Environmental scan
The external co-chair facilitated a group discussion on insights, trends, developments and direction that the Australian Taxation Office (ATO) should be aware of as context for the operation of the system overall.
At an environmental level members reported an increasingly challenging operating environment. Regulatory, governance and tax administration changes are contributing to higher stress and dissatisfaction levels and increasing concerns about the profession’s capacity to absorb further change.
At an operational level discussion topics included:
- practice mail
- visibility of income tax accounts for BAS agents.
The ATO agreed to consider providing visibility of the income tax account information for BAS agent clients. We recognise that it might be timely to consider this as we work to provide visibility of super guarantee charge (SGC) balances.
Supporting small business at Tax Time 2026
An overview of what is new in the ATO’s 2026 Tax Time toolkit for small business (the toolkit) was provided and sought member feedback on the guidance contained in the toolkit.
The toolkit provides practical, up-to-date guidance to help small businesses and their advisers meet their tax and super obligations with confidence. It focuses on getting the basics right, including accurate record-keeping, correct income reporting, and appropriate expense claims.
The toolkit highlights key changes for 2026, including:
- the introduction of Payday Super
- expanded pre-fill for sole traders, including taxable payments annual report data
- updates to deduction rules such as the denial of deductions for ATO interest charges.
It also reinforces the importance of early engagement with the ATO where businesses need support.
Member comments
Members welcomed the ATO’s masterclasses and suggested that links to previous sessions be included in the registration process. Feedback on the toolkit was provided, noting that it should be concise, industry-focused, and include information on the services that BAS agents and tax agents can provide to small businesses.
Dynamic pay as you go instalments
The ATO discussed with members a range of action being undertaken in relation to dynamic pay as you go (PAYG) instalments and sought member feedback on these actions.
As part of the 2026-27 Federal Budget, the government announced that commencing 1 July 2027, the ATO will expand access to the dynamic PAYG instalments pilot to more small and medium businesses.
Dynamic PAYG instalments uses a calculation embedded in software to determine an amount which more closely reflects the actual performance of the business. When businesses overpay instalments, this prepayment of tax takes away the ability to use those funds in their business. Underpayment of instalments can result in large tax bills when businesses lodge their returns, which often leads to the accumulation of debt. While businesses can vary their instalments to better reflect current performance, they risk interest charges if they significantly underestimate their instalments.
The ATO will be issuing a draft Practical Compliance Guideline (PCG) which is intended to increase uptake and provide confidence to taxpayers utilising the dynamic PAYG instalment calculation method, that the Commissioner of Taxation will not apply compliance resources to impose and collect general interest charge under Subdivision 45-G in relation to PAYG instalment variations.
Member comments
There was general support for the intent of the pilot although some reservations were expressed regarding accuracy/completeness of the calculations. The ATO noted the expanded pilot involving businesses with different structures may require the consideration of different methodologies and calculations.
Members conveyed concerns that BAS agents have not been included in upcoming pilot information sessions, noting the regular interactions BAS agents have with their small business clients and the assistance BAS agents could provide in regard to the pilot. The ATO is interested in gaining a deeper understanding of the involvement of BAS agents in the PAYG instalments system and will organise an out of session discussion with members to discuss this further.
ATO
Updates on a range of key ATO, BAS Agent Advisory Group and BAS agent related matters, were provided including:
- employer obligations and superannuation
- frontline operations related matters
- new/re-engaged client deferral options for BAS agents.
Member comments
Members reaffirmed previous discussions and the profession’s request regarding new and engaged clients. Members have asked the ATO to consider options for pausing lodgment action when BAS agents take on new or re-engaged clients with outstanding lodgments. This would provide BAS agents with the necessary time to work through any outstanding lodgments and get them up to date. The ATO is investigating what may be possible in terms of a practical and sustainable solution.
Payday Super
The ATO shared with members the ATO’s engagement and preparedness for Payday Super, including updates on:
- communication and engagement
- practical compliance guidelines and the First Year Compliance Approach
- voluntary disclosure statements
- legislative updates (including Law Companion Ruling).
The ATO provided an update on the implementation of Payday Super from 1 July 2026, emphasising that employers are expected to make a genuine effort to comply and to identify and correct reporting errors as soon as practicable.
Members were reminded that the Small Business Superannuation Clearing House will close at 11:59 pm AEST on 30 June 2026 and encouraged practitioners to download relevant records before this date and make appropriate arrangements to move to an alternative payment channel.
The current PCG will apply from 1 July 2026 and will be reviewed as implementation of Payday Super progresses and future compliance approaches are determined.
Member comments
There was confusion regarding the voluntary disclosure process and members highlighted the importance of clear communications outlining ATO requirements and expectations.
Members also raised the importance of BAS agents having visibility of SGC data. The ATO noted this is on the IT delivery roadmap with consultation expected to commence in August/September this year.
BAS agent menu options in practice mail
An update on how we are progressively managing feedback on practice mail and its alignment with broader initiatives under the Tax Practitioner Improvements Consultation Working Group (TPIC) was provided.
We will continue to consider input from tax practitioners highlighting ongoing challenges associated with the use of Online services for agents practice mail. We will continue to actively engage with stakeholders (including the BAS Agent Advisory Group and BAS agents) as we establish a prioritisation framework for those irritants which can be progressed over time.
Member comments
Members commended the ATO on the establishment of the TPIC working group, noting the positive and constructive discussions being held. Members asked for regular updates on the items being discussed at TPIC that are relevant to BAS agents.
Tabled papers
The group noted the following tabled papers:
- consultation and working group updates
- Tax Time updates
- Tax Practitioners Board updates.