Tax Practitioner Stewardship Group key messages 13 November 2020

Welcome

Co-chair Deputy Commissioner Hoa Wood welcomed attendees and asked that any conflicts of interest be declared.

Co-chair Matthew Addison advised members he has been appointed to the Council of Small Business Organisations Australian board as at 12 November 2020 and asked if this appointment caused anyone concern. Matthew stated his role on the Tax Practitioner Stewardship Group (TPSG) and other ATO groups is as an Institute of Certified Bookkeepers representative. Members congratulated Matthew on his appointment.

Members were reminded of the confidentiality of discussions at this meeting.

Action item update

All action items have been closed except for action item TPSG 28082020-04. This action item will be carried forward to 2021 when the Tax Practitioner Digital Implementation Group first meets.

myGovID & Relationship Authorisation Manager (RAM) post implementation update

Deputy Commissioner, Digital Delivery John Dardo provided an update on the implementation of myGovID, RAM and an overview of the key deliverables coming next.

In March 2020 myGovID and RAM successfully replaced AUSkey. The transition has exceeded expectations on all indicators including client adoption and usage, reduced escalations compared to AUSkey and increased security when accessing government online services.

As at 1 November 2020 the usage rates of the Digital Identity solution include:

• over 2.3 million downloads of the myGovID app
• over 1.7 million users have setup their myGovID
• exceeded 1.8 million authorisations established in RAM
• over 1.2 million unique Australian Business Numbers (ABN) linked in RAM
• over 70 million authentication events have been facilitated by myGovID and RAM to enable businesses to access online and machine-to-machine – for example, Standard Business Reporting services.

There is a private beta in progress for individuals to connect their myGovID to their myGov account to log-in and access ATO Online services for Individuals. This will become a public beta in December 2020, followed by planned improvements in 2021. The delivery for this program of work and reaching milestones has been on time and within budget.

The next stage for myGovID is to develop face verification technology to provide a higher level of assurance on who owns the identity (IP3), protecting your ID and your personal information, and allowing you to do more online in the future.

Some services will mandate IP3, for example, high risk and or commencement of identity – Online TFN application service. For other services facial verification will not be mandatory but optional for those who want to strengthen their myGovID.

Members' comments

Members thanked the ATO for the digital identity program of work achieved to date and acknowledged the benefits during the pandemic period.

Members confirmed that written consent for communications preferencing may be obtained from the client within the letter of engagement where the client authorises the practitioner to set communication preferences on their behalf.

Members suggested an article in the tax professional newsletter advising that if upgrading mobile phones, the myGov identification credential information will have to be uploaded to the new phone.

Modernising Business Registers program

Deputy Registrar Michelle Crosby and Director Julia Donohue provided an update on the Modernising Business Registers program of work. This program of work was fully funded in the last Federal Budget and involves bringing together 32 registers of which 31 currently sit with the Australian Securities and Investment Commission (ASIC) plus the Australian Business Register. The program of work will also introduce a director identification number (director ID) for company directors. This will be the first service delivered under the program of work.

The government is yet to set the start date for director ID and the transition period for existing directors to apply for their director ID.

People will need to apply for their own director ID; an agent cannot apply on behalf of a director. The reason for this is that an individual needs to prove their identity to get a director ID.

The ATO recognises that most directors will have a relationship with a tax, BAS or ASIC agent. A key part of our onboarding strategy is to enlist the support of agents to help us educate directors about the need to apply. It will be important for the ATO to provide agents with the information they need to enable them to engage with their clients. This information will need to be provided before the ATO starts any broader education of the community about director ID.

Members' comments

Members would like guidance material for agents on what they may and may not do to help their clients apply for a director ID – for example, fact sheets and easy to follow instructions on how to apply.

Members asked that they be involved in the development of communication products for agents.

Small business update

Assistant Commissioners Andrew Watson and Elissa Walker provided an update on the Digital cash flow coaching kit and Online services for business.

The Digital cash flow coaching kit is currently available in a beta digital version and paper version that can be used independently or together. A ‘soft’ launch was made of the final version of the digital kit in late November to key consultation groups and other stakeholders, including the current beta user group with an update to seamlessly transition them to the final version.

The ATO will continue to work and collaborate with and through tax professional associations, industry associations, government agencies and other delivery partners to increase awareness and take-up. Practical Cash flow coaching kit 'show me how' webinars and videos are available for tax professionals and business advisors.

As part of the ATO commitment to delivering contemporary, streamlined services, the ATO is introducing Online services for business. Online services for business will replace the Business Portal and continue to provide a digital service for business clients that choose to directly interact with the ATO.

Online services for business will provide a secure, modern channel for businesses and sole traders to manage their tax and super obligations and can be accessed on multiple devices, including mobile phones or tablets. A private beta commenced on 6 October 2020 to help gather feedback, shape the ongoing development of this service, and inform the decision to progress to public beta.

Members' comments

A member with staff trialling the Online services for business provided the following feedback:

• the process of adding a business is a little difficult to follow and requested the ATO provide some more communication on how to add a business entity
• some business groups do not have an ABN, such as an investment entity. Currently without an ABN a business is not able to use Online services for business.

Supporting the tax profession - Update

Assistant Commissioner Sylvia Gallagher provided an update on the progress of the Supporting the Tax Profession Working Group. The four project groups under this working group meet regularly to discuss short, medium and long term goals and were formed to support the tax profession going forward.

Each group has a TPSG member and an ATO representative as co-chair. The four groups are:

• Information and guidance project group, led by Robyn Jacobson and Michael Job
• Flexible and adaptable processes project group, led by Debra Anderson and Karen Piko
• Changing roles and mental health project group, led by Phil McCann and Alison Cone
• Understanding long term impacts project group, led by Matthew Addison and David Baker.

Robyn Jacobson provided an update on the Information and guidance project group.

• The group has been looking at communication preferences and options for how information and guidance is delivered by the ATO.
• There is a refresh of ato.gov.au underway to ensure a variety of audiences receive the necessary information. Information continues to be regularly updated on the ATO website to provide agents with the technical support they require in a rapidly changing environment.
• Communication channel preferences continue to be looked at and consideration is being given for visibility on ato.gov.au to identify when information is updated.
• Communication is being reviewed to ensure clarity is provided by including links to technical and legislative references.

Debra Anderson provided an update on the Flexible and adaptable processes project group.

• The initial focus of this group was on the ATO demonstrating flexibility with tax professionals and providing transparency regarding the progress of any issues in a crisis.
• The group is currently working on a short-term framework that can be implemented immediately in the event of a crisis. This group will be called ‘rapid response group’ to ensure the right people are called together at the right time in a crisis.
• This group has been reflecting on the COVID-19 pandemic to see what has been done and what could be done better. Feedback will be requested from the other three project groups as well.
• Through discussions with the ATO business continuity management area the group realised that tax practitioners may need some assistance to prepare for a crisis. This can be done with assistance of the professional association representatives.

Phil McCann provided an update on the Changing roles and mental health project group.

• The focus of this group is to support tax practitioners and their clients facing financial and other difficulties in a crisis.
• It was a challenge to make tangible decisions and recommendations in a flexible and intangible area. The group will raise awareness of the steps that can be taken in a crisis.
• The ATO has lodgment and payment concessions already in place.
• Practitioners will need a flexible approach and to develop soft skills through these times.

Matthew Addison provided an update on the Understanding long term impacts project group.

• The groups focus is on long term impact and perspective in terms of immediate response and a framework which ties in with the Flexible and adaptable processes project group.
• The group met with the ATO Business Continuity team and were not aware of the extent of work the ATO conducts in the background to ensure business continuity in times of crisis.
• The group is considering what the long-term impacts will be. Currently lodgment and payments deferrals are in place – what will the long-term impact be in 12 months time?

Tax Practitioners Board update

Tax Practitioners Board (TPB) board member Debra Anderson thanked the ATO for having a representative at the TPSG meetings to provide an update on the TPB.

• The TPB consistently receives approximately 20 new tax practitioner registration requests a day.
• Working on the client verification process both with the ATO and internally. A practice note will be put out for consultation soon.
• There are 38 matters with the Administrative Appeals Tribunal (AAT) currently and the AAT is upholding all the TPB conduct matters. There are 529 investigations in progress.
• There is a growing trend of practitioners transitioning online including an increase in webinar attendees.
• The TPB is considering extending the annual declaration due date into 2021. Communications will issue shortly to advise of this change.

JobKeeper - JobMaker update

Deputy Commissioner James O’Halloran provided an update on JobKeeper and JobMaker.

JobKeeper 1 payments have been progressing well with around $70 billion having been paid, with 98% of payments made within four days. JobKeeper 2 has two characteristic changes:

• requirement for an employer to identify the two payment tiers
• turnover is now based on actual turnover; business will need to demonstrate they have experienced a decline in turnover and are required to reassess their eligibility.

The first payment to eligible organisations for JobKeeper 2 was made on 5 November 2020.

Businesses now need to specify if they are using an alternative turnover test to determine if they satisfy the actual decline in turnover test for the September 2020 quarter or the December 2020 quarter. There are eight alternative tests. Most businesses have indicated they are using the basic turnover test.

System outages

The ATO system maintenance on 4 November 2020 was advised via the tax professional newsletters and other communication channels. System maintenance is unavoidable; the ATO has issued communications that JobKeeper applications will continue to be accepted for the week following this system outage.

Members' comments

Members raised concerns that the planned system maintenance for January 2021 coincides with key reporting dates for JobKeeper payments. They also noted that some practitioners may not be prepared for these key dates due to end of year leave.

Tax gap estimates reported in the 2019–20 ATO annual report

Assistant Commissioner Anthony Siouclis and Director Darren Wheeler provided an update on Tax gap estimates reported in the 2019–20 ATO annual report. Members were provided with information and figures of how the tax gaps are broken down across the program.

The ATO recognises that tax gaps do not always arise from intentional taxpayer behaviour. Members were thanked for their insights which will be very helpful.

Members' comments

Members congratulated the ATO for releasing the tax gap estimates.

There has not been a lot of comment amongst corporate tax practitioners on tax gap. It is a challenge to start conversations on this matter; however, practitioners find the tax gap estimates an interesting area.

Professional associations do not come across the egregious segment of taxpayers. From a tax practitioner perspective and to assist with closing the tax gap, it would be helpful to know the tax gap outcomes and what areas the ATO identifies as a risk, how the ATO modifies risk scores and profiles, and how this then flows into the taxpayer population. This will assist tax practitioners and tax professional associations to work together with the ATO on closing the tax gap.

One member commented that tax practitioners being asked ‘why is there a tax gap’; and in their opinion, the gap is from small business and individual self-preparers and the organisation responsible for closing the gap is the ATO. Tax agents can only prepare returns with information provided to them.

A member stated the evidence from her practice and some practitioner colleagues is clients are attempting to manage their tax affairs themselves due to COVID-19. Clients have advised they cannot afford to pay a practitioner and will attempt to prepare their own activity statements. Members are interested to see what the tax gap will look like in a few years and where the tax gaps will be.

Members would like to be part of further discussion on this topic and would like to discuss where the tax gaps are regarding small business and fringe benefits tax. Deputy Commissioner Deborah Jenkins stated these discussions do happen in other groups and can be held with TPSG discussing from a tax practitioner and individuals’ perspective. However, we cannot go to policy as this would not be appropriate. The discussions can be on bringing about some change from the behaviour angle – on how we can change behaviours to influence compliance.

Stewardship group governance

Forum structure and membership review – Effectiveness and contribution of the Stewardship Group for 2020

The group discussed the effectiveness and contribution of the TPSG for 2020 and the upcoming membership refresh.

Some members may be hearing similar discussions multiple times across the various ATO stewardship groups as there is a crossover of topics between the groups. The ATO want to ensure the right participants are going to the right groups and members are not receiving the same messages multiple times. The aim is to have messages communicated to the right groups at the right time. This is a whole of ATO approach across all the ATO groups.

Membership principles of the group:

• Membership is refreshed at regular intervals, that is every two years.
• Membership includes the right expertise and experience. These experts may include professional associations, intermediaries, and academics. Professional associations are represented across appropriate forums.
• Groups collectively represent a variety of voices from within the tax community.
• The ATO co-chair may provide feedback to members or their associations on their contribution and attendance at meetings and may initiate changes where appropriate. The co-chairs can re-consider the membership of a member, and determine whether membership is to be adjusted, for example those who are repeatedly unable to attend meetings.
• Tax practitioner members should only hold membership of one main group; that is, TPSG, BAS Agent Association Group (BASAAG) or the Key Agent Program. Working group membership will be sourced as required and may include professionals who are not members of other groups.
• TPSG and BASAAG have an ATO and a non ATO co-chair.
• The ATO co-chair has the final decision on membership of the group.

Members' comments

Member suggested that meeting papers from the various ATO groups could be shared amongst the different groups.

Member stated the group has shown commitment to a cause in the best way to gather collective knowledge and make a difference to the tax system. Perhaps there could be more two-way communications, workshops, testing and exploring of ideas. Prefer less presentation papers prior to the meeting with more post meeting papers. Pre-reading could be kept to a summary of the agenda topic only with some focus questions to be discussed at meetings.

Member observed that the TPSG has been united, connected and achieved as a group through COVID-19. Having the infrastructure and relationship with the ATO through this group made interaction with the tax practitioner community a smoother process for JobKeeper. It is a credit to the ATO for all they have done to help the profession through COVID-19. The existence of these ATO groups and that they can work together in a crisis is critical. On reflection, governance for professional association members, regulations, compliance is critical. Would like to see more about the lodgment program, how the tear drop model is applied. There is enough information provided about a program of work but not enough on how the program is being regulated. Conversations on the lodgment program for companies and trusts at tax time would be useful. Other than those suggestions the group has worked well, and it has been a pleasure to be a member of the group.

Professional association representatives would like to be able to pass on comments and raise any frustrations from the association’s members to the ATO otherwise they do not feel they are representing members.

Member stated that something the group has done well this year is to build on the relationship between the ATO and the TPSG membership, which has allowed for open and honest discussions. These conversations have been invaluable to the profession and helped through COVID-19.

Other business and meeting close

Loss carry back budget measure

Assistant Commissioner Amy James-Velagic provided a confidential update on the loss carry back budget measure. The ATO will work together with members on this matter as soon as is practical.

Other business

Deputy Commissioner Deborah Jenkins thanked members for all their feedback during this ‘multiple speed economy’. Key messages for the group to communicate to clients at this time are:

• please continue to lodge
• please pay if possible, or if unable to pay please contact the ATO either directly or through a tax practitioner.

Members are encouraged to watch the Tax professionals conversations webcasts.

Meeting close

Co-chair Deputy Commissioner Hoa Wood thanked members for their hard work and dedication during 2020 as well as welcoming her to the group this year.

Co-chair Matthew Addison thanked all members for their contribution at meetings.

Attendees

Attendees list

Organisation	Attendee
ATO	Hoa Wood (Co-chair), Individuals and Intermediaries
ATO	Adam O'Grady, Individuals and Intermediaries
ATO	Amy James-Velagic, Private Wealth
ATO	Andrew Watson, Small Business
ATO	Anthony Siouclis, Individuals and Intermediaries
ATO	Audra Paskevicius (Secretariat), Individuals and Intermediaries
ATO	Darren Wheeler, Individuals and Intermediaries
ATO	Deborah Jenkins, Small Business
ATO	Elissa Walker, Small Business
ATO	Grant Brodie, Client Account Services
ATO	Jackie Hayward, Individuals and Intermediaries
ATO	James O'Halloran, Economic Stimulus Branch
ATO	John Dardo, Enterprise Solutions and Technology
ATO	Julia Donohue, Commonwealth Business Registry Service
ATO	Michelle Crosby, Commonwealth Business Registry Service
ATO	Sue Hassiotis, (Secretariat), Individuals and Intermediaries
ATO	Sylvia Gallagher, Individuals and Intermediaries
ATO	Vivek Chaudhary, Debt and Lodgment
Australian Bookkeepers Association	Peter Thorp
Chartered Accountants Australia and New Zealand	Karen Liew
CPA Australia	Elinor Kasapidis
H&R Block	Mark Chapman
Income Tax Professionals	Scott Bailey
Institute of Certified Bookkeepers	Matthew Addison (Co-chair)
Institute of Public Accountants	Tony Greco
National Tax and Accountants Association	Rodney Wilson
Tax & Super Australia	John Jeffreys
Tax practitioner	Gavin Swan
Tax practitioner	Keith Clissold
Tax practitioner	Ken Thomas
Tax practitioner	Mark Morris
Tax practitioner	Phil McCann
Tax practitioner	Shanna Hunter
Tax practitioner	Warren Seeto
Tax Practitioners Board	Debra Anderson
The Tax Institute	Robyn Jacobson

Apology

Apologies list.

Organisation	Member
ATO	Alex Adams, Enterprise Solutions and Technology
ATO	John Ford, Superannuation and Employer Obligations
ATO	Kath Anderson, Individuals and Intermediaries
Chartered Accountants Australia and New Zealand	Michael Croker
Tax practitioner	Steven Inglis

Summary of key topics discussed at the Tax Practitioner Stewardship Group meeting 13 November 2020.