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  • Individuals Stewardship Group key messages 10 July 2018

    The Individuals Stewardship Group met on Tuesday 10 July 2018, co-chaired by Alison Lendon, ATO and Craig Hall, National Seniors Australia.

    Getting to know our members

    CARE Financial Counselling work with people on moderate incomes experiencing financial difficulty. Often clients seek the service because they have had a change of circumstances (for example relationship breakup), have a lack of financial literacy or are looking for help for someone to advocate on their behalf. CARE also provides Tax Help services and work with the ATO on debt and non-lodgment issues on behalf of clients.

    Schools strategy

    The ATO provides a comprehensive range of help and education services to the community including the schools program, Tax Help, attendance at expos and events, the culturally and linguistically diverse program and pop-up centres.

    The vision for its schools’ strategy is that every child understands and values Australia’s tax and super systems prior to participating in them. The approach to deliver on this vision includes:

    • ensuring tax and super are taught to all students by the time they leave secondary school by making the teaching of tax and super a compulsory part of the curriculum
    • co-designing products and services that are attractive and easy to use, and
    • improving the awareness, adoption and accessibility of products and services.

    The ATO walked members through the Tax, Super and You online resources for secondary students. The ATO noted that they are developing a similar product for primary school students which is focussed on teaching fairness and values.

    Members supported this work and provided suggestions on the development of these products.

    Tax Time communication and our compliance approaches

    The ATO highlighted what was new in Tax Time this year, including improvements to online services for agents and the transition to the Practitioner Lodgment Service, further ‘push returns’ for those with refund of excess franking credits, enhancements to myTax tools, calculators and analytics.

    An example of the recently launched Tax Time toolkits was provided to members. The toolkits provide practical and tailored information to help people prepare and lodge their tax return. The toolkits include occupation guides providing information about common deductions including work-related expenses.

    An update was provided on the ATO’s compliance approaches for the year ahead. This includes a focus on helping taxpayers get it right, including the use of analytics to provide messages to taxpayers who self-prepare their tax return if their claims are higher than expected for their peers. Advanced analytics is also being used to amend returns before they are finalised, where we have identified a mistake in the return based on data received from third parties, eg omitted bank interest. The ATO have received additional government funding to help address high error rates in deduction claims for work-related expenses.

    Members provided positive feedback on the Tax Time toolkits and compliance approaches that stop potential debt situations for taxpayers.

    Penalty relief initiative

    The ATO gave an overview of the penalty relief initiative that started on 1 July 2018. It means the ATO will not apply a penalty for eligible individuals or small businesses who fail to take reasonable care or don’t establish a reasonably arguable position for inadvertent errors made in both income tax returns and activity statements.

    Penalty relief will be applied automatically and there is no need for taxpayers to apply for penalty relief. There is a three year reset period, so penalty relief will be granted once every three years for eligible taxpayers. This is in line with community feedback and user testing.

    The main focus of this initiative is to support the taxpayer to get it right. It will be used as an opportunity to engage with the taxpayer, explain the error and help educate them so that they can get it right in the future.

    Penalty relief is in addition to already established taxpayer rights, ie objections and appeals processes as well as safe harbour and voluntary disclosure provisions.

    Members provided positive feedback on the initiative.

    Payment thinking strategy

    Currently, less than 70% of individual taxpayers who received a tax bill pay on time and the ATO have been working on a strategy ‘Payment thinking’ which helps taxpayers meet their obligations by making it easier for them to pay on time. It is about shifting the focus from ‘debt’ to ‘payment’ with the aim of preventing debt situations occurring in the first place.

    Payment thinking can already be seen in action through pay as you go withholding at source, providing greater certainty through reminders, help and assistance including payment plans as well as communication and education.

    Members provided ideas on potential future options for payment thinking.

    The next meeting will be held on 13 November 2018.

      Last modified: 03 Oct 2018QC 56917