BAS Agent Association Group key messages 11 August 2020

Supporting the tax profession

The ATO provided details on a new body of work that has been initiated following on from a discussion with the Tax Practitioner Stewardship Group members about how the ATO can better support the tax profession.

The ATO developed and provided some examples of case studies to members, going through different scenarios, including flood, fire and COVID-19 affected businesses. The purpose of these scenarios was to identify issues and opportunities where the ATO and professional associations could provide assistance and support to members of the tax profession.

It was clear that by partnering with the profession, we can understand better ways of working together when disasters hit. This also gives us an opportunity to provide a coordinated response by utilising the tax profession network more effectively.

Some key challenge areas were identified, the ATO is looking at ways of providing support long term through a consultation framework.

It was agreed to form a number of smaller project groups to review and progress each area in more detail. An email was issued inviting BASAAG members to participate and nominate for the project groups.

The ATO is looking to develop a strategy collaboratively with members. The case studies developed were a starting point to:

• implement flexible and adaptable processes ensuring the ATO provides information in a timely manner when needed.
• understand the long-term impacts on the profession and their clients, looking into the future and the flow on effects and impacts of the stimulus measures.

Members commented that with multiple Government departments making updates to information it is sometimes difficult to find a definitive source of truth.

Concerns were also raised by several members around the use of the cloud. Specifically, not everyone has cloud access when working from home and what impacts this would have on Victorian counterparts during the COVID-19 lockdown.

Cash flow boost measure

During the June activity statement lodgment cycle period businesses are receiving any remaining part of the initial cash flow boost they are entitled to and automatically receiving a credit for the first instalment of their additional cash flow boost.

To support clients and tax practitioners the ATO has published a cash flow boost estimator which allows for entering client circumstances, wages, withholding tax amounts and provides an estimate of the cash flow boost amount that may be received for the relevant cash flow boost periods.

The ATO is ensuring cash flow boost is received by eligible businesses as soon as possible. There were a few entities that did not automatically receive the cash flow boost amount and these exceptions required escalation. We are prioritising the finalisation of eligibility reviews and focussing on working with those businesses where we need to obtain further information to confirm their eligibility.

We have written to a small group of businesses where we have noticed some unusual or out of pattern trends in reported salary and wages and withholding amounts. We are asking these clients to check the amounts reported. We are concerned that a mistake could have been made and they might have received an incorrect cash flow boost amount. If this is the case, we will not impose penalties and will remit interest if the client revises their activity statement to correct it.

JobKeeper update

As a result of the recent JobKeeper payment announcements more employees are becoming eligible for JobKeeper 1. In addition, we continue to see new businesses enrolling for JobKeeper. Some key errors being made are generally by eligible business participants and include:

• an individual nominates themselves for all their entities when the requirement is to only nominate once
• a partnership nominates one partner as an eligible business participant and the other partner as an employee
• scenarios of eligible business participant being claimed when they are employees of another entity.

On 7 August 2020, the Government announced further changes to the JobKeeper extension referred to as JobKeeper 1.1. From the 3 August 2020 employee eligibility now has a baseline of 1 July 20 rather than 1 March 20. The Treasury fact sheet External Link has more information including guidance on the new eligible employee reference date and updated eligibility for JobKeeper 2.

With the extension of JobKeeper, the ATO is taking the opportunity to make changes:

Currently there is no visibility of the account or the lodged form after application has been made. The ATO is looking at providing more visibility and options for adjustment with the release of JobKeeper 2.

Current amendments can only be completed via telephone and the ATO is looking to implement other methods for amendments with JobKeeper 2.

Single Touch Payroll

Tax time was a focus for the Single Touch Payroll (STP) program given a large number of employers are reporting with STP for the first time this year. To date approximately 96% of income statements have been finalised through STP. About 1.2 million more than the same period last year.

Focus areas for proactive action by the ATO this year were:

• Early identification and proactive management of duplicate reporting
• software link in codes, and
• finalising income statements and incorrectly reporting against the wrong financial year.

There was a spike in onboarding to STP when the stimulus packages were announced in March and again in July. In the current economic climate, the active employer population is decreasing slightly.

A copy of the discussion paper on the tailored review around quarterly concession reporting should be available for members in August. BASAAG members were encouraged to provide feedback to the ATO about the quarterly reporting option to ensure it continues to be available to BAS agents and provide scenarios of why the quarterly reporting is needed.

Online Services for agents

The ATO responded to an action item from the 2 June 2020 meeting in relation to BAS agents being removed by tax agents in Online Services for Agents (OSfA) as client representatives.

The ATO is currently working to determine and implement suitable strategies. Data analysts are trying to understand and identify trends.

It has been found that BAS Agents are not the only ones being removed off the system payroll, service providers are also experiencing the same issues. This can cause problems around Single Touch Payroll requirements. The ATO is conducting further investigation into specifics and how to approach the issue.

Feedback from members provided insights around the function of the OSfA page. The Chair recommended that a core design team be formed, so that users can provide input and assist with re-designing the page.

Tax Practitioners Board

Tax Practitioners Board (TPB) Chief Executive Officer Michael O’Neill provided an update on the current status of the legislative instrument regarding BAS agents providing Superannuation Guarantee Charge (SGC) services and thanked BASAAG members for their contribution to the consultation process.

In June the proposed Legislative Instrument and accompanying Explanatory Statement was released for a 28-day public consultation period. The TPB also consulted with the Australian Small Business and Family Enterprise Ombudsman and the Office of Best Practice Regulation as part of the preliminary assessment regulation impact statement process.

The TPB is in the finalisation stage of drafting the Legislative Instrument, which includes seeking sign-off by the TPB Chair and the Minister’s approval to have the Legislative Instrument registered and tabled in both Houses of Parliament. The Legislative Instrument will become effective the day after the registration process.

General updates

• The TPB noted that there has been an increase in new tax practitioner registrations.
• The TPB has followed up with successful litigation against egregious tax practitioners.
• The TPB has provided supporting tax time messages in conjunction with an online advertising campaign to remind consumers to use a registered tax practitioner.
• The TPB is considering modifying and extending registration conditions as a result of the impact of COVID-19 for tax practitioners to support tax practitioners to help their clients.

Debt

Assistant Commissioner Claire O’Neill shared the ATO’s approach to proactively engage with taxpayers who have outstanding payment and/or lodgment obligations.

The ATO is sending help and assistance messages via SMS, letters and phone calls to provide information about the support available.

Tax practitioners are encouraged to provide feedback on the re-engagement strategy and overall approach with the community in the current climate.

Members expressed their support of the wording used for the debt re-engagement letters. They also suggested that when outbound phone calls recommence to tax practitioner clients that the phone call should be directed to the tax practitioner directly in the first instance, rather than to the client (noting that outbound phone calls have not yet recommenced to practitioner clients). In relation to SMS, members raised the need to identify entities so that agents could identify which client the communication was for. Members were invited to provide feedback and send through examples of outbound correspondence which do not include client identifiers.

A member raised they had noticed an increase of spam from the ATO. Members are encouraged to review the tip sheet developed by the ATO on scamsThis link will download a file.

Cash flow coaching kit

Assistant Commissioner Andrew Watson provided an update on the cash flow coaching kit. The beta digital kit has been updated with a new contemporary layout and improvements to functionality and accessibility in readiness for its full release later this year.

The ATO is currently working with 700 beta users who have access to the digital kit and welcomes more trusted advisors to join the beta user group. The ATO provides tax professionals with a short webinar on the beta digital kit before they access it.

Latest news and resources, including how to register for a webinar to access the beta digital kit is on the cash flow coaching kit webpage.

The ATO will continue to work with and through professional associations to increase awareness and take-up of the Cash flow coaching kit and join the beta digital kit user group.

Any feedback or questions can be sent through to the Cash flow coaching kit mailbox at cashflowcoachingkit@ato.gov.au.

Members provided positive feedback on the design and layout of the kit and are looking forward to using it. Suggestions included developing a tip sheet/collateral for agents on how to use the kit in COVID-19 scenarios including business viability. The ATO will explore this further to meet the needs of the current climate for businesses.

Taxable payments reporting system (TPRS)

Assistant Commissioner Peter Holt provided an update on the TPRS.

The TPRS came into effect in 2013 and has made continuous improvements in digital platforms, with a strong focus on providing clients a well-designed, tailored, fair and transparent experience.

Taxable Payments Annual Returns (TPAR) are due by 28 August for certain industries:

• Building and construction services
• Cleaning services
• Courier, delivery or road freight services
• Information Technology (IT) services
• Security, surveillance or investigation services

TPAR data allows the ATO to identify contractors who fail to lodge returns or activity statements, fail to register for GST, use false ABNs or fail to report all their income to the ATO. Lodging is online, easy, secure and users receive confirmation of lodgment.

Functional enhancements on the annual report became available online from June 2019 through Online Services for Agents (OSfA). The transition to digital has seen a 50% decrease in paper lodgment. Clients can now notify the ATO of multiple years of non-lodgments through the Non Lodgment Advice (NLA) form. The ATO will continue to engage with the community and encourage digital lodgments.

Recent and planned digital enhancements include:

• TPAR lodgment history is now visible in lodgment history screen
• NLA is operational and multiple years can be lodged using the NLA form online enabling the ‘save and resume’ functionality for TPAR.

Current statistics for lodgment show that around 50% of TPAR are lodged by the due date with the balance usually lodged within the next 12 months. It was noted that late lodgments impact on the availability of prefill information for employees.

The ATO invited insight from members on potential reasons for paper lodgments and late lodgments. Members provided feedback that:

• often there is confusion around who is deemed a contractor and the issue of getting sign off from clients prior to lodgment, causing the delay in lodgment
• other contributing factors for late lodgment include:
  • that businesses will wait to discuss TPAR when doing tax return later in the year
  • June activity statements are due
  • COVID-19 and the current uncertain environment playing a significant role
   

Members were interested in finding out more information about the ability to save and resume forms prior to lodgment.

It was noted that many businesses are transforming their business models due to COVID-19 i.e. restaurants providing delivery services. There may be instances where this leads to them meeting the criteria of needing to lodge TPAR forms. Members suggested that the ATO publish examples of common scenarios to demonstrate the requirement to lodge a TPAR to assist businesses to determine their lodgment obligation.

Other business

Members were invited to send through topics for discussion at the next meeting, scheduled for 28 October 2020.