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  • TPSG minutes 17 August 2018

    Agenda items

    1. Welcome and introductions

    The chairpersons noted apologies, introduced guests and welcomed the new representative for Tax and Super Australia.

    Action items

    Reference

    TPSG – 0112/01

    Agenda Topic

    ATO digital products

    Action item

    The ATO to raise awareness of the online services that are available for transactions that currently attract high volumes of phone calls. Consider whether the online services are sufficiently intuitive, easy to use and quick. Develop ‘how to’ products to share with tax professionals.

    Members are asked to tell the ATO about transactions that are an irritant so that the ATO can consider opportunities to improve online services.

    Responsibility

    Colin Walker

    Update

    We are currently considering how to inform and encourage agents to utilise the online services as well as how to use these particular services. This also requires consideration of how these services may change in the future ATO online environment.

    Status

    Ongoing

     

    Reference

    TPSG – 0112/03

    Agenda Topic

    ATO digital products

    Action item

    Consider the possibility of having a dedicated social media channel that could be used for tips and links tailored for tax and BAS agents.

    Responsibility

    Colin Walker

    Update

    ATOTaxProfExec is the official Twitter account for ATO’s tax professionals executive. Fronted by Assistant Commissioner Tim Roach, this channel continues to grow since the launch in June 2018, with 214 followers and 128 tweets.

    Status

    Closed

    Reference

    TPSG – 0806/01

    Agenda Topic

    ATO investment priorities

    Action item

    The ATO will prepare a list of Application Programming Interfaces that have been released to the community that will enable digital service providers to make choices about their future software development priorities.

    Responsibility

    John Dardo

    Status

    Open

    Reference

    TPSG – 0806/02

    Agenda Topic

    ATO Online services

    Action item

    The ATO will prepare a list of the accounts that will be visible in the new online services for agents.

    Responsibility

    Andrew Watson

    Update

    The information is provided in the agenda pack for the meeting 17 August 2018 at pages 8-9.

    Status

    Closed

    2. Australian Business Number reform

    The Black Economy Taskforce’s final report to the GovernmentExternal Link made a number of findings and recommendations in relation to the ABN system.

    In response, the Government agreed that the ABN system should be strengthened through a new regulatory framework and is seeking to consult further on the Taskforce’s recommendations.

    The consultation process has now commenced, with a public consultation paper Designing a modern Australian Business Number systemExternal Link released on 20 July 2018. Submissions will be accepted until 31 August 2018.

    The Treasury and the ATO encourage tax practitioners to participate in the consultation process for ABN reform and to consider the following questions:

    • What purpose does the ABN system serve?
    • Who should be entitled to an ABN?
    • Should there be conditions associated with an ABN?
    • Should the ABN system be used to support more active verification of legitimate businesses?
    • How should the ABN system support accurate information on businesses?
    • Should ABNs be subject to renewal?

    Members formed small working groups to contribute ideas as to how the profession can contribute to improving the ABN system. Members exchanged ideas with the ATO on the role of an ABN, how to strengthen the system, how the role of the ABN can contribute to reducing the Black Economy and how to make the system easier to do business in Australia. Diversity of experience and the opportunity to leverage ideas produced rich conversation and fostered a strong desire to continue to influence and shape the design of the future ABN system and provide a level playing field for the Australian community.

    3. Single Touch Payroll

    We have seen a very positive start to Single Touch Payroll reporting with a large number of employers with 20 or more employees already reporting each pay day, including a number of smaller employees that have opted to start reporting early. Over two million employees now have visibility of their income, tax and superannuation amounts in myGov as a result of the employer’s reporting pay event information. Tax agents are also able to see this information in the Portals for their clients who are employees.

    Many of the largest employers have requested additional time to get ready as they have the most complex payroll processes and systems. The ATO expects that the remaining large employers will start reporting over the next 9 months as their systems and processes get ready.

    Employers using cloud software must notify the ATO of their unique software identification in order to send Single Touch Payroll data to the ATO. Notifications were to be completed via Access Manager or by phoning the ATO only if they were the eligible associate or authorised staff of the business. The ATO contact centres experienced high volumes of calls in early July 2018 in relation to this authorisation, and have recently introduced changes that will streamline this process. Tax and BAS agents are able to send a list of their employer client’s software identification that the ATO is able to process in bulk as opposed to the agent processing single transactions.

    The ATO has been working with industry stakeholders to develop a solution that will alleviate the requirement to obtain a signed declaration from the employer at each pay event. Consultation with tax practitioners has helped the ATO to arrive at a position where a letter of engagement that provides a standing declaration from the employer to be able to report throughout the year will remove the requirement to obtain a signed declaration at each pay event. The ATO will be developing guidance and will shortly communicate this process to the wider community.

    Although the legislation to bring employers with less than 20 employees has not yet been passed, the ATO will continue to develop administrative and transition approaches with industry stakeholders in anticipation the law taking effect from 1 July 2019. For example, the ATO will assist those that are most able to start reporting, will use deferrals to manage the transition and to help tax practitioners assist their clients into some form of reporting. Exemptions will also be part of the administrative approach, for example where internet is unavailable. Relief to report quarterly through a tax or BAS agent over a two year period may be available for those that have very low digital capability.

    The ATO continues to work with Tax and BAS Agents to explore options for very micro employers (4 or less employees). The ATO has conducted a series of design workshops with tax agents, accountants, bookkeepers and small business owners to better understand the needs of small employers and confirm requirements and approaches to low cost payroll reporting solutions that fit with the natural business process and do not add unnecessary costs of compliance. This includes how to approach payroll reporting for closely held entities that don’t pay regular wages. The ATO will continue to work with the software industry, banks and others who will provide these solutions to employers.

    The ATO continues to focus on a help and education approach to assist employers in the transition to single touch payroll reporting and will continue to develop an understanding of the corrections framework and how employers operate within that framework.

    4. ATO investment priorities

    The ATO understands that the community has expectations for highly available and reliable systems and services, with reduced planned maintenance windows to meet those needs. Throughout 2017-2018, ATO systems have been highly available to the community measuring at around the 97 – 99 percent range.

    The ATO has developed benchmark availability targets that will improve the availability, resilience and performance of key client-facing systems and services that the community relies on. These service availability targets have been developed, and were endorsed in principle in June 2018.

    The service availability targets consist of:

    • High availability – Services will be available 99.95 percent of the time, 24 hours a day, and seven days a week with two 48 hour maintenance windows planned per annum.
    • Extended availability - Services will be available 99.5 percent of the time from 7.00am to 11.00pm Monday to Saturday each week.
    • Standard availability – Services will be available 99 percent of the time from 7.00am to 5.00pm Monday to Friday each week.

    Full achievement of the service availability targets is unlikely to be attained until the completion of the multi-year Improving ATO IT systems program, however incremental improvements toward achieving the service availability targets is expected over this period. By December 2018 the ATO intends to commence measuring and reporting against the service availability targets publicly.

    The measure will include the following systems:

    • Standard Business Reporting (SBR 1 and SBR 2)
    • ATO.gov.au
    • ATO Online
    • Portals
    • Australian Business Register.

    Members discussed recent improvements that have been made to system availability and the reduction in critical incidents that have disrupted services unexpectedly. The ATO discussed the Extended Availability service targets. Any need for systems to be taken offline for maintenance will only occur in the agreed window. Once they have been uplifted through the program this will be Monday to Saturday from 11.00pm to 7.00am and Sunday. The ATO stressed that this does not mean that systems will be always unavailable during these times. It means that if maintenance is required, it will only occur during these times and that for the majority of the time systems will still be available in these windows. Any planned maintenance is communicated to tax practitioners and published on the ATO website.

    5. Progress of return

    In Tax Time 2017, the ATO trialled the benefits of messaging individual self preparers to notify them their refund had been processed successfully.

    The ATO is seeking feedback and input to shape the intended trial of two new approaches with tax agents and their clients informed about the progress of their individual tax return. Some consultation has occurred with tax agents in relation to the usefulness of these types of messages that would identify clients that have delays in processing and the reasons for those delays.

    The first trial will proactively email tax agents to inform them where there is a delay in processing a client’s income tax return and provide the reason for the delay. The messages are aimed to reduce the need for a progress enquiry into the ATO contact centres either from the client or the tax agent.

    Currently the ATO issues a report to tax agents where a client’s income tax return is delayed by more than 30 days. It is the ATO’s intention to improve the timeliness of the delayed refund email report by issuing the report on a weekly basis that identifies returns that are delayed by more than 10 days.

    The second trial looks to issue an income tax return finalisation message to clients of a tax agent advising that the income tax return has been finalised and when they can expect to receive the refund into the account nominated on their return. The trial will include three groups of clients that:

    • have their refund paid into their own bank account
    • have their refund paid into their tax agents trust account
    • clients of tax agents that adopt the ‘instant refund’ business model.

    The ATO confirmed that to receive these communications the ATO income tax account must have a mobile number listed. Members discussed the slightly different business models that are used in practices and discussed the potential preferences, impacts and usefulness of the proposed email to agents and the message their client may receive. The ATO also acknowledged that the messages need to be designed to protect a client from being mistaken for scam activity.

    6. ATO Online services

    The ATO firstly noted that over 3 million income tax returns have been lodged via the Practitioner Lodgment Service to date throughout Tax Time 2018. As at the end of the first week of August 2018, 78 percent of 2018 individual income tax return refunds lodged by tax agents issued within 5 business days, compared to 75 percent at the same time in 2017 and 54 percent in 2016.

    Participants in the private beta group has increased to approximately 600 tax and BAS agents that are now testing the new Online service for agents in a full production environment. All functionality that is currently available in the Tax and BAS Agent Portals has now been incorporated and the focus has shifted to improving the performance, stability and usability of the system in preparation for public beta later in 2018.

    The next system update scheduled for end of September 2018 will introduce usability enhancements. These enhancements are being made based on user feedback and are considered to be of the highest priority. The enhancements will deliver:

    • separate columns for credit and debit entries in the accounts/transactions screens
    • predictive name search across the system including prefill reports and remove client functions
    • print friendly screens to be available when accessing clients’ accounts/transactions
    • improvements to the remove client process to simplify the removal of agent details from the client record
    • activity statements displayed chronologically by period end date with the newest end date at the top of the list.

    The system release in September 2018 will also have other minor changes in preparation for public beta, including a new Portal and Online services for agents login page. The new page will provide users with the option to log on to the existing Tax and BAS Agent Portals or the new Online services for agents. One key feature that will appear on the log on screen is a link to a tool that will test a user’s system settings to help the user to understand the system requirements for optimum performance of the Online services.

    The private beta participants have also provided feedback on the user guides and support material including:

    • recorded system demonstrations
    • short ‘feature focussed’ videos to highlight new or improved features
    • a product user guide
    • feature tips.

    The ATO anticipates the new online services for agents will be made available for public beta testing in late 2018 provided that the following criteria have been met:

    • all of the current functionality in the Tax and BAS Agent Portals has been deployed to Online services for agents
    • priority feedback items listed above have been delivered
    • system performance is stable and reliable.

    The ATO is also investing in staff training to be able to support tax and BAS agents as they transition to use the new services. The current Tax and BAS Agent Portals will continue to remain fully operational.

    Into the future, the ATO will prioritise development of Application Programming Interfaces over releasing new services or functionality within Online services for agents. The Application Programming Interfaces will enable software developers to build additional functionality into their practice management software. The timing and whether Digital Service Providers choose to build ATO services into their software products is their choice.

    7. Work related expenses

    Strategies to identify over-claiming of work-related expenses are becoming more sophisticated and effective.

    Average work-related expense claims appear to be showing signs of tapering off, indicating that efforts to identify outliers and rectify invalid claims are beginning to have an impact. However, the level of over-claiming remains significant.

    The ATO is working with a subgroup of the Tax Practitioner Stewardship Group, to investigate further administrative improvements to increase correct reporting of work-related expenses and reduce the tax gap.

    Members discussed what further changes could be made to support this outcome through three lenses:

    • what more can the ATO and Tax Practitioners Board do?
    • what more can the tax profession do?
    • what more can tax practitioners do?

    Ideas were raised around the following themes:

    • Continue to work together and looking for new opportunities to strengthen ties across ATO, Tax Practitioners Board, professional associations, tax practitioners and demonstrate a united effort.
    • Look at improving access and quality of education and training for agents via Continuing Professional Development and products that are co-created.
    • Make the most of data and technology with real-time analytics for agents and increase information sharing between professional associations, the Tax Practitioners Board and the ATO.
    • Undertake a sustained campaign to influence community attitudes about entitlements to refunds and misconceptions about work-related expenses claims.
    • Increase the visibility of ATO and action taken by the Tax Practitioners Board to bring higher-risk agents to account.

    The ATO will undertake more work, in combination with the working group to develop these ideas and present the outcomes and progress at a future meeting.

    8. Other business, forward agenda items and meeting close

    The agenda listed the following items for future consideration:

    • Electronic service offerings
    • Taxable payments reporting system
    • ATO correspondence project
    • Black economy measures for small business
    • 2024 vision and goals for individuals and small business

    Topics for the agenda can be sent to the secretariat via the TPSG mailbox at any time.

      Last modified: 08 Nov 2018QC 57314