On Friday 16 May 2014, Tax Counsel Thilini Wickramasuriya ATI attended a meeting of the ATO Tax Practitioner Advisory Group (ATPAG). After the meeting, the ATO issued the following key messages.
The ATO is currently consulting on a number of debt related issues and these items were discussed more broadly at the recent ATPAG.
The ATO is developing strategies to reduce tax debt and defaulted payment arrangements.
Research has commenced to understand the drivers behind accumulation of small business tax debt which is more than two years old (aged debt), and assess the effectiveness of sanctions on the prevention, management and reduction of small business tax debt. At the end of the 2013 financial year small business aged debt totalled over $3 billion of collectable debt. The research will be used in the design of future strategies aimed at reducing and preventing debt.
The ATO is developing a pilot to inform taxpayers of the collection actions which may be taken to recover their tax debt as well as the sequence and timeframes of those actions. The ATO aims to highlight to taxpayers the consequence of not dealing with their tax debts in both the early stages and after significant effort from the ATO to collect the debt or enter into payment arrangements. The pilot results will be compared to current strategies to evaluate their effectiveness.
A number of registered tax practitioners have been found to have personal tax debt. Due to their standing in the community and the influence they have over the affairs of their clients, the ATO expects high standards of compliance with personal tax debt from registered tax practitioners. The ATO has identified those with personal tax debt and intends to contact practitioners to discuss payment options. Unsuccessful negotiations may lead the ATO to consider contact with the Tax Practitioners Board in relation to these matters. Registered tax practitioners with personal tax debts are encouraged to pay the debt or contact the ATO to make arrangements to pay.
The ATO has commenced a pilot to send emails to individuals, businesses, registered practitioners and third party representatives when addressing tax debt. The email confirms the payment plan instalment amount and due date. The email will be offered as an opt-in service when a payment plan is agreed, and it will be forwarded on the same day. The pilot results will be compared to current strategies to evaluate the effectiveness on reducing defaulted arrangements.
For more information on the pilot email scheme go here.
Standard Business Reporting
Standard business reporting (SBR) enabled software allows tax practitioners to access more services through one software package and provides a streamlined process to prepare and lodge reports to government, including the ATO, directly from the practice software.
Initially the ATO aims to provide the services and forms available in ELS to software developers to incorporate into SBR software.
By the end of June 2014, the ATO will deliver the remaining non individual forms and schedules to ELS and identify the core ELS capabilities which should transfer to SBR to ensure a consistent user experience.
From July 2014, the ATO will work with software developers to progressively build the services into their software packages. The ATO expect that towards the end of this year these services, and the benefits of standard business reporting enabled software, will start to become available. By the end of June 2015, the ATO expects SBR to become the standard platform for tax transactions, for tax practitioners and their clients.
The ATO will support and share information with tax practitioners to assist them to prepare for the changes.
Tax practitioners are strongly encouraged to consider the implications of these changes on their practices and take into account when investing in new software or upgrades to software packages.
The ATO is presenting a conference on 17-18 June 2014 which will explore these technological changes along with other drivers in the tax administration system which will present opportunities and challenges on the tax profession in the future. Tax professionals are encouraged to attend.
For more information on SBR go here.
To check the legitimacy of SMS and email contact from the ATO, please check the ATO website.
System maintenance in June 2014
For information about ATO system maintenance and issues during June 2014 go here.