BAS Agent Association Group Minutes, December 2013

Meeting details

Venue	Video conference at sites in Adelaide, Albury, Brisbane, Melbourne, National Office and Sydney Audiolink to other sites
Date	4 December 2013
Start	9.30am	Finish	1.00pm
Chair	Cameron Sorensen
Secretariat	Tricia Walsh	Contact Phone	07 314 95768

Attendees

Cameron Sorensen Assistant Commissioner	ATO
Matthew Addison Executive Director	Institute of Certified Bookkeepers
Debra Anderson Principal, Legally BAS	BAS Agent
Tony Austin Membership Association Representative	First Class Financial Group
Maria Benardis Professional Association Representative	Association of Taxation and Management Accountants and Association of Certified Bookkeepers
John Birse Franchisor	Jim’s Bookkeeping
Kelli Day Accounts by Day	BAS Agent
Rowena Hand Principal - Books and BAS	BAS Agent
Martine Joly Professional Association Representative	Institute of Chartered Accountants in Australia
Stuart Norman Chief Executive Officer	Association of Accounting Technicians
Russell Smith Carruss Consultants	BAS Agent and Tax Practitioners Board member
Peter Thorp Member Agent	Australian Bookkeepers Network

Guest Presenters

Lekie Johnston ATO - Assistant Director, TPALS	Agenda Item 2
John Becker ATO - Assistant Commissioner, ATO Corporate	Agenda Item 3
Will Day ATO - Assistant Commissioner, Serious Non-compliance	Agenda Item 3
Jennifer Moltisanti ATO - Assistant Commissioner, Indirect Tax	Agenda Item 4
Janine Bristow ATO - Senior Director, Indirect Tax	Agenda Item 4
Graham King ATO - Senior Director, Business Reporting and Registration	Agenda Item 5
Colleen Colquhoun ATO - Director, Superannuation	Agenda Item 6
Cristina O'Brien ATO - Assistant Director Superannuation	Agenda Item 6

Apologies

Joyce Correnza Director	ATO
Stephanie Caredes Tax Counsel, Professional Association Representative	Tax Institute
Kerri Giles BAS Agent	Kwik Biz Solutions
Robert Hutt Professional Association Representative	Institute of Public Accountants

Secretariat

Tricia Walsh

ATO

Disclaimer

BAS Agents Association Group (BASAAG) agendas, minutes and related papers are not binding on the Tax Office or any of the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.

2013 Forward program

Potential agenda items or focus areas for discussion at future BAS Agent Association Group (BASAAG) meetings are listed below.

To raise an issue for consideration for the 2013 Forward Program, please forward details via email to the following mailbox: basaag@ato.gov.au

¦ Electronic Service Delivery

Agenda Items

Agenda items are provided by the Professional Bodies and the ATO, including the many joint ATO/practitioner/taxpayer liaison forums operating across Australia.

1. Introduction, apologies and confirmation of minutes

¦ The meeting commenced at 09.30am.

¦ Chair’s opening comments -

Co-chair Cameron Sorensen welcomed participants to this meeting which was held by videoconference over six ATO sites

Adelaide - 25 Franklin Street

Albury - 520 Smollett Street

Brisbane - 55 Elizabeth Street

Melbourne – 747 Collins Street

National Office - Gnabra Kembery, 21 Genge Street

Sydney – 52 Goulburn Street

and audiolink.

¦ Guest presenters    

– Assistant Director Lekie Johnston, TPALS (Agenda Item 2)

– Assistant Commissioner John Becker, ATO Corporate (Agenda Item 3)

– Assistant Commissioner Will Day, Serous Non-compliance (Agenda Item 3)

– Assistant Commissioner Jennifer Moltisanti, ITX (Agenda Item 4)

– Senior Director Janine Bristow, ITX (Agenda Item 4)

– Senior Director Graham King, Business Reporting and Registration (Agenda Item 5)

– Director Colleen Colquhoun, Superannuation (Agenda Item 6)

– Assistant Director Cristina O'Brien, Superannuation (Agenda Item 6)

¦ Apologies    

– Assistant Director Joyce Correnza, TPALS

– Kerri Giles, Principal Kwik-Biz Solutions

– Robert Hutt, Professional Association Representative, Institute of Public Accountants

– Stephanie Caredes, Tax Counsel, Tax Institute

¦ Confirmation of the draft minutes for the 18 June 2013 meeting.

Draft minutes forwarded to members for comment on 23 July 2013. No comment was received.

Minutes have been published to ato.gov.au

¦ Record of action items listed for review

There were no outstanding items listed for review.

2. Lodgment Program

Professional Association Submission

Subject:
Lodgment program BAS Agents – 2014

Question:
What are the current plans by the ATO for the lodgment program for BAS Agents moving forward?

Specifically: what if an Agent takes on a client with outstanding lodgments – what effect does that have on the ATO view of that agent and their lodgment program for their other clients?

Background:
Current year has seen publication and changes to TA lodgment requirements and consequences of non-performance.

Appropriate concessions and communication occurred to BAS Agents but with promises of changes going forward.

What is the plan going forward? How do we get involved in plans and consultations?

Industry view/suggested treatment:
Consultation

Impact on clients:
Fear factor of agents

Also a response that agents won’t add clients to their list in fear of a consequence, which would appear to be the wrong answer.

Priority of issue:
Medium. This affects day to day life of BAS Agents and their work with clients.

Has this been discussed at any other consultative forum?
Yes but no recent updates or discussion around what has and hasn’t happened.

Meeting Discussion

The new lodgment program framework which currently applies only to Tax Agents was developed in consultation with the Lodgment Working Group. The program requires agents to lodge 85% of their clients’ income tax and FBT returns on time. Tax Agents will need to lodge returns electronically in order to receive lodgment program concessional due dates.

The new framework will be rolled out in two stages, with stage one involving tax agents and stage two will include BAS agents and activity statement obligations. The initiative has had a positive impact in improving on time lodgment across the tax profession.

The second stage will include registered BAS agents and activity statement obligations. The second stage was initially scheduled to begin on 1 July 2014, but the ATO is reflecting on knowledge gained from the rollout of the first stage, and consolidating the changes for tax agents prior to introducing changes for BAS agents and activity statements. At this stage the second stage has been deferred till 1 July 2015 at the earliest.

A considerable amount of consultation with BAS agents and professional associations will occur prior to the delivery of the second stage of the framework. The ATO website, which mentions the delivery of the second stage, to include BAS agents, by 1 July 2014 is currently being updated to accurately represent this change in delivery timeframe.

We only look at lodgment of the current year's tax return to calculate on-time lodgment performance percentage, therefore prior year lodgments will not affect the performance measurement. The 85% on-time performance benchmark provides a 15% leeway, so that if at the end of a measurement year the agents have taken on a number of clients with many years outstanding, the ATO will examine how it impacts their ability to lodge their client’s current year obligations and its effect on their on-time performance.

Work has commenced on a Best Practice Guide for Tax Practitioners. The intent of this guide is to join a range of other tools and publications that support agents in improving their lodgment performance, and supporting better practice management and relationships with the ATO. Consultation will be undertaken with Tax and BAS Agents in the development of this Guide.

Reference: BASAAG 0412/01

Agenda item #: 2

Agenda Topic: Lodgment Program

Action item: BAS Agents to be more involved in consultation leading to the further implementation of the 85% lodgment program framework

Responsibility: Assistant Commissioner Paul Kruspe

3. Electronic Service Delivery

ATO submission

Subject:
Electronic Service Delivery

Issue
The purpose of this agenda item is to outline the ATO’s approach to establishing clearer guidance to the community, including tax practitioners on the use of ATO online systems

Background:

View/suggested treatment:
For members information

Technical references:
Nil

Impact on clients:

Priority of issue:
High

Has this issue been discussed at any other ato consultative forum?
ATO online systems have been discussed at the following forums:

¦ ATO Tax Practitioner Advisory Group (ATPAG)

¦ BAS Agent Association Group (BASAAG)

¦ Lodgment Working Group (LWG)

¦ National Tax Liaison Group (NTLG)

¦ Accounting Working Group (AWG)

¦ ELS Forum

Presentation information:
Assistant Commissioners Cameron Sorensen, John Becker and Will Day will provide a presentation on the day of the meeting.

Meeting Discussion

Identity theft and online fraud is increasing and it is important for tax practitioners to remain vigilant to identity crime which can lead to concerns not only in the tax system, but for the broader financial community as well.

Together with the ATO, tax practitioners, who are in a trusted position of responsibility to take care of the security of ATO online systems, have a mutual obligation to develop and adopt practices designed to mitigate risks associated with having access to ATO information and online services.

Given the mutual obligation between ATO and tax practitioners to ensure that confidence, certainty and security in ATO systems is maintained, terms and conditions applying to the access and use of ATO online services are to be revised and developed in consultation with tax practitioners and their associations. The Department of Communications has a website dedicated to online safety containing a range of information about protecting yourself from cyber attacks and protecting your information. The ATO is to shortly roll out a program “Support and Assistance Business” with a focus on online security. This messaging is to be built into the induction kit for new agents.

An “Expectations Statement” has been prepared and was tabled at the meeting. Members were asked to provide any comment back through the secretariat.

Taxpayer information must be kept safe at all times. Attention to proper security procedures, especially during busy periods, will help mitigate the risk of identity crime and potential fraud.

The following tips will help protect your clients' information:

¦ Undertake proof of identity checks for new clients

¦ Perform regular reviews of your AUSkey credentials

¦ avoid sharing passwords and login details

¦ change passwords and remove user access when a staff member leaves

¦ lock computer screens when leaving desks

¦ secure tax records when they aren't in use

¦ avoid circulating tax file numbers in emails unless it's absolutely necessary

¦ ensure your computers have up-to-date security software, including anti-virus, anti-spyware, anti-spam and firewall protection.

The ATO has a range of practical suggestions to help reduce the potential for you or your staff being unknowing accomplices to identity crime and refund fraud. For more information, refer to Reduce the risk of refund fraud in your practice and Proof of Identity Checks . For further information on what is identity crime and how you or your clients can protect themselves, refer to Identity theft and your TFN at ato.gov.au

The Tax Practitioners Board has released a draft explanatory paper 0531 TPB(I) D17/2013 Code of Professional Conduct - Reasonable care to ascertain client affairs which deals with practical ways in which to handle issues and risks that may arise with your practice.

The Serious Non-Compliance area within the ATO takes the lead in protecting the community against tax crime by dealing with people who deliberately and dishonestly abuse the tax and superannuation systems to obtain a financial benefit. The ATO uses various strategies that aim to make the Australian tax and superannuation systems unattractive targets for serious and organised tax crime, including:

¦ taking action on tax cheats

¦ working with our partners – Australian Government and law enforcement agencies, industry and internal tax jurisdictions

¦ education and assistance

¦ strengthening our systems

¦ promoting reform.

We need to work together to protect the community against tax crime and ask you to:

¦ stay alert to misconduct in others

¦ exercise due diligence and let us know when you suspect serious misconduct

¦ work with us when we have to investigate allegations of misconduct by your fellow tax agents, or clients.

Forward Agenda:

This topic is to remain on the Forward Agenda.

4. Small Business Assist

ATO Submission

Subject:
Small Business Assist - phase 2 deployment

Issue:
Information

Background:
Small business assist is a contemporary online service that was developed to provide an easy pathway for small business to access information. It is a self-help tool to effectively support small business in complying with their tax and superannuation obligations through its ease of access to tailored information and channel support escalations. It also provides an alternative to the face-to-face Business Assistance Visit.

Phase one was launched at the COSBOA Small Business Summit on 25 July 2013.

Phase two, small business assist delivers three enhancements to the online tool:

¦ book a call

¦ enhanced content

¦ mobile optimisation

Priority of issue:
Medium

Presentation information:
Assistant Commissioner Jennifer Moltisanti

Response

Assistant Commissioner Jennifer Moltisanti provided a presentation on the day of the meeting.

Key points of the presentation covered:

¦ Feedback on phase one

¦ Small Business Assist phase two

¦ Launch information

¦ Next steps

Meeting Discussion

Small Business Assist is a contemporary online service that provides an easy pathway for small business to access information on their tax and super obligations.

Small Business Assist was launched at the Council of Small Businesses of Australia Summit on 25 July 2013. Since that launch there have been 33,400 searches of the site (25 July to 8 November 2013). Most popular searches have been on GST, Tax, BAS and ABN.

Small Business Assist has been added to the Small Business Commission website, business.gov.au and COSBOA website.

Phase Two delivers three enhancements to the online tool:

1. book a call – small business users will be able to book a call on line for an after hours call from a customer service consultant

2. enhanced content – options for languages will be available together with relevant you tube videos and upgrade of current content based on user feedback

3. mobile optimisation – Small Business Assist can be viewed on all devices in a format that renders to the device; this will also support small business

Phase Two will be live from 6 December and the link to the small business app available on 13 December 2013.

The update can be downloaded free of charge from the Google Play, Windows phone or the Apple app stores.

Note : since the meeting the app was launched by Acting Assistant Treasurer and Minister for Small Business, the Hon Bruce Billson on 6 January 2014. The app was first released during 2013 Tax Time among a range of new digital products and enhancements to support taxpayers interacting with the ATO online. The January update builds on the success of the app by providing small businesses with easy access to help and information on their smart devices.

Work is continuing on Phase Three which will be deployed in three or four months. The ATO is working with other agencies on a Whole of Government approach to ensure a coordinated support platform to small business.

ATO Submission

Subject:
Supporting small business - publication  

Issue:
Information

Background:
Supporting small business is an e-book developed for the Minister for Small Business; to provide an overview of all the services and support offered by the ATO to small business throughout their life cycle

Impact on clients:
Information only

Priority of issue:
Medium

Presentation information:
Assistant Commissioner Jennifer Moltisanti

Response

Assistant Commissioner Jennifer Moltisanti provided a presentation on the day of the meeting.

Key points of the presentation covered:

¦ How the ATO support small business

¦ ATO small business regional contacts

Meeting Discussion

Assistant Commissioner Jennifer Moltisanti invited members to send any comment on the publication to the secretariat to pass on.

5. Standard Business Reporting

ATO Submission

Subject :
ELS2SBR Project - Update

Issue:
To provide members with details of the progress of the ELS2SBR Project

Background:
The ELS2SBR Project presented to the BASAAG in June 2012 describing ELS and SBR current and proposed future state.

View/suggested treatment:
For members information

Technical references:
Nil

Impact on clients:
Tax Agents will be affected with the transition away from ELS, but as a Tax Professional, BAS Agents will see some changes in functionality when using their software packages.

Priority of issue:
Medium

Has this issue been discussed at any other ato consultative forum?
EAWG (now disbanded)

ATPF (now ATPAG)

Presentation information:
Graham King will provide a presentation on the day of the meeting.

Meeting Discussion

Standard Business Reporting (SBR) is a whole of government solution that uses a common computer language. It allows users to send information and reports to a range of government agencies directly from their software package.

SBR provides BAS agents with greater accuracy, efficiency and certainty when dealing with government.

BAS agents can already submit activity statements and taxable payments annual reports from SBR software. Work is underway to expand the features and functions available to BAS agents. From July 2014 agents will be able to add, delete and update clients’ details from SBR-enabled software packages.

Some BAS agents may need to prepare their practice to take advantage of SBR:

¦ get an AUSkey (though most will already have one)

¦ ensure they are authorised to lodge on behalf of their clients (to enable them to utilise pre-fill functionality)

¦ ensure their preferred software package is SBR enabled.

The ATO has been consulting with tax practitioners and software providers on the best way for tax professionals to interact with the ATO. We will advise BAS agents about their changing environment and experience, giving them time to contact their software providers about any changes to their practices and processes.

6. Superannuation Data and Payment Standard

ATO Submission

Subject:
Superannuation Data and Payment Standard (SuperStream)

Issue:
To provide members with details of the progress of the SuperStream Project

Background:
As part of the SuperStream reforms, the Data and Payment Standard is being implemented to streamline the super contribution process. Broadly, the standard has four aspects:

¦ A standard set of business terms and definitions

¦ A standard data message format

¦ A messaging services standard which sets out requirements for packaging, transport, security and receipting of messages

¦ A standard format for electronic payments

View/suggested treatment:
For members information

Technical references:
Nil

Impact on clients:
From 1 July 2014

¦ All super funds, including SMSFs, are required to be able to receive contributions in the new Standard.

¦ Large and medium employers (with 20 or more employees) will be required to use the Standard when sending
contribution to funds, including self-managed super funds.

From 1 July 2015

¦ All small employers (19 or fewer employees) will be required to use the Standard for sending contributions.

Priority of issue:
High

Has this issue been discussed at any other ato consultative forum?
Not aware

Presentation information:
Director Colleen Gibson will provide a presentation on the day of the meeting.

Meeting Discussion

Segment Lead (Intermediaries Onboarding) Colleen Colquhoun and Assistant Director Cristina O’Brien attended the meeting for Director Colleen Gibson.

The Superannuation Data and Payment Standard is being implemented to streamline the super contribution process. The standard has four main aspects:

¦ A standard set of business terms and definitions

¦ A standard data message format

¦ A messaging services standard which sets out requirements for packaging, transport, security and receipting of message

¦ A standard format for electronic payments

SuperStream is a package of measures designed to bring the back office of superannuation into the 21st Century. Its key components are the increased use of technology, uniform data standards, use of the tax file number as a key identifier and the straight through processing of superannuation transactions.

From 1 July 2014 all super funds, including SMSFs, will be required to be able to receive contributions in the new Standard. All large and medium employers (with 20 or more employees) will be required to use the Standard for sending contributions to funds, including self-managed super funds.

From 1 July 2015 all small employers (19 or fewer employees) will be required to use the Standard for sending contributions.

Under the standard, an employer must:

¦ Provide a minimum data set in the specified message format using the standard terms and language of the XBRL taxonomy

¦ Make payments to each destination fund electronically by direct credit/debit or BPAY

¦ Ensure payments and date are linked using a unique payment reference number

¦ Meet the minimum performance standards by sending money and data on the same day

¦ Respond to fund requests for missing information or queries within 10 days.

Funds must:

¦ Accept contributions in the specified message format

¦ Accept payments from employers electronically

¦ Meet the minimum performance standards by processing standard compliant contributions within three days

¦ Contact employers within 5 days if data is missing or invalid

¦ Refund contributions that cannot be allocated to a member within 20 business days

¦ Pass through choice contributions (recommended best practice for default or employer nominate funds).

The ATO will focus on education and support during the first 12 months after each respective mandated date. Support material is being developed and the ATO will be working with associations and industry partners to facilitate adoption of the standards by employers.

Key messages are being developed and will be published on ato.gov.au. ATO is relying on stakeholders to publish the information on their websites as people don’t always visit the ATO website. Tax agents and BAS agents will receive the information.

7. Tax Practitioner Board Update

The purpose of this item is for Mr Russell Smith from the Tax Practitioner Board to provide members with an update on the Tax Practitioners Board activities.

Meeting Discussion

BOARD ACTIVITY

TPB Outreach

The Tax Practitioners Board (TPB) held its recent outreach activities in Adelaide from 6-8 November 2013. Ian Taylor, Chair of the TPB, along with members of the Board, led sessions with local tax agents & BAS agents in Adelaide, Hahndorf and Gawler.

¦ Attendance exceeded expectations with more than 30% of all South Australian tax practitioners registering for the sessions. 423 tax agents and 297 BAS agents registered to attend the presentations.

¦ 58 financial advisers registered to attend one of the two presentations.

¦ The TPB reached a capacity of 77% of registrations. That is 768 tickets sold out of a possible 1002 available.

The TPB conducted 10 sessions for tax agents, BAS agents and financial advisers who, if they provide tax advice in the context of financial services, will be registering with the TPB in 2014. The sessions lasted for 1.5 hours and counted as continuing professional education (CPE) for attendees.

The sessions focused on registration requirements and an agent’s obligations under the Code of Professional Conduct. There was also an enthusiastic question and answer session at the end of each presentation.

The feedback received was very positive. Comments received included:

¦ “A very useful and informative presentation”

¦ “The information provided a timely reminder on requirements of changes of circumstances and CPE”

¦ “Great conversation and guidance. Looking forward to more sessions”

¦ “Very worthwhile. Nice to have a face-to-face opportunity”.

The TPB are planning further outreach activities, with a visit to Canberra scheduled in early 2014.

ACT registered agents and agents from surrounding NSW regional areas will be invited to attend, including agents from Queanbeyan, Bungendore, Braidwood, Cooma, Batemans Bay, Bermagui, Bega, Merimbula, Hall, Yass, Goulburn, Crookwell, and Boorowa.

$32,000 penalty for unregistered agent

The Federal Court of Australia has ordered a registered BAS agent to pay a $32,000 penalty for unlawfully advertising and providing tax agent services for a fee.

The Brisbane agent was not registered as a tax agent with the Tax Practitioners Board (TPB) but was registered as a BAS agent. However, from July 2010 to August 2012, he advertised and provided services which included preparing and lodging tax returns and amendment requests.

REGISTRATIONS

Applications on hand to be processed at 30 Oct 2013

TA new registration applications	615
BAS new registration applications	275
TA renewal applications	873
BAS renewal applications	242
Total	2005

Current turnaround times – Oct 2013

Type of application	Current turnaround times (days) from the date application is complete and accurate
Registering as a tax agent	40
Registering as a BAS new agent	44
Renewing a BAS agent registration	11

COMPLIANCE ACTIVITY

Complaints and compliance activity focussing on BAS Agents

The number of BAS agents currently under investigation for civil penalty provision breaches is nil.

Please note that most of the sanctions applied relate to the Professional Indemnity (PI) insurance project, followed by the Personal Tax obligations project work rather than external complaints.

Source of complaint or referral	Total YTD at Oct 2013	Total YTD at Oct 2013 for BAS agents only
External sources	494	24
Public	407	18
Registered agent	63	6
ATO Gatekeeper	21	0
Professional Associations	0	0
Media	2	0
ASIC	1	0
Internal sources	325	171
TPB Registrations	0	0
TPB Board/Legal	2	0
TPB RA	320	171
Other	3	0
Total	819	195

Updated figures for the tables below for BAS agents*

Sanctions	Total YTD	YTD BAS agents only
Terminations Part 4	11	2
Terminations Part 3	1	1
Renewals/Reg App Rejected	7	1
Application to Federal Court	6	2
Suspended	39	21
Order Issued	36	21
Written Caution	32	14
Total	132	62

* Cases that have had a stay granted in the AAT have the original outcome maintained for reporting purposes unless overturned in AAT.

If the AAT remits the matter back to the BCC and the original decision is set aside, we report the new sanction imposed but do not change the case outcome.

If BCC sanction is not imposed, the case is not recorded on this list of sanction outcomes.

Board information

PI Insurance

Up until the TASA legislation changes in June 2013 the TPB was providing written notice to registered agents to require them to maintain PI insurance that met our requirements.

From July 2013

PI insurance is a registration eligibility and ongoing registration requirement.

A registered agent or applicant must demonstrate that they maintain, or will be able to maintain, PI insurance that meets our requirements when they apply to register or renew their registration.

We recently released a revised explanatory paper to explain our requirements, in light of the law change.

Continuing Professional Education (CPE)

From July 2013

A registered agent seeking to renew their registration must undertake CPE that meets the TPB requirements.

CPE is now a part of eligibility for registration as well as part of the Code.

All registered agents are required to comply with the Code of Professional Conduct, including Code items (8), (10) and (12).

The minimum hours of CPE per triennium for tax agents is 90 hours (minimum of 10 hours in any given year)

The minimum hours of CPE per triennium for BAS agents is 45 hours (minimum of 5 hours in any given year)

What counts as CPE activity?

seminars, workshops, courses, lectures and training

structured in-house training, conferences, discussion groups and webinars

tertiary courses and educational activities, including distance learning

CPE activities can include up to 25% of technical or professional reading.

We recently released a revised explanatory paper to explain our requirements, in light of the law change.

Declaring BAS Services

From July 2013

The TPB, by legislative instrument will be able to declare certain services as BAS services. We are currently developing the legislative instrument and hoping to have it tabled in Parliament shortly.

8. Other Business

Assistant Commissioner Cameron Sorensen advised the members that he was moving to another business line and this would be his last BASAAG. Assistant Commissioner Colin Walker formerly from Public Groups and International (Resource Rent Tax Project) will take up the position of Assistant Commissioner Practitioner Risk & Strategy and will chair future meetings.

Members will be advised of the date of the meetings for 2014 in the New Year.

A trial is being conducted of ATO initialled secure messaging through the Portal. Members were asked to advise the secretariat if they wished to be involved in the trial.