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  • 1. Welcome and introductions

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

    Minutes from the last meeting held on 28 March 2017 were endorsed.

    Members discussed a recent experience with a debt collection agency and were asked to provide examples of any issues or inconsistencies they may experience in the future to BASAAG@ato.gov.au.

    2. Practitioner Lodgment Service

    The focus leading up to Tax Time 2017 has been the transition of income tax return lodgment from the Electronic Lodgment Service (ELS) into the Practitioner Lodgment Service (PLS).

    From 1 April 2017 fringe benefit tax (FBT) forms can no longer be lodged through ELS.

    Software developers have transitioned FBT lodgment functionality to PLS and tax agents are now lodging via PLS.

    Approximately 30% of income tax returns are being lodged via PLS and 70% through ELS. This figure is consistent with the expected transition rate. Digital service providers were initially focused on incorporating the tax return suite of forms into practice management software. The focus has now moved to activity statement forms and associated reports.

    The ATO is working with digital service providers to migrate the services offered in their existing tax agent software across to PLS. The decision as to which forms are made available in BAS agent software is made by the digital service providers based on demand from their consumers.

    The next step will be to develop a suite of functions outside of ELS into an Application Programming Interface (API) format. API is a format in which software developers can produce services within their software which interact with the ATO.

    The lodgment channels and tools used by BAS agents will remain at this time. The ATO is not looking to remove the existing lodgment tools and channels used currently by BAS agents.

    The ATO is currently looking to make Tax File Number declarations, payment summaries, taxable payments annual reporting and other functionalities, available for software developers. The ATO cannot say when software developers will choose to make these available in their product for PLS.

    Members requested a summary of the future design of core functions such as running balance accounts.

    Currently BAS agent’s access information via the portal and the ATO continues to support the portals at this time. In the future a second gateway will be hosted by Amazon web services in a different environment to the ATO through an Australian Cloud environment. This will enable PLS to have two gateways, one hosted through the current ATO environment and one hosted externally in a secure environment. This will provide an extra level of security and increased capacity.

    Currently some BAS agents use common software to lodge BAS via PLS. On occasion when lodgment fails no lodgment receipt is given. Members asked if there will be a design in the PLS space in the future to queue lodgments until the ATO system can accept and process them.

    A queuing function is not a priority for the ATO in the short term. The function was investigated for income tax returns in the lead up to Tax Time 2017. At this time the ATO would not mandate to software providers to include this as an option. One software provider does have queuing functionality and during the recent PLS outage, lodgments were queued until they were able to be accepted by the ATO.

    The market may shape this functionality as some software providers do have this option in their product.

    Software providers have clearly stated they would like to deliver what their paying customers ask for rather than the ATO mandating what is available in programs.

    3. ATO Community Forum

    The ATO has been exploring how to increase engagement with the online community and expand ATO social media presence. The ATO is undertaking user research to understand the role of online communities and the need for a place to discuss tax and super topics online, in a trusted environment.

    There has been consultation with internal and external stakeholders to understand the current usage of online communities and to determine the appetite for an ATO moderated online community.

    Members were given a demonstration of the concept of an ATO moderated online forum. Participants in the online forum may be browsing posts and responses, they may be looking for information on a specific topic or they may post a question or a comment.

    The ATO showed an example of a question posted by a participant. Others had posted responses to that question. The ATO then demonstrated to members how the posts would be moderated. Users can click on a button that will take them to the ATO accepted solution/ response to a question. Where the ATO considers the responses to be correct and accurate, the post will be marked as ATO certified. ATO certified responses will consist of general information and links to further information on the ATO website. Registered tax and BAS agents are able to include a tag in their user details to show that they are a registered tax agent.

    Members asked the ATO if incorrect information will be addressed. ATO stated that they will use social media monitoring software to moderate and ensure answers to questions are correct and easily identified. Members commented that moderating the comments is important.

    There was some concern that individual practitioners may use the forum to advertise their services or that clients will use the forum for advice rather than contacting their agent.

    The ATO will conduct unmoderated usability testing with tax professionals, individuals, small businesses and superannuation professionals through the ATO BetaExternal Link testing service to continue to evaluate the online community forum concept. BAS agents are encouraged to test the prototype and provide feedback by using the feedback button on the home screen.

    4. Single Touch Payroll

    An update of Single Touch Payroll reporting was given with a specific focus on the end to end design for Single Touch Payroll and potential impacts to BAS agents current business processes. Screen shots of draft Single Touch Payroll reporting screens were provided to members for an overview of:

    • what will be available on the portal for BAS agents (and Tax agents) once an employer begins to report with Single Touch Payroll
    • how employers can use multiple payroll systems
    • sorting functionality available by date or financial year allowing BAS agents to sort and collate information into one single report based on date ranges
    • BAS agents will be able to see the last submission the ATO received
    • figures taken from Single Touch Payroll reporting will be used to prefill activity statements
    • what employees will be able to see when their employer uses Single Touch Payroll
    • employees will be able to navigate via ‘my details’ on MyGov to see pay details per employer and financial years with both year to date and finalised pay amounts
    • display of employee super amounts
    • print functionality for employees.

    Single Touch Payroll is in the process of developing support documentation for software developers, employers and their representatives as a guide on how to meet their obligations under Single Touch Payroll (draft has been published). The ATO is developing a suite of business rules structured around giving guidance to employers on the end to end payroll process of when and what needs to be reported under Single Touch Payroll.

    Information is currently being prepared to advise employers of what time frame a payroll correction can be reported under Single Touch Payroll and how to report this at the end of financial year in the employees end of financial year declaration. End of financial year declarations will replace the payment summary annual report. The information provided with the declaration will then be made available through the pre fill service replacing the existing payment summary and payment summary annual report processes.

    The ATO has been defining very specific rules on a range of different circumstance for reporting under Single Touch Payroll. Within a few weeks a draft copy of these instructions will be made available. An employer or their representative can use this guideline to report under Single Touch Payroll. If an employer reports under Single Touch Payroll and deems it necessary to make a correction they will not be subject to false or misleading statements or be penalised by the ATO if they make the correction in accordance with the guidance (this uses the under the period of grace provision in the STP law).

    Reporting under Single Touch Payroll will not change the relationship between an employer and the BAS agent. Single Touch Payroll report will support lodgment by an intermediary. Single Touch Payroll is looking to rectify the issue of when an agent is added through the portal the existing BAS agent is removed. A future work plan is in place to allow more than one agent to be registered on a client’s activity statement account.

    5. Taxable Payments Reporting System

    In the 2017 Federal Budget, the government announced that taxable payments reporting will be extended to the courier and cleaning sectors. This means businesses that operate in these sectors that pay contractors will need to report those payments to the ATO. Taxable payments reporting will commence for these industries from 1 July 2018, with the first annual report for the 2018–19 year being due by 28 August 2019.

    The law is not yet in place, however it is envisaged that the system will operate in a similar manner to the current building and construction arrangements. Following consultation and law development, the ATO will implement an education program to ensure those businesses that will be impacted are aware of their new obligation and know how to comply. Information will also be provided to practitioners and professional associations through an awareness campaign to enable them to support their clients. The ATO will also advise contractors in the industries that their payments will be reported to the ATO.

    From 1 July 2017, government entities will be required to report grants they pay to Australian Business Number holders and payments wholly or partly for services. The first annual report for the 2017–18 year is due by 28 August 2018. Reporting will be via the taxable payments annual report.

    6. Employee Contractor Decision Tool

    In October 2016, the ATO met with tax professionals to review the Employee Contractor Decision Tool and test various scenarios using the tool. Participants agreed the background logic was technically correct however recommended several improvements be made to the current version of the tool.

    Some of the improvements suggested by participants were:

    • changes to the wording used in the questions of the tool
    • adding more information and questions to ensure all elements of the decision making process are covered to enable the correct answer to be provided by the tool.

    Members discussed the accuracy of the tool and whether a redesign was required or if there was an issue with the interpretation of the questions. Members provided examples of how the tool in some circumstances provided an incorrect answer.

    The ATO has prioritised a list of future changes and will progress these as capacity allows. This will be after the completion of priority work to support Tax Time 2017.

    Collaboration with BASAAG members has provided useful feedback regarding the tool’s effectiveness. Members will be kept informed of changes as they are made to the tool and to obtain ongoing feedback from members. There are some improvements considered as quick fixes which the ATO is trying to implement as soon as possible.

    7. Tax Practitioners Board update

    As at the15 May 2017 a total of 15,160 BAS Agents are registered with Tax Practitioners Board.

    The Tax Practitioners Board continues to receive applications from tax (financial) advisers for registration (including renewal applications). As a consequence, processing times for registration applications are longer than the usual service standard time of 30 days.

    Despite expected delays in processing renewal applications, agents will continue to be registered and maintain ATO portal access (for BAS and tax agents) throughout this period.

    The Tax Practitioners Board is prioritising the processing of new applications to minimise disruption to tax practitioners who are looking to commence trading with a registered agent number.

    From January to April 2017 the Board Conduct Committee issued written cautions to 23 tax and BAS agents who failed to complete their annual declaration by the due date. In 21 of these cases an order was issued to agents to lodge their annual declarations within 21 days from the date of the order. Annual declaration renewal dates can be found on the TPB RegisterExternal Link.

    The Tax Practitioners Board webinar program continues to be very popular. Since March 2017 the webinars delivered have been:

    April

    • Your tax practitioner registration: your key obligations – 225 attendees
    • Do you need to register as a tax (financial) adviser? – 91 attendees

    May

    • Getting ready to renew your tax (financial) adviser registration – 131 attendees
    • Supervision and control – 456 attendees

    There are a further two webinars scheduled for 6 June:

    • Professional practice for tax practitioners
    • Tax (financial) advisers and the code of professional conduct.

    The webinar program for July to December 2017 is currently being finalised and will be published on www.tpb.gov.au/webinarsExternal Link

    Tax and BAS agents must have a proper authority to lodge returns for their clients, verbal authority or an engagement letter are not accepted by the ATO.

    Each time a tax or BAS agent lodges an approved form with the ATO on behalf of their clients, the Taxation Administration Act 1953 requires agents to have first received a signed declaration in writing from the client. This includes all approved forms such as activity statements and tax returns.

    The client declaration must state both that they have authorised the agent to lodge the document and the information is true and correct.

    A client can choose to provide this declaration by email, fax or in paper form. The ATO website has information to remind tax and BAS agents of the requirement for client declarations.

    More information on authority to lodge can be found here tax-professionals client declarations.

    8. Other business, forward agenda items and meeting close

    The ATO will have a focus on tax agents and work related expense claims they have claimed for their clients in particular claims made without supporting evidence.

    Compliance action will be taken by the ATO if erroneous claims have been made.

    Proposed meeting schedule for 2017

    29 August 2017 – Venue and format of meeting to be announced

    28 November 2017 – Venue and format of meeting to be announced

    Agenda items can be forwarded to BASAAG@ato.gov.au at any time.

      Last modified: 19 Jul 2017QC 52925