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  • 18 August 2017

    The Tax Practitioner Stewardship Group meeting was held on Friday 18 August 2017.

    The information provided below is to assist professional associations to communicate key messages to members.

    Scams and fraud

    Scams, identity crime and cyber security breaches cost the Australian community more than $2.2 billion each year. Scammers are criminals and are dealt with by law enforcement bodies such as the Australian Federal Police (AFP). The ATO continually works with agencies such as the AFP as well as the private sector to actively combat cybercrime and scam activities.

    ATO regularly warns the community about current scams and how to recognise a potential scam. The ATO uses analytical models to assess all refund claims and ensure safeguards are in place to detect fraud. Where fraudulent activities are detected the ATO will identify how many clients are affected, what level of protection is required, apply protections and monitor client accounts.

    Protections can vary depending on the nature of the breach. All include alternative processes to access or update client records. Where a breach is not fully confirmed, protections can be applied and the client may not be notified. Some protections will disable prefill of client income tax returns through the Electronic Lodgment Service (ELS) gateway.

    Accounts of impacted clients are monitored for specific activity. Forms lodged to the ATO are accessed by trained identity security officers prior to any action being taken. Delays in return processing may occur whilst account protections are active.

    Tax professionals are reminded to review security to stop fraud and protect client information.

    If your clients think that their personal information has been stolen or misused, they should contact the Client Identity Support Centre by:

    • phone on 1800 467 033 (8.00am–6.00pm, Monday–Friday)
    • email.

    If you or your clients are the victim of a scam or believe you have seen a scam, phone us on 1800 008 540 (8.00am–6.00pm, Monday–Friday).

    Modernising Business Registers

    New technology offers opportunities to improve the user experience of business registry services, simplify systems for business and achieve the government’s open data policy objectives.

    The government has opened consultation on ways to modernise business registers as part of the National Business Simplification Initiative.  A media releaseExternal Link jointly issued by The Hon Kelly O’Dwyer MP, Minister for Revenue and Financial Services and The Hon Craig Laundy MP Assistant Minister for Industry, Innovation and Science provides further information.

    A discussion paperExternal Link is now available on the Treasury website with background information and frequently asked questions.  Tax professionals are invited to consider ways to improve business registry services and are encouraged to make a submission hereExternal Link by 6 September 2017. The government is asking:

    • What do you see as the main strengths or weaknesses with existing registry services?
    • What would you like modernised business registry services to deliver for you in the future?
    • What would be the advantages of bringing together the ASIC registers and the ABR within a single agency?
    • Do you have concerns about a single agency being responsible for consolidated registry services?
    • What advantages or disadvantages would there be in a consolidated set of business data, for example in accessing data, updating business information, data confidentiality?
    • Is there any information currently collected by the Commonwealth that is, in your view, redundant?
    • Information confidentiality and security is paramount. Do you have a view on how security should be maintained, and/or how users can be empowered to manage permissions relating to their data held in registers?
    • What are the implications for business of changes to the way registers are currently delivered? For example, the cost of updating systems, products, or changes to any customer services?
    • How would you like to be involved in any future changes?
    • How long would parallel services (new and old) be required for you to transition your software and customers?

    Superannuation

    The 2017 Budget Housing superannuation measures may be tabled in parliament during the September 2017 sitting.

    With respect to the 2016 budget measures there are sixteen Guidance Notes and the new Guidance Notes released in June/July are:

    Frequently asked questions and answers have been updated to include a key topic of transitional capital gains tax relief. Tax practitioners can subscribe for email or RSS alerts when the frequently asked questions are updated.

    Superannuation Guarantee Health Check

    Paying super is an important part of being an employer. This superannuation guarantee (SG) client health check has been developed to help tax professionals quickly check that their clients are meeting their superannuation obligations, and if not, where to go to help them get back on track.

    A printable superannuation guarantee client health check form is available on the Let's Talk super community. The ATO is currently seeking comments and suggestions on the design and usability of this form.

    Self-managed superannuation fund (SMSF) events based reporting

    From 1 July 2017, there is a new limit on the total amount an individual can transfer into retirement income stream accounts, such as pensions and annuities. This is known as the ‘transfer balance cap’.

    Further information about the ‘transfer balance cap’ is available on the ATO website Super changes for SMSFs

    From the 1 July 2018 SMSF trustees will be required to report events impacting an individual member’s transfer balance on an events basis.

    The ATO has published a position paper to explain how events based reporting by SMSFs for transfer balance cap and is seeking feedback from tax professionalsExternal Link.

    Single Touch Payroll

    Business rules and scenarios are being finalised to assist digital service providers in interpreting what is required to enable an employer to meet their Single Touch Payroll obligation.

    The draft employer guide is also under development. This guide is a version of the business rules and software developer’s guide designed for the employer audience and will be published as web content.

    Engagement activities are continuing with substantial employer groups. A bulk correspondence email or letter is proposed to issue in late September 2017. The correspondence will be tailored depending on employer size to ensure audiences are getting the right messaging at the right time. For example, the letter will contain messaging focused on the business rules and deferrals framework for large employers (where it is possible their solution will not be ready). Smaller employers will receive messaging around how to do their employee headcount.

    An employer fact sheet has been developed to assist in further understanding of Single Touch Payroll, what employers need to do and when. A copy of this document can be requested by emailing SingleTouchPayroll@ato.gov.au

    Work related expenses

    The ATO continues to work with tax practitioners and members of the Tax Practitioner Stewardship Group to develop programs that will increase the visibility of work related expense deductions claimed by clients of tax agents.

    The ATO shared the results of their pilot programs aimed at assisting agents with higher and lower risk WRE claims to improve their return preparation practices and capability. The sharing of the WRE risk profile of the practice (including a list their higher risk claimants) and discussing ATO concerns in an open and transparent way received positive feedback with over 60% of agents responding positively. The program will be expanded to 1,000 agents for this tax time.

    This year tax agents can view taxpayer’s 2016 work-related expense claim as part of the pre-fill report (where claims are assessed as high in comparison with peers). Discussion centred on the usefulness of being able to share this information from the ATO at the return preparation stage.

    The ATO provided a number of options it was exploring to improve the transparency of information it holds to assist in the correct claiming of work related expenses. This included expanding the existing risk messaging to all software platforms and channels and looking at the feasibility of providing real time analytical prompts at the point of pre lodgement. These options will be explored by the newly formed WRE working party which will focus on co designing administrative strategies ranging from help and guidance through to targeting those agents and their clients who engage in deliberate over claiming and enjoy an unfair advantage.

    Pay as you go instalments

    There are approximately two million clients who pay by pay as you go (PAYG) instalments. Approximately 20% of the population vary their instalment rate or amount. In around 50% of these cases, on assessment, additional tax is required to be paid. A general interest charge (GIC) may be applied where a downward variation is excessive (varied below 85% of the benchmark amount or rate).

    Analysis shows that up to half of instalment rate payers are reporting less instalment income during the year when compared to the total business and investment income included on the annual income tax return. Accordingly, we are also interested in understanding why there is understatement of instalment income. GIC is not applicable in these circumstances, however the amount of instalment income is relevant to the tax liability and an administrative penalty may be considered for making false or misleading statements in these circumstances.

    The ATO will build on current communications to inform the wider instalment population of their responsibilities when it comes to varying and reporting the correct amount of income. The ATO will be promoting the services and tools available including the variation calculators which have been designed to assist individuals, company and superannuation fund clients that wish to vary their instalment rate or amount.

    ATO communications will be tailored to the risk population and aim to inform at the right time. Message channels include small business news room, tax agent newsletters, social media and messaging on ato.gov.au

    Consistent with ATO review and audit practice, clients being considered for penalty imposition will be contacted. The progress of the review will be discussed with the client (or tax professional), and may include a face to face interaction to gain an understanding of the clients circumstances and the methodology relied upon to determine their rate, amount or instalment income. 

    The cases which are more likely to be recommended for penalty imposition will include clients who have varied excessively over a number of years or have repeatedly understated their instalment amount resulting in significant shortfalls.

    Tips and links

    Scam emails, SMS or phone calls can be very convincing but there are some things you and your clients can look out for to recognise or report a scam.

    The Be aware of what you share videoExternal Link and digital posters are regularly shown in myGov shop fronts around Australia.  

    The tax profession is going through significant change. Open forums provide a platform for discussion on how the environment and systems are changing, and to encourage and support practitioners to get ready for these changes.

    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: 14 Sep 2018QC 27350