• 3. GST Compliance Benchmark Survey

    The ATO commissioned a program of research to inform, support and monitor the effectiveness of the GST Voluntary Compliance Program. This research commenced in 2011. The first year of research investigated attitudes, perceptions and behaviours of businesses, tax agents and BAS agents to uncover key drivers and barriers for GST compliance. Baseline metrics and indicators to monitor the program were established so that the program could be evaluated.

    Quantitative research has been undertaken for five years, providing repeat measurement of key indicators to ascertain any shifts in attitudes and compliance behaviour.

    Qualitative research was also undertaken this year. The objective of that research was to:

    • establish perceived level of risk of tax and identity fraud
    • understand perceptions of tax and identity fraud
    • understand awareness, experiences and attitudes toward tax and identity fraud.

    Key findings of the research:

    • When business performance is strong, GST compliance seems to improve although managing cash flow is a concern and may influence compliance.
    • The use of intermediaries may influence compliance and some small businesses are moving away from using software packages to using intermediaries. There is a higher reliance on intermediaries in providing advice about meeting GST requirements, including recording and reporting transactions. There is an indication that business clients expect intermediaries to minimise how much GST they have to pay.
    • The ‘cost/benefit’ equation for non-compliant behaviour has continued to be challenged, and both BAS and tax agents are reporting an increase in the perception that most businesses who try to dodge their GST obligations will be caught by the ATO. Despite this, intermediaries are indicating that there is less concern from their clients about the penalties the ATO applies for non-compliance with GST.
    • GST compliance now appears more within business practice and built into day to day process.
    • The cash economy is still a concern together with the use of GST funds to manage cash flow.


    The GST system is still seen as a burden by businesses, even when they use tax or BAS agents to help them with their obligations.

    Cash flow is a common pressure for businesses and many rely on the GST collected to keep their day to day business going. A large number of businesses continue to enter into payment arrangements with the ATO to pay their GST debts.

    There is a high rate of ‘unintentional’ record keeping errors being made by businesses. Many of these could potentially relate to the ‘grey areas’ of GST laws that tax and BAS agents believe make compliance difficult.

    This indicates that there is still work to be done to make GST obligations simpler.

    Member discussion

    Members agreed that using intermediaries made compliance easier. Members were interested in the findings that more tax agents in 2015 seem to be preparing and lodging the activity statement on behalf of their clients than in 2011, whereas there are fewer BAS agents doing this on behalf of their clients.

    Client understanding has improved and continues to improve with a large proportion of new business owners who have grown up with the GST system. Focus still needs to be on education at the time of applying for an ABN and making small business aware of the thresholds at which they need to register for GST.

    Members stated that increases in workload results in a decrease in compliance. Many small businesses focus on on-time lodgment and this may lead to increased mistakes being made. Members suggested that extensions on lodgment should also match extensions on payment due dates. The ATO should chase those businesses using non-lodgment as a method to avoid the GST debt being crystallised.

    Members raised concerns that multiple extensions of payment may be indication of business viability. Many agreed that at times short term cash flow problems resulted in late payments but this did not necessarily indicate long term issues. Members would like consistency in debt management, but tailored communications based on past compliance.

    Members queried what the ATO is doing differently as a result of the research findings. The ATO continues to deliver a range of strategies and activities that seek to deal with issues covered in the findings and observations from the research. Those strategies cover initiatives aimed at correct registration, on-time lodgment, correct reporting and payment of GST obligations.

    The insights provided by the research into the attitudinal, perceptual and behavioural changes of businesses, tax and BAS agents towards the GST system has helped us to track and evaluate our compliance effectiveness measures and the progress of the program against the benchmarks established at the beginning of the research, in 2011.

    The findings are also being used to guide and inform our communication activities to support the GST Voluntary Compliance Program.


    BASAAG 0209/02

    Agenda Topic

    Item 3 – GST compliance benchmark survey

    Action item

    The ATO will provide figures on the number of clients moving from using a BAS agent to using a tax agent.

    Links for full survey reports to be provided to members.


    Assistant Commissioner Paul Southwell

    Post meeting response

    The ATO has further analysed the data relating to the frequency of services BAS agents provide to their clients. On a scale of one to seven, where one is ‘never, and seven is ‘very frequently’, there was a decrease in the percentage of BAS agents who gave a score of seven to the frequency of services provided to their clients, such as preparing their BAS, providing them with advice, and lodging their BAS for them, compared to the results in 2014. However, there has been a significant increase in those who scored the frequency of preparing and lodging BAS for their clients as a six. So when you look at the total of the responses that indicate frequent provision of services (scores five to seven), there has been an increase in the frequency of most services provided by BAS agents to their clients in 2015. While the headline result from the research indicated that BAS agents are preparing BAS for their clients on a less frequent basis, more careful analysis of the responses actually shows the opposite to be true.

    The 2015 survey results will be published to the ATO website later this year. Members will be advised when these are available. Below are links to the 2014 survey results:

    GST Voluntary Compliance Program – Phase 4 Communications Testing Research – Qualitative Research Report

    GST Voluntary Compliance Program – Quantitative Tracking Research (Year 4)

    4. Simplifying BAS – making it easier to comply and enhancing the client experience

    Small Business Fix-it Squad – Business Activity Statement – Making it easier….

    Small Business Fix-it Squads are an initiative to improve small business to government interactions that cross over multiple agencies – the focus is to identify and reduce red tape.

    Squads include small business owners, their representatives and intermediaries who work in a team with federal, state and local regulators to examine a problem from a small business perspective and make recommendations to fix the problem.

    Feedback from small businesses, industry representatives and software developers is that meeting BAS requirements places a disproportionate regulatory burden on small business record keeping.

    To focus on this the ‘Small Business Fix-it Squad – BAS – Making it easier….’ squad has been formed to examine the problems small business face in record keeping; reporting and paying BAS. The squad will explore and make recommendations on both short term and long term fix options that meet a broad range of small business owners’ needs.

    The intent of the squad is to:

    • identify the underlying issues for small business to meet BAS requirements by:
      • examining the end to end record keeping and reporting process from a small business perspective
      • identifying significant common irritants
    • design concepts to fix these issues in small business timeframes by
      • including small business and small business support partners in the design
      • identifying opportunities for natural systems to be used to reduce compliance burden
      • using a range of validation techniques to value and prioritise the fixes.

    An initial workshop was held on 18 and 19 August 2015, where representatives from small business, software providers, intermediaries from a variety of business associations, and ATO staff came together to:

    • discuss and confirm current irritants with completing the BAS
    • propose potential solutions or ‘fix-it concepts’ based on the identified irritants.

    The squad will establish a set of recommendations and the delivery of these recommendations will them be managed to completion.

    This collaborative approach aims to deliver practical and workable solutions. It is an opportunity for small businesses and other intermediaries in the tax system to play a role in reducing the compliance burden and make tangible improvements.

    Members thought the initiative was a very positive one and agreed the main compliance barriers as being:

    • client understanding and the complexity of completing BAS
    • cost of administration
    • the need for incentives for new business to educate themselves about compliance and administration.

    5. Superannuation

    SuperStream implementation update

    Key highlights

    • The number of contribution transactions is increasing steadily each month with over 3.09 million transactions in the last four weeks of August 2015.
    • Over 250,000 employers around Australia already benefiting from SuperStream and member registration request volumes are continuing to increase.
    • Self-managed superannuation fund (SMSF) volumes grew substantially from June 2015 but have plateaued and now account for 88,823 SMSF contributions or about 1% of total contribution volumes.
    • 100 per cent of Australian Prudential Regulation Authority (APRA) funds are receiving contributions from employers in conformance with SuperStream.
    • Major on-boarding activity continues to be evident through funds, administrators, clearing houses, payroll software companies and accountants/agents.

    Small Business Superannuation Clearing House registrations are growing with approximately 85,000 active registered users as at 30 June 2015. Approximately 70% of the Small Business Superannuation Clearing House volume is sent via SuperStream and this is likely to continue to increase.

    Some employers struggle to understand clearing house service offerings, especially payment timing and responsibility for meeting superannuation guarantee (SG) commitments. Members agreed that payment timings and payments being allocated to accounts by clearing houses is still an area of concern.

    The program of information sessions being held in regional areas is drawing to a close with the last two sessions being held in September 2015. These sessions have been successful in providing accountants, agents and bookkeepers with timely and relevant information. These sessions have also provided the ATO with useful community feedback on issues being experienced. Ongoing ATO engagement activities in regions will support employer on-boarding.

    The ATO continues with media and social media communication activities. The focus is now on education and support, with industry focused campaigns aiming to engage and provide tailored information. Members requested a schedule of planned communications.

    Members queried what actions are being taken to address non-compliant employers. The ATO has strategies to address non-compliance for both SuperStream and superannuation guarantee.

    Data quality is improving, but there are still some issues to address. Some employers do not understand the new information requirements and use ‘dummy data’. Data matching activities do not capture all these inconsistencies. The ATO will initially use education and support to address these issues.

    The group discussed workloads for small business and recommended the alignment of BAS and superannuation due dates. Feedback being received from employers is that SuperStream is resulting in a significant reduction in the time it takes to meet their SG obligations. The ATO is considering options to assist with the streamlining of work and the introduction of Single Touch Payroll will have an effect in the future. Members are invited to consider future scenarios and bring ideas to future meetings of this group.


    BASAAG 0209/03

    Agenda Topic

    Item 5 – SuperStream implementation update

    Action item

    The scheduled of planned future communications to be shared with members.

    Handout provided at the BASAAG meeting held 27 May 2015 to be provided to members.


    National Program Manager Philip Hind

    Super guarantee charge changes

    On 15 December 2014, changes to legislation to simplify and reduce the harshness of the superannuation guarantee charge (SGC) were announced. The SGC is incurred when an employer doesn’t pay the correct amount of superannuation guarantee (SG) for their employees by the quarterly due dates. These changes will apply to quarters starting from 1 July 2016. The current law will continue to apply to assessments raised for earlier quarters.

    The changes apply to:

    • nominal interest calculation
    • shortfall component of SGC to be calculated on ordinary time earnings, not salary and wages
    • Repeal of Part 7 penalties.

    These changes complement two other measures to reduce small business superannuation compliance costs; expansion of the eligibility criteria for using the small business superannuation clearing house and simplifying when a standard choice form must be provided by an employer. Both of these changes have applied since 1 July 2015.

    Nominal interest

    Nominal interest (NI) is currently calculated from the 1st day of the quarter to which the unpaid/late SG relates, up until the date an SGC assessment is raised. The NI continues to accrue, even when an employer may have paid in full but slightly late, until the date of the assessment. This has caused many employers to be subjected to significant amounts of interest disproportionate to the non-compliance and causing adverse financial outcomes.

    From 1 July 2016, the NI will be calculated from the day after the SG is due to the date full late payment is made for an employee (to the fund) or an assessment is raised, whichever is the earlier.

    This will result in the NI being calculated for the actual time that the SG remained unpaid. So, for example, if the SG is paid 10 days late then only 10 days of NI will accrue regardless of when an assessment is raised.

    SGC to be calculated on ordinary time earnings, not salary and wages

    Currently, an employer is required to calculate SG on ordinary time earnings (OTE). However, if they incur the SGC then the shortfall component is calculated on salary andwages. Payments, such as overtime, which are excluded from the SG calculation get caught up in the SGC calculation and can result in a liability much higher than the original contribution.

    From 1 July 2016, the SGC shortfall component will be calculated on OTE and will therefore directly reflect the amount of SG that should have been paid.

    Superannuation Guarantee (Administration) Act 1992 (SGAA) Part 7 penalty vs Taxation Administration Act 1953 (TAA) penalties

    Currently, auditors are required to assess the employer’s liability to additional penalties by considering Part 7 and applying these according to PS LA 2011/28. TAA penalties also apply, but we generally remit these to nil and apply Part 7 instead.

    From 1 July 2016, Part 7 penalties will no longer apply. TAA penalties only will be considered. This aligns the penalty application for the SGC product with other tax products.

    Our compliance approach

    As the SGC is a tax (as determined by High Court case, Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35) the Commissioner is able to determine how he allocates resources to collecting that tax, including consideration of the level of risk involved.

    The ATO has no discretion for the remission of the charge once an assessment has been raised, but does apply discretion to the compliance approach for those genuinely trying to comply (i.e. whether or not to pursue an assessment).

    The ato.gov.au website has been updated to briefly outline our risk approach. Members commented that if the tax deduction eligibility is lost then the incentive to comply with obligation decreases – apply penalties but don’t remove deductibility.

    Unless an SGC assessment is raised there is no loss of tax deductibility. A payment is only not tax deductible if it is a payment of the SGC or if it is a late payment of super that is formally elected to be used as a late payment offset to reduce the SGC.


    BASAAG 0209/04

    Agenda Topic

    Item 5 – SGC changes

    Action item

    Link to the High Court case Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35 to be provided to members.


    Director Geri Panfilo

    Post meeting update

    The links to the High Court case Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35 can be accessed via:

    Headnote – Roy Morgan Research Pty Ltd v. Federal Commissioner of Taxation - (28 September 2011)  

    Full case outcome - Roy Morgan Research Pty Ltd v. Federal Commissioner of Taxation –- (28 September 2011) - Judgment by French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel AND Bell JJ:  

    6. Online functionality

    The latest update to the ATO app was delivered on 20 July 2015, and includes the myDeductions and Business Performance Check tools.

    The next major update to the app will include voice authentication, currently scheduled for release September 2015. This will enable individuals to enrol and use their voiceprint to verify their identity and access online services via the app. If individuals create their voiceprint via the app it is stored in ATO systems. When phoning ATO contact centres, callers can authenticate using their voice as opposed to undergoing the usual proof of identity processes.

    The ATO is currently working to deliver similar voice authentication technology to enable tax practitioners to access their client records and simplify the proof of identity processes when phoning the ATO.

    Members provided feedback that some clients may be confused by the voice authentication process and unsure of the benefits of recording their voiceprint. ATO contact centre staff are able to assist clients with any queries they may have.

    The ATO has changed the way some activity statements are delivered to sole traders and individuals. If practitioner clients currently have a paper delivery preference for activity statements or instalment notices, and they are linked to myGov, the ATO will no longer send paper activity statements to the practitioner or their clients.

    Instead, individuals will receive a notification to their myGov Inbox when their activity statement or instalment notice is ready for viewing on ATO online services. This change was made on 22 August 2015.

    BAS agents will be notified directly by email when their clients receive their activity statement or instalment notice in their myGov Inbox. This is an interim solution while the ATO builds Client correspondence list-style functionality into the BAS Agent Portal by March 2016.

    Members discussed the frequency that emails should be sent and recommended a daily update. Members also recommended that a sample email be shared with members and the professional associations so that BAS agents would know that the email was legitimate when first received.


    BASAAG 0209/05

    Agenda Topic

    Item 6 – Online functionality

    Action item

    Members would like to see a sample of the myGov correspondence notification email, to share with their association members and publish in newsletters.


    Assistant Commissioner Daniel Bamford

    The ATO is working to deliver a cross-agency project known as ‘ABN to myGov’. The project gives individuals in business, or anyone authorised to act on behalf of a business, the option to use their myGov credential to access online business related services (those services that currently require an AUSkey).

    Subject to testing, the function is expected to be available in late September 2015 to a selected population who will be invited to participate in the trial and the population will gradually be expanded.

    This will not affect BAS agents directly other than giving them the ability to use their own myGov credential to log into AUSkey facing services. Accesses can still be managed through Access Manager/Australian Business Register (ABR).

    The intent of this project is to improve the client experience by addressing existing usability issues with AUSkey (ie browsers compatibility and smart device compatibility). As well as this, having a single log-on is easier to manage and remember.

    The project does not offer any additional services to businesses; it just offers business clients a choice in the way they access business services that already exist.

    Members raised concerns that checks are needed to ensure that the authorised third party representative is a tax professional.

    Members were shown a presentation of various pages from ATO online services for individuals. They suggested that an alert/help box be built into the PAYG instalment amount variation option to alert clients of the consequences of varying instalment amounts. They also suggested that the contact details pages reflect ‘registered BAS agent’s details’ as well as ‘registered tax agent’s details’.

    Overall feedback on the pages presented was that they were easy to read and follow and very user friendly.

    7. Other business and meeting close

    Review of private advice

    The ATO is undertaking a review into the provision of private advice. This review complements the recently completed Review of public advice and guidance with the intention of improving the client experience by being more client-focused and contemporary.

    The aim is to:

    • develop a future vision for the provision of private advice
    • design an advice framework that will guide our future culture, business processes, products and services
    • explore ideas and solutions that will improve the whole-of-client experience.

    The ATO will consult with clients, tax professionals and ATO staff over the coming months to identify high level issues and seek suggestions on new ideas and improvements to the advice framework.

    A discussion paper will be shared with our community, providing insight into suggestions already made and to encourage contributions to help shape the future vision in this area. This discussion paper will be followed up with further consultation events.

    The ATO will announce further updates via the ATO’s consultation webpage. If tax professionals would like to be involved please visit the ATO Consultation page on the ATO website.

    Members then discussed general concerns with the current support and services available to tax professionals including:

    • Feedback was provided that the Complex issue resolution service is not being widely publicised and Fast Key Code options when contacting the ATO are unclear and not user friendly.
    • A change in the language used to communicate to tax professionals recognising the role that they play was suggested. The language used is 'public service speak' and not 'industry speak'.

    Members observed that content on the revised ATO website has been written more with a taxpayer focus and uses a language style that is 'plain speak'. Members wish to discuss the website from the practitioner’s viewpoint focussing on navigation, access to technical material, layout, useability etc. This issue directly affects practitioners, and their ability to efficiently use the site will enhance smoother ATO/practitioner dealings.

    The ATO website project team are currently exploring options to address these concerns and plan to consult with BASAAG and ATPAG members in the near future. A teleconference will be organised in coming months to discuss further. Associations will then be better placed to disseminate information on the efficient use of the site to their members.

    Members are invited to provide examples of pages that are inefficient from a practitioner viewpoint and have multiple and broken website links via the BASAAG mailbox.

    Tax Practitioners Board report

    A report from the Tax Practitioners Board (TPB) was tabled at the meeting. Members were invited to comment or query the report.

    Later this year the TPB will introduce an annual declaration process for registered tax and BAS agents. Registered tax and BAS agents will need to complete the annual declaration form on the anniversary of the tax or BAS agents’ renewal date (excluding their actual renewal year).

    The TPB will email tax and BAS agents a simple form to notify of any changes to circumstances that might affect registration.

    The annual declaration is a simple way to make sure tax and BAS agents are meeting their ongoing registration requirements, in particular:

    • maintaining professional indemnity insurance
    • undertaking continuing professional education
    • meeting your personal tax obligations
    • fit and proper requirements, and
    • any changes in registration details or circumstances.

    In addition to the annual declaration, the TPB also advised that there is a project currently being undertaken to improve the TPB’s online forms including new registration, renewals and complaints. There was an issue raised by a member concerning the anonymity of lodging a complaint with the present form. The TPB advised that the new form will enable the complainant to lodge a complaint while remaining anonymous.

    Members also queried the possibility of introducing a standard date for all registration renewals and annual declarations. The TPB had considered the alignment of due dates for entities within groups, but due to the mobility of individual agents forming the sufficient number of an entity, it was not feasible to standardise the due dates.

    It was noted that the serving term of the current board will end on 22 January 2016.

    Copies of the report can be requested via the BASAAG mailbox.

    Key messages

    The key messages from this meeting were sent to members on 7 September 2015 for the professional associations to cascade to their members and publish in newsletters and on websites.

    Next meeting and close

    The following dates are proposed for meetings in 2015:

    Wednesday 25 November – via videoconference.

    Colin Walker thanked all members, guests and presenters for their contribution.

    The meeting closed at 3:15pm.

      Last modified: 13 Oct 2015QC 47087