• 2. ATO collaboration and consultation

    Meeting discussion

    2.1 85% on-time lodgment benchmark and practitioners’ perceptions

    An overview was provided on the engagements and interactions with the practitioner community on the 85% on-time performance standard. Whilst the feedback captured through these interactions showed a general acceptance of the benchmark, there have been some concerns raised around the operation of the Lodgment Program. There is an opportunity for the ATO and the Lodgment Working Group to refine the design of the program to address these concerns, which include:

    • the need to cater for the impact of managing clients with prior year returns overdue
    • clarifying what and when treatments will be applied to under-performing agents
    • enhancing communications around the performance benchmark; this is especially relevant to the content and tone of the on-time performance letters.

    Attendees suggested the ATO develop a communique, which includes robust figures, outcomes and the work we are undertaking to resolve concerns raised by practitioners around the Lodgment Program. A key element of the communications is to reassure practitioners that the performance benchmark is not a pass/fail concept; it is about encouraging continual improvement across the profession.

    The communique will be drafted and sent to the professional associations for their input.

    The ATO is preparing to undertake a formal survey to gauge practitioners’ perception and understanding of the Lodgment Program, findings of the survey will then be used to inform our future strategies and in particular how we consult and communicate around the Lodgment Program.

    2.2 Clients with multiple years outstanding

    A frequently raised issue from practitioners is their concern that taking on new clients (or re engaged) with multiple prior year income tax returns outstanding and how this may negatively impact their on-time performance.

    The Chair noted that the ATO does not want the perception in the practitioner community that they should be turning away clients, because they are concerned about how this will impact their on-time performance. If the practitioner has the capacity to take on new clients (or re engaged clients) and bring them back into the tax system, the ATO will work with them.

    Feedback received from practitioners is that they need time to lodge all the prior years’ returns to then be in a position to lodge the current year return.

    The meeting resolved:

    • catering for the impact of past year returns through the use of lodgment deferrals for the current year’s return, where an agent has the capacity to service the new or returning client.
    • highlighting the availability of ATO support through targeted communication and development of a handbook for tax agents. This includes updating the deferrals content on the ATO website.
    • re-iterating through communications that only current year income tax returns are included in the on-time performance measure.

    2.3 Fringe benefits tax lodgment due date proposal

    The Tax Institute tabled a proposal to further extend the lodgment due date for annual Fringe benefits tax returns from 25 June to 7 July. The rationale behind the proposal includes:

    • the 85% lodgement benchmark, together with the condensed period of time in which agents have to lodge and prepare annual returns, is stressful for employers and agents; particularly where clients provide their information in late June to their practitioners.
    • employers are not required to issue their employees with PAYG Withholding summaries until 14 July and therefore can usually calculate the amount of reportable Fringe benefits for the year at the same time as preparing information for the return. Therefore allowing an additional period beyond 25 June for employers and their agents to prepare and lodge their Fringe benefits return will reduce the compliance pressures at year end, whilst allowing for timely provision of PAYG Withholding summaries.
    • A large number of Fringe benefits tax returns are lodged in the period post 25 June and 7 July, supporting the proposal that 7 July is a more realistic date for agents and their clients.

    The ATO will undertake an assessment of the current arrangement (25 June) and the proposed arrangement (7 July), to formulate a decision on providing a further extension of the lodgment date.

    This proposal will be carried over for discussion at the next meeting.

    Reference

    LWG 0810/01

    Agenda Topic

    Fringe benefits tax annual return lodgment due date proposal

    Action item

    The ATO to undertake assessment of the proposal to extend the due date for lodgment of the annual fringe benefit tax return from 25 June to 7 July.

    Responsibility

    Colin Walker

     

    Reference

    LWG 0810/02

    Agenda Topic

    85% on-time lodgment benchmark

    Action item

    Develop a communique about the Lodgment Program, the current on-time lodgment landscape, the outcomes of the first year of operation and the work the Lodgment Working Group and the ATO are undertaking to resolve practitioners concerns. Professional Association members to provide input to the communique.

    Responsibility

    Vlad Dugandzic

     

    Reference

    LWG 0810/03

    Agenda Topic

    85% on-time lodgment benchmark

    Action item

    Details on the Lodgment Program survey to be tabled at the next meeting.

    Responsibility

    Vlad Dugandzic

      Last modified: 06 Jan 2015QC 43602