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  • 1. Welcome and introductions

    The Chairperson opened the meeting, welcomed new members and noted apologies.

    Action items

    There was one item carried over from the May 2016 meeting. Claire O’Neil will be invited to the next meeting to provide an update on digital by default.

    Reference

    BASAAG 0505/01

    Agenda topic

    Item 1 – Digital by default

    Action item

    A discussion regarding a range of security topics, including the end to end framework and review will be brought to a future meeting (date to be advised).

    Responsibility

    Claire O'Neil

    2. Major upgrade to ATO systems

    In December 2016 the ATO will move activity statement accounts to a new accounting platform. This move will lay the foundation for other key projects like the Single Touch Payroll.

    Some of the key features are:

    • efficient refund management
    • streamlined account management
    • enhanced statement of account functionality
    • improved account administration of pay as you go instalments and fringe benefits tax instalments reconciliation
    • portal requests for income tax refunds fully automated
    • consistent payment plan management for income tax and activity statement accounts.

    The transition will occur between 24 December 2016 and 3 January 2017 and will result in a number of changes for portal users that will be visible in January 2017. Additional detail will be provided in the coming months.

    Reference

    BASAAG 1108/01

    Agenda topic

    Item 2 – General Interest Charge

    Action item

    Members would like to see general interest charge transactions on the Tax Time summary retained as this information assists BAS agents with their end of year reconciliation processes. If this information is removed from the running balance account BAS agents will have to perform some manual processing.

    This information will be taken back to the project team for consideration.

    Responsibility

    Robert Charles

    Focus groups consisting of each of the three user segments of small businesses, tax practitioners and internal staff participated in user research and collaborative design sessions. User requirements were identified, proposed changes were tested, issues and irritants were uncovered and other options were raised for incorporation into the statement of account design.

    Management of director penalties for pay as you go withholding and superannuation guarantee charge will be moved to a new accounting system. It will result in a number of changes for portal users which we expect will be visible in April 2017.

    Key features include:

    • the creation, visibility and automated update of new director penalty accounts
    • directors will be able to make payments and enter payment plans for their director penalty accounts via ATO Online
    • more efficient allocation and offset of payments
    • improved efficiency leads to improved management of the superannuation guarantee charge.

    Reference

    BASAAG 1108/02

    Agenda topic

    Item 2 – Superannuation Guarantee Charge

    Action item

    Members would like to access records that show the superannuation guarantee payment data received by the ATO. The records would provide a source of information that would assist BAS agents to help employers keep up to date.

    This information will be taken back to the project team for consideration.

    Responsibility

    Robert Charles

    The ATO’s next steps are to provide more detail at future meetings, including visual examples of portal and statement of account views, provide support material for practitioners closer to deployment and further testing leading up to deployment.

    The ATO will seek further guidance from members on how this will be delivered.

    3. Software Assurance project

    The aim of the project is to help alleviate common errors for clients prior to lodgment and explore options to improve internal governance and assurance processes. By providing transactional certainty prior to lodgment the ATO can help reduce the burden and cost of compliance, tailor engagement activities to reduce unnecessary contact where it can be avoided and focus on those clients who are genuine non compliers.

    The ATO has a wide range of tools and analytics that are used to verify lodgments once they are received. We would like to explore ways to share these with tax professionals so that increased certainty for client's pre lodgment is provided. We will be working with tax professionals, BAS agents and software developers to explore ways to build these into practice management software and commercial software for self preparers.

    The ATO is aware that occasionally a client will have an abnormal trading transaction which is outside of their normal trading pattern. We are looking to explore opportunities for tax professionals, BAS agents and their clients to tell us about these events at the time of lodgement so they do not unnecessarily stop the flow of the lodgment and require the ATO to make contact with tax professionals or their clients. We also want to tailor our engagement and reduce unnecessary contact where it can be avoided and focus on those clients who are not doing the right thing.

    Where a client is not doing the right thing or is unwilling to participate in the tax and superannuation system we will engage with the client through a review or audit. One of the emerging challenges is where the client is using Cloud and when we request information for the purpose of the review or audit the client voluntarily offers full access to their Cloud records so the ATO officer can access the necessary information. We would like to work with software developers to make this a secure option where we can take up the clients offer using ‘read’ only access.

    We are seeking your thoughts and expressions of interest to work with us to explore the options outlined above in a co-design workshop in November 2016.

    4. Single Touch Payroll

    Single Touch Payroll is a government initiative that enables businesses and employers to report staff salary or wages and pay as you go withholding amounts to the ATO at the time they pay their employees. Superannuation contribution information will also be reported to the ATO when payments are made by the employer to the fund.

    An optional streamlined process will be available for individuals commencing employment that will give them the option of completing forms such as Tax File Number declarations and Superannuation Standard Choice using pre-fill from ATO online services or through their business management software.

    Single Touch Payroll will be mandatory from 1 July 2018, subject to legislation being passed, for employers with 20 or more employees. Businesses with a Single Touch Payroll solution can choose to start Single Touch Payroll reporting from 1 July 2017.

    A Single Touch Payroll Advisory Group has been created and consists of representatives from key stakeholder groups. These include the Institute of Certified Bookkeepers, finance industry, industry representative bodies, tax practitioners, BAS agents, software developers and superannuation fund associations. Its role is to provide leadership across the industry, shape and influence, work together with partners, identify issues and look at the best way to resolve issues.

    Working groups have been developed to provide practical advice and ensure sensible solutions are reached. The current working groups operating are the design working group, law working group and technical working group. A change management readiness working group is in development and small business pilot working groups will be established. Additional working groups will be developed as required throughout the Single Touch Payroll program and the ATO will continue to consult and co-design opportunities as they emerge such as interactions with Single Touch Payroll and the activity statement.

    ATO design principles have been developed that:

    • embeds the change in natural systems associated with payroll event and online payment channels
    • seeks to drive positive behavioural change and good business practices rather than compliance driven change
    • seeks to find low or no touch impacts on employers where possible
    • ensure there are no barriers to participation regardless of business size or scenario
    • facilitates customisation and tailoring of solutions by the market
    • engages trusted business in identifying solutions and developing implementation approach
    • enables leveraging of existing SuperStream implementations where it makes sense and encourages innovation.

    Members discussed the need for business management software to provide an amendment service and for the ATO to provide a manual entry option through portal to allow for amendments to occur after finalisation.

    Phase 1 provides a building block for potential future phases opportunities to minimise re-work and enable incremental changes over time.

    The ATO will be conducting a pilot with small businesses in the first half of 2017 to explore options, issues, solutions and benefits that Single Touch Payroll may provide for employers with 19 employees or less. There will be representation from small businesses, employers from different industries and sub-groups and a combination of metropolitan, regional and very remote small businesses to ensure a wide range of business models and circumstances are covered.

    5. Simplified BAS

    Simpler BAS will become the standard GST reporting option for up to 2.7 million small businesses from 1 July 2017. Its aim is to reduce the time, stress and compliance costs associated with GST bookkeeping and reporting for small business.

    From 1 July 2017 the ATO will remove four GST questions from the BAS:

    • G2 – export sales
    • G3 – GST free sales
    • G10 – capital purchases
    • G11 – non-capital purchases.

    This will mean small business will only be required to report:

    • G1 - total sales
    • 1A – GST on sales
    • 1B – GST on purchases.

    Members advised that some clients may wish to use more than the two simpler BAS tax codes because of the data certainty it gives them when checking the accuracy of the information placed at these labels. As the ATO is not prescriptive on how tax professionals configure their software this matter remains with the tax professional.

    Along with the announcement of Simpler BAS in the 2016 Federal Budget, the government also announced additional changes for small business, including changing the definition of small business from one with a turnover of less than $2 million to $10 million. This change is still subject to a change of legislation.

    Members questioned how businesses would manage transitioning across from a turnover of less than $2 million to $10 million. The ATO will monitor businesses and when approaching the figure requiring them to transition over, they will be advised to contact their BAS or tax agent for advice on transitioning over to full reporting from the start of the next financial year.

    The ATO is testing a Simpler BAS bookkeeping solution with small business, software developer partners and tax professionals to ensure tax professional expertise and experience is reflected in the co-design of the bookkeeping solution.

    The findings from the testing will be broadly disseminated to tax professional working groups and will assist the ATO to develop a detailed understanding of the role tax professionals will play in supporting small business to decide whether to move over to a Simpler BAS bookkeeping solution and guide them through the transitional set up process.

    The ATO is developing a Change Plan to ensure small businesses are fully supported in the lead up to the July 2017 transition to Simpler BAS. There will be small business and tax professional engagement and the tax professional community will play a key role in how the ATO shapes its language in communications that issue to the community. BAS Agent Association Group members will be consulted in relation to the shaping of these messages on an ongoing basis.

    6. Tax Practitioner Board

    The Tax Practitioners Board (TPB) has continued with its webinar program this year. Further webinars are scheduled for the remainder of the year.

    Other activities conducted include:

    • outreach sessions planned for October in Sydney and Melbourne
    • ATO Open forums and involvement in future forums
    • external events including professional association conferences and registered training organisation events.

    As of 30 June 2016 there were 75,436 tax practitioner registrations of which 14,715 were BAS agent registrations, including 2,139 new BAS agent registrations.

    The TPB has expanded the scope of services BAS agents can provide beyond existing BAS servicesExternal Link, as defined in the Tax Agent Services Act 2009. Following consultation with external stakeholders the Tax Agent Services (Specified BAS Services) Instrument 2016External Link has been registered.

    More than 6,417 annual declaration notices issued to BAS agents during the January to June 2016 period. Of these a small number of notices were not lodged. Reasons for non lodgment include agents failing to lodge on time, agents surrendering their registration, agents deceased and companies no longer exist.

    Where annual declarations are not lodged on time or complaints and referrals are received in relation to a BAS agent the Board may impose one or more of the following administrative sanctions:

    • a written caution
    • an order requiring the agent to take action
    • suspension of registration
    • termination of registration.

    In the 2015-16 financial year the following BAS agent sanctions were imposed:

    • 3 registrations terminated as there was either no supervising agent or the company no longer met the registration eligibility requirements
    • 94 written cautions issued of which 93 had failed to lodge their annual declaration on time
    • 9 orders imposed requiring the BAS agent to lodge their annual declaration.

    The Board commenced an ‘Unregistered BAS provider’ project in April 2016 to promote compliance of the registration requirements under the Tax Agent Services Act 2009 (TASA). The aim of the project is to identify unregistered BAS agents advertising their services and apply a suite of strategies to address non-compliance. This work is ongoing and has been expanded to capture a broader sample of the BAS agent population.

    Registered practitioners and association members can report unregistered entity activity to TPBComplianceReferral@tpb.gov.au. Alternatively, formal complaints of unregistered entity behaviour can be made through the usual complaint referral process on www.tpb.gov.auExternal Link.

    7. Other business, forward agenda items and meeting close

    Superannuation guarantee charge

    Members discussed the difficulties experienced when lodging superannuation guarantee charge forms. A major irritant is the online form that requires every entry to be input manually. Examples were provided where the high volume of data input resulted in the system crashing and requiring the BAS agent to start over. This makes the process time consuming, expensive for the client and results in the information being provided late. The ATO recognises the current BAS agent experience is not ideal and the matter will be brought to the attention of the Superannuation area.

    Members also expressed concern regarding the activities of some superannuation funds in relation to payments and the timing of payments to superannuation funds. Concerns in relation to this matter will be brought to the attention of the Superannuation area for consideration.

    Australian Business Register

    BAS agents would like the ability to apply for an Australian Business Number. The ATO is aware of the issue and is currently working on this matter.

    Working with our partners concept

    Members were interested in receiving regular updates about the working with our partners’ concept and how the ATO is promoting BAS agents to the community.

    Reference

    BASAAG 1108/03

    Agenda topic

    Item 7 – Working with our partners

    Action item

    A representative from Corporate Communications will attend the next meeting to provide members with an update on how the ATO is promoting BAS agents to the community.

    Responsibility

    Colin Walker

    Client communication list

    Members were interested in having future discussions regarding what the ATO considers is and is not accessible to BAS agents in the BAS client communication list. Not all communications with BAS agents and their clients are available as communications issue from a range of channels that are unable to be included in the list.

    The ATO will continue to grow and develop this product, is committed to improving the tax professional experience and will continue to work with BAS agents to enhance the BAS client communication list.

    Forward agenda items

    The following items will be covered at the next meeting:

    • major upgrade to ATO systems in December 2016
    • how the ATO is promoting BAS agents to the community
    • software assurance project
    • Single Touch Payroll.
    • digital by default
    • Tax Practitioner Board.

    Please forward agenda topics to BASAAG@ato.gov.au at any time.

    2016 Meeting schedule

    The next BAS Agent Association Group meeting will be held on Monday, 5 December 2016 via telepresence.

      Last modified: 26 Sep 2016QC 50187