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20 Feb 09 Impact of the Tax Bonus on tax agent practice

Following the ATO workshop on Thursday 5 February 2009, in respect of the administration of the Government’s tax bonus payment scheme, the ATO’s Lodgment Working Party held a teleconference on Monday 16 February 2009 to discuss the ATO’s proposals to mitigate the impact of the measures on tax agents' practices.

The Taxation Institute was pleased to see that the ATO had addressed its concerns about taxpayer’s affected by natural disasters (in particular the Victorian bushfires and the flooding in Queensland) by creating a class exemption and preserving their entitlement to the bonus until 30 June 2010. However, the announcement has failed to adequately address the Taxation Institute’s concerns about the medical emergencies. The Taxation Institute did warn the ATO that the “in excess of two week hospitalisation requirement” in light of modern hospital protocols (which are aimed at getting people out of hospital as quickly as possible with a long convalescence at home) would not address the problem. People facing double knee replacements, spinal surgery or heart by-pass operation would not qualify for an extension to lodge and the tax bonus, despite facing months off work.

Feedback from members on the other tax agent assistance measures has not been positive. As a number of members do not have high number of trust, partnership, company or superannuation returns, those members have expressed concerns about the usefulness of the three week extension. Other members have expressed concern about their protective lodgment extension requests, lodged before Royal Assent, being rejected as they had not proven that their returns would be late.

The Taxation Institute will continue to consult with the ATO on this important issue.

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