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  • Agenda items

    1. Welcome and introductions

    One action item was carried over from the meeting held on 21 August 2015 and six items from the meeting held 27 November 2015. We propose to close all items.

    Action items

    Reference

    ATPAG 2108/02

    Agenda topic

    Item 7 – Aggressive Tax Planning

    Action item

    The ATO to investigate whether the shareholder tax position in relation to the franking credit benefit scheme outlined in the Taxpayer Alert TA 2015/2 is ready to be shared externally.

    Responsibility

    Michael Cranston

    Update

    Update re shareholder tax position

    The ATO is still determining its position with respect to the arrangements outlined in Taxpayer Alert 2015/2. However, generally in similar situations it has been the ATO’s practice to make a determination in respect of the corporate entity’s franking account rather than have any determination made at the shareholder level.

    Currently, it is likely that determinations would only be made at the shareholder level for the most egregious of arrangements or those that involve significant streaming where the attributes of the shareholder are one of the reasons for the streaming.

    Specifically, for those transactions undertaken prior to the issuance of the Taxpayer Alert 2015/2, we do not envisage that any determinations will be made for those transactions to deny franking credits at the shareholder level.

    Update re additional market guidance

    The ATO will be issuing additional market guidance for payer companies, e.g. those entities paying franked distributions funded by linked capital raisings (i.e. as a follow-on from TA 2015/2) in early 2016 to provide further certainty regarding those transactions which we consider to be low compliance risk, and those we consider to be high compliance risk.

    Status

    Closed

     

    Reference

    ATPAG 2711/01

    Agenda topic

    Item 2 – Digital services

    Action item

    Form a limited life working group with tax practitioners and professional association representatives to conduct some preliminary co-design work for the whole of Government relationship and authentication framework and solution.

    Responsibility

    John Dardo

    Update

    The ATO is engaging with tax practitioners and professional association representatives for Authentication and Authorisation services. The first consultation is on the Manage ABN Connections project with a range of industry stakeholders invited to discuss using myGov as an alternative to AUSkey. This is scheduled for 25 February in Sydney with a follow up session with ATPAG members on 26 February. Further consultation will then be planned.

    Status

    Closed

     

    Reference

    ATPAG 2711/02

    Agenda topic

    Item 2 – Digital services

    Action item

    Test a prototype of the ‘Manage ABN connections’ service with tax practitioner members.

    Responsibility

    John Dardo

    Update

    Testing of the Manage ABN Connections prototype will occur during the consultation with tax practitioners and professional association representatives on 25 February.

    Status

    Closed

     

    Reference

    ATPAG 2711/03

    Agenda topic

    Item 2 – Digital services

    Action item

    Advise members when Treasury release the digital by default consultation paper.

    Responsibility

    Renee Bruce

    Update

    Link to the consultation paper on the Treasury website was issued to members in the key messages following the meeting.

    Status

    Closed

     

    Reference

    ATPAG 2711/04

    Agenda topic

    Item 3 – GST research

    Action item

    Further analyse research results showing more believe that it is normal to use the cash economy to avoid meeting GST obligations to identify if the increases are occurring in the tax agent, BAS agent or small business respondent groups.

    Update

    The increases to the question ‘it is normal to use the cash economy to avoid meeting GST obligations’ is occurring in the business population. Business has the view that the cash economy is reasonably wide spread even though 98% of these businesses say they do not deal with the cash economy themselves. There was a spike in net agreement with ‘very few businesses would bother about recording all cash transactions on their BAS’ in 2015 (34%), which was up significantly from 2014 (27%).

    Tax and BAS agents do not view the use of the cash economy to gain a tax advantage to be as wide spread as business.

    Social norms are impacting on cash economy. The most common social norm was ‘It’s normal for tradies to give a discount if people offer to pay in cash’ which achieved 36% net agreement in 2015, which is only slightly below benchmark of 38%. However, positive shifts in attitudes towards this statement were evident via an increase in ‘strong disagreement’ to 25% in 2015, up significant from 18% in 2011, coupled with a significant drop in ‘don’t know’ to 6%.

    The research suggests the potential need to continue addressing the ‘cash economy’.

    Responsibility

    Paul Southwell

    Status

    Closed

     

    Reference

    ATPAG 2711/05

    Agenda topic

    Item 4 – Improving the business experience

    Action item

    The list of initiatives to ‘Fix the basics’ will be shared with members.

    Responsibility

    Judy O’Connell

    Update

    A list of initiatives was sent to members with the agenda papers on 19 February 2016.

    Status

    Closed

    2. Single Touch Payroll

    On 21 December 2015, the Minister for Small Business and Assistant Treasurer, Kelly O’Dwyer announced the implementation of single touch payroll to streamline employers reporting obligations to the ATO.

    The single touch payroll initiative supports the Government’s digital transformation agenda, designed to drive innovation and make it easier for individuals and businesses to access government services.

    Subject to legislation being available, by July 2017 ATO systems will be in place to support any employers who want to start reporting electronically and realising benefits. In early 2017 the ATO will be running a pilot with small businesses with less than 20 employees to further test impacts and benefits of implementing single touch payroll.

    Other employers will be able to join the pilot but predominantly the focus is on understanding the benefits to small business and to report back to Government before any further decisions are made to proceed with this segment of employers

    It is expected legislation to support single touch payroll will now be tabled in the winter sitting of Parliament 2016.

    The announced timeframes will see businesses with 20 or more employees be required to use single touch payroll enabled software for reporting to the ATO from 1 July 20018.

    Discussions are continuing with software developers to explore design options for reporting payroll information. The ability to transmit reports through standard business reporting to the ATO will be enabled by software providers. A $100 offset will be introduced to help with the cost of new standard business reporting enabled software for small businesses with a turnover of less than $2million in the 2017-2018 financial year.

    The ATO will use the learnings from businesses that transitioned to SuperStream to help employers make the change to digital reporting for payroll obligations.

    Part of the single touch payroll initiative will make it easier for employees when commencing new employment. Employees will have the opportunity to complete their tax file number (TFN) declaration and super choice electronically via myGov or their employer’s compatible business management software. If an employee chooses to complete the TFN declaration using myGov they will have information validated and sent to their employer. In addition myGov will display an employee’s known superannuation accounts to assist with their super fund choice and notification to the employer at the same time. Making this information available on the commencement of employment should assist with the proliferation of new super accounts and may also lead employees to consider consolidating their multiple superannuation accounts.

    These electronic solutions are expected make it easier for employers to fulfil reporting obligations when taking on new employees.

    In an environment of significant change, the ATO is committed to continue consultations with the diverse range of stakeholders dealing with payroll to understand the needs of the community.

    Members discussed their practical experience working with employers and payroll and the potential costs and benefits of this initiative.

      Last modified: 12 May 2016QC 48959