Show download pdf controls
  • Tax Practitioner Stewardship Group key messages 31 May 2019

    Tax Time 2019

    The ATO provided an overview of the preparations for Tax Time 2019 including:

    • business readiness
    • system readiness
    • key changes to the client experience.

    In considering business readiness the ATO has put plans in place to service an expected increase in phone calls and processing work. The expected increase in phone calls to the client contact centres is likely to be partly due to:

    • Single Touch Payroll
    • income statements available online
    • deferrals and exemptions
    • reporting changes
    • real time view of super
    • on-boarding for small and medium employers
    • myGov multifactor authentication
    • superannuation
    • scams.

    The expected increase in processing work is likely to be partly due to:

    • Single Touch Payroll deferrals and exemptions
    • superannuation work and new measures
    • Tax File Number and Australian Business Number registration increases
    • changes to Australian Business Number process of entitlement and cancellation
    • preparation for activity statement financial processing deployment that brings the majority of client account information into one system.

    The ATO confirmed that until the new increased Low and Middle Income Tax Offset amounts announced in the Federal Budget 2019-20 become law, the ATO will issue assessments with the current amounts (which range from $200 to $530). Should the law with the increased amounts receive Royal Assent after 1 July 2019, taxpayers who have already lodged income tax returns and received assessments will not need to request amendments. The ATO will be able to identify those who are eligible for an amendment and do this automatically to allow for the increased amounts ranging from $255 to $1080.

    ATO debt strategies

    Payment Thinking is a key component of the 2024 vision where tax and super just happens.

    It is about designing processes, systems and approaches that make payment an easy and natural part of activities across all stages of taxation and superannuation.

    This includes:

    • improving the client experience by making it simple to pay and hard not to
    • working towards a system where tax (including payment) just happens
    • using data to tailor the client experience and prevent debts from occurring
    • bringing the payment conversation closer to the liability being raised.

    The ATO currently takes a tailored approach to debt. Client’s behaviour, individual circumstances and lodgment and payment history are used to determine the most appropriate action for a tax debt. In 2017-18 over $500 billion in liabilities were due, with 89.5% paid on time and 95.9% paid within 90 days after the due date. Shifting payment on time by 1% is worth $5.1 billion.

    The scope of the ATO approach to Payment Thinking is to:

    • develop systems that offer clients the choice to pay tax and superannuation obligations either by allowing payments at the time of an event or through an automated/scheduled future payment
    • develop tools and services for clients to understand their tax position throughout the year managing deductions and credits
    • develop tools for staff to understand the client’s position and payment risk
    • develop tools for intermediaries to effectively support clients to meet obligations
    • outbound communication that reference payment events
    • consider new legislative and/or policy proposals
    • improve digital services
    • offer access to contemporary payment channels and eSign.

    New Online Services planned for 2019/2020 will allow Tax and BAS Agents to:

    • view more client accounts and collection status
    • have improved visibility of the status of payment plan instalments
    • access payment plan functionality for all client types
    • schedule payments
    • make payment plans that are tailored for the client, provide a historical view and are able to be modified and cancelled
    • include opening and closing balance on activity statements lodged digitally.

    Individuals will be able to:

    • schedule payments
    • make payment plans that are tailored for the client, provide a historical view and are able to be modified and cancelled
    • have improved visibility of the status of payment plan instalments
    • receive ATO reminders
    • view account balances before and after lodging activity statement.

    Superannuation

    Updates were provided on the following superannuation topics:

    • ATO Online for agents
    • Single Touch Payroll implementation
    • Protecting Your Superannuation package
    • self-managed superannuation fund
      • annual return lodgment
      • improving the approved auditor experience
      • approved auditor actions
      • better visibility of disqualified trustees.
    • superannuation guarantee
      • enforcement tools for the ATO
      • direction to educate
      • direction to pay
      • change to director penalty provisions
      • enhancements to enforceability of security deposits
      • disclosure of information about non-compliance
      • enforcement action
      • amnesty.
    • Royal Commission final report
    • Productivity Commission final report
    • Limited Recourse Borrowing Arrangement Report
    • Legislation proposed or previously before Parliament
    • First Home Super Saver scheme.

    Detailed information on any of the superannuation topics listed above is available on request from the TPSG secretariat.

    On Wednesday 13 March 2019 Deputy Commissioner James O’Halloran gave a presentation to the conference of major superannuation funds and the Australian Institute of Superannuation Trustees in relation to Transparency and trust in superannuation – an approach and a must.

    Superannuation guarantee direction to educate

    Superannuation guarantee integrity legislation received Royal Assent on 1 March 2019. The legislation commenced on 1 April 2019 and provides, amongst other reforms, discretion for the Commissioner to direct employers who have failed to comply with their superannuation guarantee obligations to undertake an approved education course.

    To support the Commissioner’s direction to educate, the ATO has produced an on-line education course covering an employer’s obligation to provide superannuation support for their eligible employees under the superannuation guarantee law. The course is intended to improve understanding of an employer’s obligations thereby reducing future non-compliance.

    The Superannuation guarantee employer obligations - online course is currently available on ato.gov.au for employers and others. The ATO welcomes feedback regarding:

    • the suitability for small business employers
    • covering the key aspects of law
    • the structure and flow of information
    • the time it would take to complete the course
    • any other aspects that may improve the product.

    Courses developed by other organisations may be approved for the purpose of the superannuation guarantee education direction.

    Single Touch Payroll

    The Commissioner released a statement highlighting the approach the ATO will be taking for small businesses transitioning to Single Touch Payroll.

    In May 2019, the ATO provided all registered tax and BAS agents with a list of their clients that lodged a payment summary annual report in 2017-2018, their current payroll reporting status and the recommendation to group clients into:

    • start reporting now
    • need more time, or
    • quarterly reporting.

    Small employers will need to start reporting or engage with the ATO by 30 September 2019. If small employers can not start reporting by this time, they will need to apply for a later start date. The ATO has published a list of no-cost and low-cost options for micro employers and put in place a number of concessional options for employers with closely held payees. Micro employers can report quarterly through their tax or BAS agent when they submit their business activity statement for the first year.

    Small employers that make a genuine attempt to report Single Touch Payroll events will not be penalised for mistakes, missed or late reports for the first year. The ATO will provide exemptions from Single Touch Payroll reporting for employers experiencing hardship, or in areas with intermittent or no internet connection.

    The ATO has produced an extensive suite of products to support employers and employees understand the changes to their payroll reporting and end of financial year experience.

    For more information, refer to:

    Whistleblowing and Tax Integrity Centre

    From 1 July 2019, new arrangements to better protect individuals who disclose information to us on tax avoidance behaviour and other tax issues will begin.

    This law relates to provision of information about potential tax evasion. It operates independently of the Public Interest Disclosure Act which is an established whistleblower regime for public officials to disclose suspected wrongdoing by another public official or by an Australian government agency.

    In order to qualify for protection as a tax whistleblower, certain conditions must be satisfied. An individual must:

    • be, or have been, in a specific relationship with the entity you are reporting about, for example, you are an employee or former employee, or a dependant or spouse
    • report the entity to us or to an eligible recipient
    • consider that the information will help us or the recipient perform their duties under taxation law.

    Disclosures by eligible tax whistleblowers made to eligible recipients also qualify for protection. An eligible recipient is someone in a position to take appropriate action. Eligible recipients are generally internal to the entity about which the disclosure is made, or have a relationship with that entity that is relevant to its tax affairs such as a registered tax or BAS agent who provides services to the entity.

    A person, including an eligible recipient, commits an offence if they disclose the identity of the tax whistleblower or information that is likely to lead to their identification. However, it is not an offence to disclose information that is likely to lead to the identification of the tax whistleblower

    • if the subsequent disclosure was itself not of the identity of the tax whistleblower
    • was reasonably necessary for the purposes of investigating the matters to which the original disclosure relates and all reasonable steps were taken to reduce the risk of the whistleblower’s identification
    • is made with the consent of the whistleblower, and
    • is made to the ATO.

    If a tax whistleblower makes a disclosure, they are protected from detrimental conduct in relation to the disclosure. It is illegal for anyone to cause detriment to the tax whistleblower in relation to a disclosure, or a suspected disclosure. For example, a tax whistleblower can't:

    • be dismissed, harassed or intimidated, harmed or injured (including psychologically) by your employer
    • have your property, business or your financial position damaged owing to your disclosure.

    Compensation may be awarded if a court finds that an individual has suffered detriment in relation to a disclosure. If an individual is victimised and suffered loss, damage or injury as a result of it, a court may order the person causing detriment to compensate them, if it thinks appropriate. For example:

    • paying damages
    • reinstating employment
    • an injunction to prevent or stop detrimental conduct
    • apologising.

    If you or your client know or suspect someone is doing the wrong thing, you can either

    • complete the tip-off form on our website or in the ATO app – contact us section
    • phone the Black Economy hotline on 1800 060 062
    • phone us on 13 72 86 (fast key code 3 4) for tax practitioners.

    For more information, refer to:

    Commonwealth Business Registry Service

    The ATO has strengthened its approach to businesses applying for an ABN to make it easy, but also to ensure only those who are entitled to an ABN get one.

    The ATO has ceased selecting individual cases to review on the basis of potential worker misclassification. The ATO will now look at risks of worker misclassification by taking a coordinated approach to any tax, superannuation and ABN issues found. Where the ATO identifies a business that has misclassified their workers the focus is to transition their workers to the appropriate arrangements.

    The ATO will continue to undertake cancellation of ABNs where all the evidence indicates the ABN holder is no longer carrying on an enterprise. There are different approaches for different groups of ABN holders based on a ‘spectrum of certainty’. ABN holders are contacted to better understand their circumstances. Tax practitioners will play an important role in ensuring their business clients meet their obligations of holding an ABN in line with government announced changes.

    The government has proposed new arrangements to strengthen the ABN system. There will be two changes which will impact ABN holders:

    1. From 1 July 2021, compliance with income tax return obligations will be a condition of maintaining an ABN. This will strengthen ABN holders’ engagement with the ABN and tax systems. The majority of ABN holders are already required to lodge an income tax return. For those doing the right thing, there will be no additional burden. The lodgment condition will not apply to ABN holders that do not have an obligation to lodge an income tax return (such as charities and other income tax-exempt entities).
    2. From 1 July 2022, ABN holders will be required to annually check pre-populated Australian Business Register (ABR) data to ensure accuracy and confirm that an ABN is still required. This will assist the Registrar to maintain the value of the ABR. The data check will be a simple way to support ABN holders to keep their details current. Consultation will be undertaken with stakeholders on the development of appropriate mechanisms for the data check to minimise red tape for ABN holders.

    For more information, refer to:

    Activity statement financial processing

    Currently the ATO maintains two main accounting systems, two debt case management systems and two different analytic solutions for the major revenue collection and refund workloads. The intent of the activity statement financial processing deployment is to bring the majority of client account information into one system. This deployment will occur during the usual Christmas period shutdown in 2019 to minimise the impacts of system availability on tax professionals.

    After the changes have been made and the systems resume in January 2020, tax practitioners will view all accounts (except for excise and heritage taxes) in one accounting system. This change will deliver a simplified view of aggregated online activity statement information and will significantly streamline inter-account and intra-account offset and refund processing. The transaction view improvements include expanded accounts list for director penalty accounts, pay as you go withholding and GST. There will be options to expand aggregated activity statement balance amounts and general interest charge amounts.

    There will be one debt case management and analytics system. This will lay the foundation for the ATO to increasingly use machine learning and ‘Decision Optimisation’ technology. This will mean that the ATO will be able to better tailor ATO actions to prevent tax debts and address debts should they arise. This will increase the ATO effectiveness in reducing the collectable debt and improve the experience for tax agents and their clients.

    The ATO has formed a working group with tax professionals. Progress on the consultation is published on the ATO website.

    More information

    Tax practitioners can obtain more information on these topics from the professional association representatives. Tax practitioners should contact their representative to contribute items for future discussions.

      Last modified: 22 Jul 2019QC 59726