31 May 13 ATO Tax Practitioner Forum
On Friday 17 May 2013, Tax Counsel Stephanie Caredes CTA attended a meeting of the ATO Tax Practitioner Forum (ATPF). Many issues were discussed as put forward by both the ATO and the ATPF’s external members. A short summary of the main issues discussed follows:
- An overview of 2013-14 Budget announcements: Members discussed various measures announced in the 2013-14 Budget and preceding weeks including the phase out of the net medical expenses tax offset, 0.5% increase to the Medicare levy to fund the DisabilityCare Australia scheme, announcement to cap self-education expense deductions, extension of the monthly requirement to pay PAYG Instalments to smaller-sized companies and other entities, Trust Task Force and measures impacting the large market to protect the tax base.
- Tax Time 2013: Tax Time 2013 was discussed including changes for 2013 such as the expansion of income testing to the net medical expenses tax offset and private health insurance rebate, availability of 2013 tax returns forms, Tax Pack no longer being available, pre-fill changes, tax refunds via EFT and the taxable payments reporting system (including the one-off extension to 25 August 2013 to lodge reports if lodged through a tax agent).
- Tax Practitioner Action Plan update: Members were provided with an update in relation to the Tax Practitioner Action Plan.
- Superannuation reforms: Members discussed various reforms including the need for clarification of timing of payments into superannuation funds and SMSF compliance.
- 2013-14 ATO Compliance Program: Members were advised the new Compliance Program would be a dynamic document enunciating compliance risks and would be updated throughout the year for emerging risks.
Below are the key messages the ATO has issued following the meeting:
The Government will provide additional funding over 4 years to the ATO to improve compliance for Australian taxpayers by expanding data matching with third party information. The information provided to the ATO will improve the pre-filling of tax returns and ultimately help the community to comply with their tax obligations.
The Government will provide additional funding over 4 years to the Tax Office to undertake compliance activity in relation to trust structures. The ATO will establish a trust taskforce that will concentrate on the most egregious behaviours leading to tax avoidance and evasion.
A fact sheet on the Trusts Taskforce will be available on the ATO website shortly.
Tax Time 2013
This tax time (from 1 July 2013) the ATO will be paying most refunds electronically. When lodging your clients' individual income tax returns through the electronic lodgment service (ELS), you will need to provide financial institution details where your software has estimated a refund is due.
Depending on arrangements in place with your clients, this could be your client's bank account details or your trust account.
From 1 July 2013, the Department of Human Services will stop automatically sending an annual payment summary and a “Do I need to lodge?” factsheet to their clients via post. Department of Human Services clients will be able to access their Centrelink payment summary details through:
- Centrelink Online Services
- Express Plus mobile apps
- self-service terminals at Department of Human Services service centres.
The self-service channels enable the Department of Human Services clients to access their payment summary from home or from your local service centre. Department of Human Services clients will be asked to visit humanservices.gov.au/selfservice for more information about these channels.
Department of Human Services clients can also request a copy of their payment summary when they call their usual payment line.
The ATO pre-filling service in the Tax Agent Portal will automatically populate payment summary data.
Those taxpayers with a spouse will also need to include spouse income details on the 2013 tax return.
Tax Time 2013 – Compliance and Integrity
Tax practitioners are reminded to remain vigilant during the early stages of Tax Time 2013. ATO analysis of compliance trends from previous years indicates a prevalence of fraudulent claims on income tax returns in early July. One example of such activity is taxpayers providing hand written payment summaries, prior to pay as you go annual reports and reconciliations being made available in the Tax Agent Portal pre-filling reports.
Security on ATO online systems
Identity theft and online fraud is increasing and it is important for tax practitioners to correctly identify clients and protect access to ATO online systems. It is also important that tax practitioners protect their own systems and the client information they have in their practices.
The ATO is working with the tax profession to review practices and processes to enhance the security of ATO online systems.
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.
Tips and Links
- Federal Budget
Budget papers can be accessed from the ATO website homepage or the Treasury website.
- Get ready for Tax Time 2013
Remind your clients to bring in their bank account and BSB details to include on the tax return. More information can be found on the ATO website.
Tax practitioners should ensure new clients show appropriate identification to help protect the tax systems from identity crime and fraud. More information can be found on the ATO website.
For more information on electronic payment summaries, visit humanservices.gov.au/selfservice or refer to the article in the latest issue of The TAXAGENT magazine.
- Taxable payments annual reporting
From 1 July 2012, businesses in the building and construction industry need to report to the ATO the total payments they make to each contractor for building and construction services each year.
Where the annual report is prepared and lodged by a tax practitioner a concessional lodgment arrangement is available for this year only. The report is due by 25 August 2013.
More information can be found on the ATO website.
Members who require further information in relation to any of the above should contact us at Tax Policy.