Welcome and introduction
Co-chair Deputy Commissioner Hoa Wood welcomed attendees and welcomed Gavin Swan to the role of co-chair of the group.
Co-chair Gavin Swan thanked Hoa Wood for the opportunity and thanked previous co-chair Matthew Addison for his leadership in the co-chair role over the last three years and the support offered to him since taking over the role.
Budget 2021–22
Assistant Commissioner Rowan Fox provided an overview of the 2021–22 Federal Budget announcements and discussed new measures impacting the tax profession.
Members were provided with a 2021–22 Federal Budget briefing pack, listing both significant and minor measures and a description and start date for measures that may impact the ATO. The main measures discussed included:
- Not-for-profits – enhancing the transparency of income tax exemptions
- Modernising the individual tax residency rules
- Digital Economy Strategy; Small and Medium Enterprise digitalisation – promoting and accelerating the adoption of e-invoicing
- Removing the $450 per month threshold for superannuation guarantee eligibility
- Retaining the low and middle-income tax offset for the 2021–22 income year
MBR program and director identification
Assistant Commissioner Damien Hobbin provided an update on the progress of the Modernising Business Registers (MBR) program.
On 4 April 2021, the Commissioner of Taxation was appointed as the Registrar of the Australian Business Registry Services (ABRS).
On 15 April 2021, a Machinery of Government administrative change took place. Australian Security and Investments Commission (ASIC) staff moved to the ATO to assist the new Registrar to carry out his responsibilities. These moves are important steps in the process of amalgamating the Australian Business Register (ABR) and 31 ASIC registers.
The Director identification (director ID) ID program is the next tranche in the MBR program. The intent of this program is to combat illegal phoenix activity by strengthening the identification process for directors. This component of the program is laying the foundation of the technology platform, which will be used in the long term to bring all registers together into the one system. Directors will be required to apply for a director ID as a once off, with their allocated director ID remaining with them forever.
Integrating the myGovID credential is an essential part of the design within the director ID framework to ensure security and identity protection.
On 20 April 2021 private beta testing of director ID commenced with a small cohort of directors testing the user experience and back end processes on the platform. This process has already identified minor anomalies which will be rectified prior to moving to the public beta testing phase, which is expected to be later this year following further consultation. With 2.7 million directors proposed to use director ID, the implementation phase will be staggered and broken down to several different segments.
The ATO acknowledge that the role of tax professionals in supporting and guiding directors through this process is going to be very important. There are plans for support material, engagement forums and on-boarding communications prior to commencing the public beta.
Director Doug Wickham provided members with a demonstration of the digital director ID application process.
Member comments
- Members raised concerns on how to inform directors of the requirement to obtain a director ID and their response to having to apply for themselves, without an agent being able to do so on their behalf. The ATO needs to engage with agents to dispel apprehension that they are being by-passed in the process.
- Members suggested that communication regarding the requirement to obtain a myGovID needs to be shared now so that directors have time to prepare if needed.
- Members commented that they did not feel that agents were considered as part of the solution in the design process of the program, and requested to be included in providing insights into the future design phase, noting that agents will be instrumental in assisting directors through the application process when applying for a director ID.
- Members recommended that the information required for the application process should be highlighted on the first screen of the tool and not just on the ATO website. They queried the use of pay as you go summaries in the application process and not the use of income statements.
Further consultation will be arranged with Tax Practitioner Stewardship Group members to provide input into the implementation plan and application design to enhance the user experience prior to the public beta phase of the implementation.
Understanding behavioural drivers of the GST gap
Deputy Commissioner, Small Business, Deborah Jenkins, Assistant Commissioner, Small Business, Sue Goodear and Director, GST Program, Mario Rinaudo, provided background information and a general update on the performance of the GST gap.
Estimates of the GST gap have been published since 2012 using methodology utilising external Australian Bureau of Statistics benchmark data. The methodology does not provide enough insight into behaviours, sectors, risks and markets that drive non-compliance, making it difficult to build strategies to reduce the GST gap and to improve voluntary compliance.
The project aim is to align the GST gap with the wider ATO tax gap program, by expanding analysis. The analysis will provide insights and intelligence to determine the behaviours that cause the GST gap and implement solutions to improve the performance of the GST system.
The GST gap is across all groups, small and large business, private wealth groups, government and not-for-profit, making it complex to develop a single suitable strategy which encompasses all segments in terms of compliance.
Members discussed their professional experiences and provided valuable insights on the behavioural drivers they are seeing within the community. Further consultation will be carried out with other stewardship groups to gather further information and insights.
Member comments
- Similar themes were discussed by members with the main message being lack of education on complex GST areas – property transactions are confusing and generate a lot of technical issues. They highlighted it is important to get the fundamentals right.
- Members perceived that lack of knowledge and engrained behaviour with errors being duplicated, was more of a cause than opportunistic behaviour.
Disclosure of business tax debts
Deputy Commissioner Vivek Chaudhary and Assistant Commissioner Alex Pereira provided an update on the intent to disclose business tax debts to Credit Reporting Bureaus (CRBs) under the Disclosure of Business Tax Debt measure.
The Disclosure of Business Tax Debts measure received Royal Assent on 28 October 2019 and the Legislative Instrument was registered on 23 December 2019 with the measure taking effect 21 February 2020.
The ATO has yet to disclose tax debts to CRBs with the intention being to align commencement with the ATO’s approach to restart Debt and Lodgment compliance action in the post COVID-19 pandemic period.
The measure allows the Commissioner of Taxation to report tax debt information to CRBs if the business meets all the following legal criteria:
- Has an Australian Business Number (ABN) and is not an excluded entity.
- Has one or more tax debts, the total of which is at least $100,000 that have been due and payable (overdue) for more than 90 days.
- Does not have an active complaint with the Inspector General of Taxation and Taxation Ombudsman about the proposed disclosure of its tax debt information.
- Is not engaged in managing the tax debt (payment plan, dispute or review/objection).
Businesses that meet the criteria will be notified in writing and given 28 days to engage with the ATO. They will need to take action to pay their debt or set up a payment plan to avoid having their tax debt reported. Businesses that are actively working with the ATO to pay their tax debt will not be reported.
This will be a two-stage approach with a small-scale approach to be implemented from May 2021 to coincide with the resumption of ATO debt and lodgment engagement activities. A more scalable solution will be implemented between December 2021 and March 2022.
Member comments
- Members provided feedback that wording used in communications regarding the measure should acknowledge that the community is still feeling the effects of the COVID-19 pandemic.
- Members suggested highlighting the role of agents be included in communication where businesses are not engaging with the ATO regarding debt.
- Tax Professional Association representatives offered to assist with communicating the consequences of not engaging with the ATO regarding outstanding debts.
Superannuation and Employer Obligations
Deputy Commissioner Dana Fleming, Assistant Commissioner Sonia Corsini and Director Tim Pulsford provided an update on the indexation of the superannuation contribution caps, Part 7 penalties and Superannuation Clearing Houses.
Indexation of the superannuation contribution caps
Super contribution caps will be indexed from 1 July 2021 in line with legislative increases in average weekly ordinary time earnings.
The concessional contribution cap will increase from $25,000 to $27,500 and the non-concessional contribution cap will change from $100,000 to $110,000. As a result, the total superannuation balance limit that determines if an individual has a non-concessional contribution cap of nil will also increase from $1.6 million to $1.7 million. These increases may impact eligibility for bring forward non-concessional contribution arrangements.
The ATO has started a broad communication on this area through our social media channels. In Online services for individuals you will see the concessional contribution cap and how much cap space is available for each individual as well as any carried forward concessional contribution.
Any bring forward arrangements triggered before 1 July 2021 will not have access to any additional cap space as a result of the increase to the non-concessional cap.
In relation to unused concessional contributions that can be carried forward, the current total superannuation balance threshold is not subject to indexation and therefore is not changing – an individual will still need to have a total superannuation balance of less than $500,000 at 30 June in order to access any unused concessional contributions cap space from a previous year.
Clients will not be able to view their updated transfer balance cap from 1 July 2021 –the updated cap will show from 5 July 2021.
Part 7 penalties
The ATO received significant feedback on to Part 7 penalties that applied for the period following the end of the amnesty. Based on this feedback, it was noted that there is a need to differentiate behaviours and apply penalties accordingly.
Members stated that education is key and recommended a communications campaign on obligations; what to do, and what not to do.
Super clearing houses
Members discussed experiences and issues with super clearing houses.
The Superannuation Guarantee (Administration) Act 1992 deems payment to be made when received by the fund, not when payment is made. Education is needed to educate employers there is a lag between commercial clearing houses receiving payments and sending the contributions to the funds, noting that it is not recognised until received into the member’s account.
Members recommended that the ATO facilitate having the commercial providers as ‘approved clearing houses’ to provide employers with certainty that their obligations are met when the contribution is paid to the clearing house.
Intermediaries experience and vision
Assistant Commissioner Sylvia Gallagher discussed with members the development of a vision to shape the partnership for the ATO working together with the profession leading into 2024.
These 2024 aspirations will serve as a touch point for the ATO to assess and connect various initiatives that impact on the tax professional experience to ensure that they are in alignment and directed towards delivering a contemporary and meaningful interaction between the ATO and the tax profession.
Member comments
- Members welcomed the recognition of the role of tax professionals and provided positive feedback on the collaborative approach to incorporate intermediaries to help the ATO deliver its deliverables. They would like to see ‘working together in a partnership’ demonstrated in every aspect of the ATO with, for example, tax practitioners mentioned in fact and guidance sheets.
- Members noted the challenge will be to have people beyond the group understand the journey and vision.
ATO
Tax Time 2021 communications
Assistant Commissioner Sally Bektas and Director Michael Job provided an update on the Tax Time 2021 communications strategy.
Tax time communications will promote self-service across all channels coupled with a strong focus on help and support, but also remind the community of key compliance risks and focal areas for the ATO.
For tax professionals and practitioners, the strategy is to focus on communications that enable the agent to provide the right advice, lodge accurately and on time and will include a range of support options available for tax professionals through the Tax Time 2021 period.
The tax professional segment on ato.gov.au is the source of truth for all tax time related information and can be easily accessed at Tax Time 2021.
Resources available for Tax Time 2021 include:
- tax time quick tips videos – short videos promoting key tax time messages for agents
- updated occupational posters
- the ATO podcast channel Tax inVoice, including episodes specifically for tax professionals
- small business newsroom as the main channel of communication for small businesses
- 2021 small business Tax Time toolkit.
Intermediaries Engagement Strategy
Director Ben Spargo provided an update on the Shadow (Black) Economy Agent engagement approach and communication strategy.
One strategy will be a firmer prompter letter highlighting clients who have identified as having comparatively low levels of net business income being reported compared to their industry peers. This is aimed at prompting action on these clients and to remind the agent about their obligations when preparing returns in the future.
The ATO has recommenced an engage and review strategy involving a call or visit to a tax agent to provide a practice summary list of medium to high risk clients and seeking an explanation and proposed remediation from the agent.
Work is being undertaken to provide agents with a risk summary of where they sit on the ‘teardrop’ agents of interest model. Further consultation will be conducted with members on how practice risk summaries may be used in the future.
The initial focus of the ATO’s communication strategy will be about creating awareness of agent behaviours that might attract attention. The aim is to prompt agents to consider their practice processes, controls and behaviours, and assess any that are likely to result in them being included in an agent-focussed strategy.
The ATO is looking to work with tax professional associations to review guidance material being provided to members and align messaging to reinforce checks and controls members should do when taking on new clients and preparing forms and returns.
The ATO strategy to address high risk agents includes working closely with the Tax Practitioners Board (TPB) to share intelligence early and ensure that the highest risk practitioners are addressed. Where the ATO identifies inappropriate behaviours or actions of a registered tax agent, they are referred to the TPB.
Supporting the tax profession
Members were asked to refer to papers issued with the agenda for a summary update on the Intermediaries Adverse Event Response Framework (the Framework) being developed by the Supporting the Tax Profession working group.
The Framework leverages on the ATO’s relationship with the tax profession to enhance its response following the occurrence of an adverse event, while also improving support provided to tax professionals to assist them to support their clients in meeting their tax and super obligations.
It encompasses processes to:
- respond to an adverse event in the immediate period by convening a Rapid Response Group (made up of members from the profession/associations and the ATO) that assesses the event, provides insight on the impact/s, proposed treatments, response activities, and supports delivery of key messages
- work with representatives from the tax profession to assess, analyse and understand the long-term impacts from the adverse event on the tax profession, community and ATO, and inform ATO strategies towards recovery from the event
- inform ATO’s communication approach to deliver the required immediate response and over the recovery period from the event
- ensure focus on mental health and wellbeing is considered and incorporated in response, support and communication activities – leveraging on the tax profession associations coverage and networks to expand the reach of engagement.
Lodgment Program Review
Members were asked to refer to papers issued with the agenda for an update on the Lodgment Program Review and establishment of the Lodgment Working Group.
The Lodgment Program Review will undertake a consultative and collaborative analysis and review of the ATO's Lodgment Program.
Initially, the review will examine the operation of the program from the ATO, tax practitioners and clients' perspective, to identify gaps and opportunities and prioritise these for inclusion on the Lodgment Review Program of work.
Communication preferences
Assistant Commissioner, Sarah Vawser and Director Mark Ayers provided an update on Communication preferencing.
Communication preferencing has been available in Online services for agents since March 2020.
Over 11,000 agents have interacted with the feature through the last year and have set client preferences for over 780,000 clients with approximately 800,000 pieces of correspondence issuing via the agent digital channel.
From July 2021, digital service providers will have the ability to include communication preferences and history in their software services.
To ensure notices are served in accordance with the law, the preferred address for digital communication needs to be specified. Only Online services for agents can be designated as the preferred electronic address for service for agents to receive certain communications digitally on behalf of their clients.
The current declaration in Online services for agents will be changed to make it clear to agents that setting preferences to ‘Practice' will designate Online services for agents as their client’s preferred address for service for certain digital correspondence. Express written authority from clients is still required.
To improve the agent experience future changes will include:
- updates to the client mail inbox, to only show notifications to the agent who has been sent the communication
- communication history – to allow agents to identify what communications have been sent to them, and which communications have been sent to another agent.
Member comments
Members recommended the establishment of a central government mailbox; providing one channel for digital correspondence delivery and providing agents with authority and access to all correspondence.
Tax Practitioners Board
Tax Practitioners Board (TPB) board member Debra Anderson provided an update on TPB activities.
The TPB is currently addressing expired Professional Indemnity Insurance (PII) with a range of strategies including targeted letters and SMS messages and reminders.
In 2020, the TPB ran an online campaign to encourage taxpayers to ensure that their tax agent was registered. This campaign will be re-run during June and July 2021.
Subjecting application fees to an annual consumer price index adjustment was introduced by the government in the 2018–19 Federal Budget, following an initial increase in fees which took place on 1 July 2018.
The ATO has shared various intelligence with the TPB; identifying tax practitioners that may be undermining the stimulus measures on behalf of clients and/or themselves. As a result, the TPB currently has 95 active COVID-19 compliance cases.
The TPB education working group continues to work with key stakeholders, including the recognised professional associations and the education sector, in its review of the TPB’s requirements for courses approved by the TPB for tax and BAS agents and the primary qualifications.
Member comments
Members commented that they hear about egregious agents but rarely about good agents and asked the TPB to think about how positive messages about agents can be promoted.
Other business
Economic stimulus payments
Deputy Commissioner, James O’Halloran provided an update on the economic stimulus payments and thanked agents and professional associations for their help in 2020 with delivery of the measures.
The majority of stimulus payments have now concluded although the JobMaker Hiring Credit continues with a relatively low increase in registration rates. Letters have been issued to advise if Services Australia disagree that a new hire is eligible for a payment.
Some businesses may now be eligible for JobKeeper payments or cash flow boost credits if all other eligibility conditions for JobKeeper and cash flow boost are met.
The ATO will contact those impacted when we have completed our review, or if we need more information. Registrants will be notified the application has been reviewed and granted and they can now progress to make a claim as a result of eligibility criteria being checked.
Single Touch Payroll
On 7 May 2021, the ATO contacted agents to advise of their clients’ status for Single Touch Payroll (STP) phase 1. Reminder letters will issue on the 26 May 2021 to approximately 67,000 employers to commence STP reporting. This mail out will cover employers who do not currently have a deferral or concession in place.
Agent deferrals and communications
The ATO has issued communications on support options available to agents and how to access agent deferrals. The ATO will provide help for practices through the Tax Practitioner Assistance Team.
Member comments
Members asked that the ATO ensure that information on ato.gov.au has all the information on options available to agents and instructions on how to apply for a deferral.
Meeting close
Co-chair Deputy Commissioner Hoa Wood thanked members for their attendance and contribution.
Attendees
Organisation |
Member |
|---|---|
ATO |
Hoa Wood (Co-chair), Individuals and Intermediaries |
ATO |
Audra Paskevicius (Secretariat), Individuals and Intermediaries |
ATO |
Dana Fleming, Superannuation and Employer Obligations |
ATO |
Deborah Jenkins, Small Business |
ATO |
Grant Brodie, Client Account Services |
ATO |
Sylvia Gallagher, Individuals and Intermediaries |
ATO |
Vivek Chaudhary, Debt and Lodgment |
Australian Bookkeepers Association |
Peter Thorp |
Chartered Accountants Australia and New Zealand |
Michael Croker |
CPA Australia |
Elinor Kasapidis |
Income Tax Professionals |
Scott Bailey |
Institute of Certified Bookkeepers |
Matthew Addison |
Institute of Public Accountants Australia |
Irwin Bushnell |
National Tax and Accountants Association |
Siobhan Simpson |
Tax & Super Australia |
Neville Birthisel |
Tax practitioner |
Gavin Swan (Co-chair) |
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 |
Guest attendees
Organisation |
Attendee |
|---|---|
ATO |
Adam Kendrick, Individuals and Intermediaries |
ATO |
Alex Pereira, Debt and Lodgment |
ATO |
Ben Spargo, Individuals and Intermediaries |
ATO |
Damien Hobbin, Enterprise Solutions and Technology |
ATO |
Doug Wickham, Australian Business Registry Services |
ATO |
Ken Kua, Individuals and Intermediaries |
ATO |
Lisa Misson, Enterprise Strategy and Design |
ATO |
Mario Rinaudo, Small Business |
ATO |
Mark Ayers, Strategy and Support |
ATO |
Rowan Fox, Policy, Analysis and Legislation |
ATO |
Sally Bektas, ATO Corporate |
ATO |
Sarah Vawser, Strategy and Support |
ATO |
Sonia Corsini, Superannuation and Employer Obligations |
ATO |
Sue Goodear, Small Business |
ATO |
Siobhan Spencer-Arnell (Secretariat), Individuals and Intermediaries |
ATO |
Tammy Gardner, Australian Business Registry Services |
ATO |
Tim Pulsford, Superannuation and Employer Obligations |
ATO |
Tina Ford-Doe, Individuals and Intermediaries |
Apologies
Organisation |
Member |
|---|---|
ATO |
Michelle Crosby, Australian Business Registry Services |
H&R Block |
Mark Chapman |
Institute of Public Accountants |
Tony Greco |
National Tax and Accountants Association |
Rodney Wilson |
Tax practitioner |
Steven Inglis |