On 10 June, Anita Challen, Peter de Cure and I attended the Tax Professionals live streamExternal Link.
We were keen to deliver some important information to this audience as well as answer questions. There were, however, a number of questions we did not get to, and I want to take the opportunity to do that now. I can’t address all the questions we received, but I’ve personally read through your questions and comments and picked up on some concerns that I think are important to address.
There was a prevalent theme about the changed stance from the ATO regarding lodging and paying on time. This should be considered a new normal. The law sets out clear obligations with clear timelines, and my expectation is that taxpayers will endeavour to meet these.
Taxpayers experiencing vulnerability
Of course, there will inevitably be exceptional circumstances that mean your clients are not able to meet their obligations on time.
I can’t speak to specific examples, but it’s important to reiterate what our Vulnerability Framework says – we cannot change taxpayers’ tax obligations or waive debt, even for those experiencing vulnerability or hardship.
What we can and should do, is make sure our staff are as equipped as they can be to help these taxpayers lodge on time and explore assistance options like payment plans.
Our frontline staff will always be trying to support taxpayers every day. We deal with a huge volume of inquiries, often involving complex and sometimes deeply personal circumstances, so no two interactions are exactly the same. That means consistency in what we say and our decisions, is something we have to keep working hard to support. And this is difficult.
A number of questions went to the training and recruitment of our staff. We operate in a complex and high-volume system and sometimes we will fall short. However, we are constantly investing in improving our training and the experience of our staff to build consistency. We are establishing bespoke functions (such as the Tailored Support Hub) where we need to apply greater levels of judgment. We always aim to provide helpful and accurate advice, and will keep that aim.
So, in addition to the actions we’re taking – especially when we deal with taxpayers experiencing vulnerability, like chronic illness, homelessness, and family violence – we rely on your relationship with your clients to help us recognise when someone is in serious difficulty. As trusted advisers, you are often the first to see when a client is facing significant challenges, and you play an important role in helping them navigate complex situations, stay engaged with the tax system and access the support available to them. You can help by supporting your clients to lodge correctly and on time, pay on time where they can, and when they can’t, engage with us early to discuss tailored support that may be available.
Remission timing and requirements
Another consistent theme in the questions was confusion or concern around GIC remission, and the ATO’s current posture.
During the pandemic the ATO softened our stance on GIC and other penalties because at the time, we considered it was a necessary action to help address widespread, global, financial distress. But that could not last, nor should it, and we have consciously shifted to a firmer stance to incentivise on time payment.
The Tax Ombudsman reviewed our approach to providing remissions for GIC and noted the strong view from the agent community that we needed to aim for better consistency. So we’ve put in place a number of mechanisms, which we’re building upon, to seek that consistency. Coupled with this is our intended firmer approach to try to ensure payment of all obligations is timely.
Penalties for those who do not meet their tax obligations exist to ensure a strong and fair tax system. As should a mechanism for taxpayers to seek remission when it’s fair and reasonable.
Our focus for granting remissions is on those who want to do the right thing, and usually do, but can’t – but our requirements for remission have not changed. We will continue to use the information you and your clients provide, as well as considering payment and compliance history of the taxpayer, to make remission decisions.
Last year we received over 140,000 requests for remission, some quite complex, so it is inevitable that some decisions may be contestable. We encourage you to send us examples where you think we got the decision wrong so we can continue to strengthen the process.
Changes resulting from the budget
There were a number of questions seeking clarity on the Government’s CGT and negative gearing changes.
I understand the need for clarity to be able to plan for your clients.
Now that the legislation for these changes has received Royal Assent, we will get moving on providing the right guidance and tools on our website to help you plan for your clients.
More broadly, I also want to acknowledge that some of the comments during the livestream reflected the pressure you are under as agents. You are supporting clients through an environment where there is a lot of change, uncertainty and complexity, while also trying to help them meet their obligations. We see the important role you play in the system, and we know that clear, timely guidance from us makes a real difference to your ability to support your clients well.
Thanks again to everyone who came along to the livestream and contributed questions. I want to assure you that our team is reviewing your questions and concerns and taking them into account as we develop communication and guidance materials going forward.
Thanks
Rob