level with the National Tax Liaison Group (NTLG) was extremely positive and beneficial with the collaboration of members identifying priority issues. Members outlined some concerns about the approach taken when dealing with specific issues at the Stewardship group level. Members identified that the profession could have worked together to streamline the queries coming into the ATO.

    The ATO noted that the profession has been very supportive and were the ATO’s 'eyes and ears on the ground'. It was acknowledged that even if the opportunity to provide feedback is extremely time limited, it is still valuable to undertake consultation on emerging issues.

    Update on progress of consultations

    Andrew Orme, Deputy Chief Tax Counsel, Public Advice and Guidance, ATO

    The purpose of this item was to update members on the progress of consultations nominated by Co-chair Michelle de Niese:

    Andrew Orme noted that all the consultations were impacted in various ways by COVID-19 and provided the following updates:

    • FBT ruling – car parking fringe benefits – work has recommenced with consultation on a specific issue still to occur
    • Professional firms – allocation of profit guidelines and Everett assignment - the Draft Practical Compliance Guide (PCG) was very close to release but was deliberately paused due to COVID-19. Members expressed their views that sufficient consultation has not been undertaken noting the draft has not been provided to the working group and that it would be beneficial to do so before the draft is released.

    Action item

    CSG 2007/01

    Due date

    As soon as possible

    Responsibility

    Andrew Orme Deputy Chief Tax Counsel, Public Advice and Guidance

    Description

    Draft Practical Compliance Guidance on Professional firms – allocation of profit guidelines and Everett assignment

     

    Andrew Orme to relay members’ views about insufficient consultation on the draft PCG. The draft PCG is to be provided for further consultation to the working group before the draft PCG is released.

    • Capitalisation of labour costs – The ATO is continuing to work through several suggestions that have been received

    Proposed consultations

    Treasury

    Kathryn Davy, Principal Adviser, Corporate and International Tax Division, Revenue Group, Treasury

    Treasury provided a summary of Treasury consultations completed since February 2020 to members for their information. Members noted that the consultation processes on JobKeeper conducted by Treasury were excellent.

    Board of Taxation

    Lynn Kelly, Board of Taxation

    The Board of Taxation has handed a report to Government on the Corporate Residency Review and resumed consultations on its review of CGT rollovers.

    The Board noted that they have moved to virtual consultations and while that has provided some challenges, it has also at times increased the engagement/insights able to be shared.

    ATO

    Andrew Orme, Deputy Chief Tax Counsel, Public Advice and Guidance, ATO

    The ATO noted that the key focus for next few months will be the recently announced changes to JobKeeper.

    New advice and guidance products to be consulted on shortly include:

    • Revised Practice Statement Law Administration PS LA 2020/D1 Remission of additional superannuation guarantee charge on Super Guarantee penalties following the end of the amnesty period
    • Law Companion Ruling on vacant land expenses
    • Draft Tax Determination TD 2020/D1 Income tax: notional deductions for research and development activities subsidised by JobKeeper activities on interaction between research and development expenditure and JobKeeper payments.

    Potential new matters for consultation

    All members

    Members raised the following matters for consideration:

    • Foreign Investment – changes to the rules will require consultation
    • COVID-19 – The planned move of COVID-19 Frequently Asked Questions (FAQs) from ato.gov.au to the Legal Database is creating a perception that the advice is no longer valid or current. Members queried what is the future standing of COVID-19 advice.

    Andrew Orme advised that these changes were related to how the information is captured from the website. The move will ensure the FAQs are preserved as a record of the ATO advice that has been given.

    Action item

    CSG 2007/02

    Due date

    Next CSG meeting 26 October 2020

    Responsibility

    Andrew Orme Deputy Chief Tax Counsel, Public Advice and Guidance

    Description

    Communications regarding the move of COVID-19 Frequently Asked Questions from ATO website to Legal Database

     

    Andrew Orme to ensure appropriate communications are provided to tax professionals and taxpayers regarding the changes to move the COVID-19 Frequently Asked Questions from the ATO website to the ATO Legal Database.

    • ATO data on lodgment activities – Concerns raised about the lack of ATO data on practitioner lodgment activities. Members noted the ATO should consider creating a special purpose working group to focus on lodgment related matters.

    Deborah Jenkins noted that she would discuss with Hoa Wood Deputy Commissioner, Individuals and Intermediaries whether consultation on the Lodgment Program generally, including consideration of the impacts of COVID-19 may be appropriate. She noted it would be important to do this in the context of the original purpose of a lodgment program.

    Action item

    CSG 2007/03

    Due date

    Next CSG meeting 26 October 2020

    Responsibility

    Hoa Wood, Deputy Commissioner, Individuals and Intermediaries

    Description

    Consideration of consultation on the Lodgment Program

     

    Deborah Jenkins to discuss with Hoa Wood Deputy Commissioner, Individuals and Intermediaries (who has responsibility for the program) whether consultation should be considered on the Lodgment Program.

    Small Business Debt consultation strategies

    All members

    The focus of this discussion, requested by members, was to seek members’ view on what consultation they felt was required for debt related issues for small business taxpayers that are impacted by COVID-19.

    Members advised they are seeking to work with the ATO at a more strategic level regarding the ATO’s debt collection framework to ensure that the ATO understands the broader landscape so that their debt compliance strategies are appropriate, and to identify any emerging issues and challenges.

    Deborah Jenkins noted that the ATO would consider engaging in consultation on the future approach for consultation on the debt framework. She noted that this issue has been raised by various Stewardship groups, including the NTLG and the Tax Practitioner Stewardship Group and recommended that this work be scoped and undertaken through the most appropriate group rather than multiple groups.

    Action item

    CSG 2007/04

    Due date

    Next CSG meeting 26 October 2020

    Responsibility

    Vivek Chaudhary, Deputy Commissioner, Debt

    Description

    Consultation on ATO’s debt collection framework

     

    The ATO to consider engagement with CSG members to discuss future approach for consultation on the debt framework, building on the discussions already commenced with CPA representative.

    Update on matter raised at 3 March 2020 CSG meeting

    Andrew Orme, Deputy Chief Tax Counsel, Public Advice and Guidance, ATO

    Members suggested that the ATO should consider promoting the rolling forward of any unused $25,000 concessional cap for superannuation. Andrew Orme noted that it has been identified that due to the current environment, this is not an appropriate time to progress this.

    Other business

    All members

    The following reports were tabled at the meeting for members’ information:

    • ATO consultation activities since the last meeting
    • Feedback received on consultation activities
    • Snapshots of the Stakeholder Relationship and Special Purpose working groups as at 30 June 2020.

    Michelle de Niese asked how feedback on consultation activities is provided to ATO staff responsible for public advice and guidance. The ATO noted that the feedback is shared internally.

    CSG Charter

    The ATO advised that while implementing the standardised charter for Stewardship groups it was identified that the charter did not enable the ATO co-chair to consider conflicts of interest when considering nominees for membership. As a result, the standardised charter has been updated to incorporate an additional sentence under Select and manage members – 'In considering nominees for membership, the ATO co-chair will consider whether there are any real or perceived conflicts of interest regarding the nominee.'

    To align with the change in the standardised Charter, we have included this change in the CSG Charter. Members endorsed the change.

    Insights from ATO Stewardship Group Co-chairs’ meeting

    Deborah Jenkins noted that a meeting of the ATO Stewardship Group co-chairs was held on Monday 30 March 2020. The meeting was to capture the insights and impacts that had been shared by the members of stewardship groups regarding COVID-19. General sentiments at that time included:

    • Stewardship group meetings provided information on the measures that impact the membership
    • Stewardship group members were feeling overwhelmed with all the information
    • Stewardship groups are being used in a more agile way with more regular but shorter meetings
    • Groups were a good sounding board
    • Issue of lodgement, payment and audit deferrals raised
    • Prior to meeting, members provided a summary of a range of tax and superannuation issues identified that needed consideration.

    The ATO co-chairs noted concerns where the same issue is being raised in different stewardship groups. To assist co-chairs, the key insights from meetings are shared internally with the ATO Co-chairs so they are aware of issues across all groups.

    Action items update

    Robyn Theacos, Director, Enterprise Strategy and Design; Andrew Orme, Deputy Chief Tax Counsel, Public Advice and Guidance, ATO

    A status update was provided on the two open CSG action items.

    CSG 2003/01 – FBT working group

    Members had raised concerns about the operation of the working group. The ATO will review the charter and membership with a view to bringing an appropriate focus on developing public advice and guidance with appropriate consultation amongst a broader work program.

    The ATO is progressing the FBT gap towards finalisation and this will inform areas of focus where the ATO and practitioners can work together to address the drivers of the gap. In addition, since several policy issues are raised by committee members at these meetings, Treasury will be invited to attend going forward.

    Members agreed the action item could be closed.

    Members noted they understood that some consideration of an employment related working group rather than a specific FBT group was being considered. The ATO will seek information from Deputy Commissioner, Superannuation and Employer Obligations about whether an employment related group is being considered.

    Action item

    CSG 2007/05

    Due date

    Next CSG meeting 26 October 2020

    Responsibility

    John Ford, Acting Deputy Commissioner, Superannuation and Employer Obligations

    Description

    Employment related working Group

     

    ATO to advise if an employment related working group is being considered either as a separate group to the FBT working group or as part of the FBT working group.

    CSG 1907/02 Confidentiality of Consultation activities

    Unfortunately, due to the current COVID-19 environment the ATO deferred work on this item. Members noted the ongoing concern by members about their lack of awareness of confidential consultation activities being conducted by the ATO.

    Members asked about the criteria for a consultation to be confidential. The ATO noted that this information was provided at the 3 March 2020 meeting.

    Further discussions identified that it would be appropriate to have a standing agenda item to identify and note any confidential consultation activities which have occurred during the period since the last meeting. The content of the confidential consultation will not be discussed.

    Members agreed that if any CSG members hear about any confidential consultation occurring and require clarification they will contact Robyn Theacos directly.

    Attendees

    Attendees list

    Organisation

    Name

    ATO

    Deborah Jenkins (Co-chair), Law Design and Practice

    ATO

    Andrew Orme, Public Advice and Guidance

    ATO

    Georgina Wade, Enterprise Strategy and Design

    ATO

    Louise Clarke, Policy Analysis and Legislation

    ATO

    Robyn Theacos (Secretariat), Enterprise Strategy and Design

    Association of Superannuation Funds of Australia

    Glen McCrea

    Board of Taxation

    Lynn Kelly

    Chartered Accountants Australia and New Zealand

    Michael Croker

    Corporate Tax Association

    Michelle de Niese (Co-chair)

    CPA Australia

    Elinor Kasapidis

    Institute of Public Accountants

    Tony Greco

    Law Council of Australia

    Clint Harding

    Tax practitioner

    Keith Clissold

    The Tax Institute

    Stephanie Caredes

    Treasury

    Kathryn Davy

      Last modified: 14 Sep 2020QC 63670