On Friday 1 December 2017, Tax Counsel Stephanie Caredes attended a meeting of the Tax Practitioner Stewardship Group. The ATO has issued the following key messages:
In the 2016-17 Mid-Year Economic and Fiscal Outlook, the government announced that it will allow the ATO to disclose tax debt information to credit reporting bureaus.
The purpose of allowing the ATO to report tax debt information to credit reporting bureaus is to:
- support more informed decision making in the business community by making overdue tax debts more visible. This will enable businesses and credit providers to make a more complete assessment of the creditworthiness of a business when they consider extending credit or terms of trade.
- reduce unfair advantage obtained by businesses that do not pay their tax on time. These businesses may have a competitive advantage over businesses who comply with their obligations.
- encourage businesses to engage with the ATO to manage their tax debts and, where an entity is unable to pay a tax debt in full, enter into a sustainable payment plan, which will exclude them from credit reporting.
The ATO will have the discretion to report the tax debt information where a business meets all the following criteria:
- has an Australian Business Number (ABN) and is not an excluded entity
- has a tax debt, of which at least $10 000 is overdue by more than 90 days
- has not effectively engaged with the ATO to manage its debts.
Targeted consultation (a number of members of this Stewardship Group were involved) occurred in February and November 2017. Current timelines will have draft legislation, legislative instruments and ATO administration guidelines available for public consultation before December 2017 to approximately mid-February 2018, with legislation planned for the autumn sitting in March 2018.
Tax professionals can access a recording of the Transparency of Tax Debt webinar held on 22 November 2017, documents for consultation, and details of how to make submissions to Treasury via https://lets-talk.ato.gov.au/ToTD
We encourage you to talk to your clients about engaging with the ATO prior to the measure coming into effect in order to manage any outstanding tax liabilities.
For more information refer to Transparency of Debt measure FAQ or contact TaxDebtTransparency@ato.gov.au
Small business superannuation clearing house
The ATO is moving the current small business superannuation clearing house system into the ATO Online environment in early 2018. The intent is to seamlessly move the small business super clearing house from the Department of Human Services to the ATO. The move provides an opportunity to improve the service and integrate with current ATO systems. There will be a short period in late February 2018 where registrations and contributions will not be possible due to the migration of existing data and scheduled system deployment.
The clearing house will no longer be accessible with a username and password combination. Clients will require a credential to access the clearing house from early 2018. Approximately half of the current active users do not have an ATO credential. Clients will be able to access the system using Manage ABN connections or an AUSkey.
Tax practitioners will no longer be required to use their client’s user name and password to access the clearing house and will be able to access the system through the Tax Agent and BAS Agent Portals by selecting the ‘Manage Employees’ menu.
The ATO has published a recording of an informational webinar on the clearing house changes. For more information, visit SBSCH joining ATO online services.
Self managed superannuation fund event based reporting
The ATO has finalised its position in relation to self managed superannuation fund event based reporting. After detailed consultation with the self-managed super fund sector, the ATO announced that its implementation of event-based reporting from 1 July 2018 will be limited to those self managed superannuation funds with members with total superannuation account balances of $1 million or more.
From 1 July 2018 those self managed superannuation funds that do have members with total superannuation account balances of $1 million or more will be required to report events impacting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
Risky retirement planning arrangements
The ATO is warning self managed superannuation fund trustees and retirees about the risks of some retirement arrangements. The ATO has previously raised concerns about dividend stripping arrangements and contrived arrangements involving diversion of personal services income to a self-managed superannuation fund.
There are some emerging arrangements the ATO would like to bring to people’s attention, including:
- artificial arrangements involving self managed superannuation funds and related-party property development ventures
- arrangements where an individual or related entity grants a legal life interest over a commercial property to a self managed superannuation fund. This results in the rental income from the property being diverted to the self managed superannuation fund and taxed at lower rates whilst the individual or related entity retains legal ownership of the property
- arrangements where individuals (including self managed superannuation fund members) deliberately exceed their non-concessional contributions cap to manipulate the taxable component and non-taxable component of their fund balance upon refund of the excess.
Modernising Business Registers
As part of the National Business Simplification Initiative, the government is considering options to streamline key business registry functions, upgrade IT infrastructure, deliver contemporary business registry services and provide enhanced user experiences.
Business and government rely on information contained in business registers. There are approximately:
- 2.2 million companies on the company register.
- 7 million active Australian Business Numbers (ABNs).
- 780 million Australian Business Register searches conducted and
- 500 government agencies using Australian Business Register data.
The Modernising Business Registers Program will focus on improving registry services, reduce complexity for business and enable better access to registry data.
All non-confidential submissions to the public consultation on Modernising Business Registers conducted in August 2017 are now available on the Treasury website. The Hon Kelly O’Dwyer MP, Minister for Revenue and Financial Services and The Hon Craig Laundy MP Assistant Minister for Industry, Innovation and Science have jointly issued a media release opening a request for information to explore solutions for a potential whole-of-government business registry platform.
Work related expenses
The work related expenses working group held their first meeting on 10 November 2017. The group consists of members of the Tax Practitioner Stewardship Group, professional associations and ATO representatives who will co-design administrative strategies to address identified risks including the individuals’ tax gap program.
The areas of focus were agreed as:
- Influencing community attitudes – balancing community conversations via the media and improved public advice, guidance and tools
- Influencing tax practitioner behaviour – ranging from partnering with professional associations to provide education and support tools, greater transparency of risk profiles, targeting higher risk agents and publicly demonstrating the consequence of non-compliance
- Technology – providing real time messaging at point of preparation and progressing digital substantiation including enhancements to myDeductions or other products.
- Ways to modernise and simplify work related expense rules, in particular those relating to higher risk areas.
Tips and links
If you have information about retirement schemes that look too good to be true, or would like to make a voluntary disclosure, phone 1800 060 062 or email firstname.lastname@example.org.
Scam emails, SMS or phone calls can be very convincing but there are some things you and your clients can look out for to recognise or report a scam.
You can now make a verbal request to set up direct debit payment plans for your clients. Find out more.
Members who require further information in relation to the above or have issues they would like to have raised at this forum should contact us at Tax Policy.