12 Jul 1313 More on the 85% requirement
MEMBER 147 writes:
"I refer to the comments last week by Member 135 - concerning the 85% lodgment target and suggest that it is not the target that is the issue but rather the Tax Office calculation!
I have always strived to meet 100% by 15 May YYYY; but, the new calculation means that a client I have not seen for several years who I have deleted from my list, consults me for lodgment of CY, IPY and PY tax returns will be seen by the Tax Office as a late lodgment by my office rather than the client being the late lodger. Similarly all those clients who have recently been deleted by agents will now be 'chased' by the ATO for lodgment of outstanding tax returns and they will need to consult somewhere if they do not do their own returns. These will be late lodgers attributed to us if we complete their CY as well as outstanding previous year returns.
The Tax Office should calculate the 'late lodgment' percentage based on our client list at a particular date (31 October YYYY) and any other returns lodged should not fall into the calculation - the ATO can then set the percentage at 100% and create issues/problems directly with the late lodger, not the Tax Agent."
MEMBER 148 writes:
"Member 135 should remember (like I do) that the 50% by December was in a time where GST did not exist and practitioners were not having to deal with the complexity that exists in tax and other laws today. The point that the ATO appears not to get is that Tax Agents just don’t do tax returns. We are advisors, help our clients solve business problems, etc, etc. The majority of us are not solely focused on tax. By assisting our clients with their businesses we actually help them make more money, and guess what, they actually pay more tax and employ people who in turn pay tax. We thereby help increase the tax base. Unfortunately, the ATO is made up of too many decision makers who have no hands on experience as to what actually happens in an accounting practice, and who do not realise that every practice is different. Had this been the case, this 85% rule to my way of thinking would never have seen the light of day.
If revenue collection is the name of the game, generally in each practice it will be known who will pay tax and who won’t pay tax each year. A sensible strategy would be to have all tax payable returns lodged by 31 March and the refunds and non-taxables lodged by 30 June. That way the ATO gets its funds earlier and the Tax Agent is not under pressure to worry about returns that frankly there is no, or no additional revenue for the ATO to collect. If necessary, the Tax Agent can submit a list of tax payable clients by 31July and that becomes the basis of the lodgment program. This may not be the ideal solution but at least it’s the thinking man’s starting point.
Finally it should not be the Tax Agent’s responsibility to make a client bring his work in on time. It is the client’s! That’s how it has always been and should continue to be so."
In response to the numerous pieces of feedback published in TAXVINE in recent times, the ATO has issued the following comments in relation to the Lodgment Program Framework:
"The new Lodgment Program Framework has been developed following extensive consultation over a number of years with tax practitioners and professional representatives on the ATO’s Lodgment Working Group. The framework was developed in recognition that most tax practitioners are doing the right thing, and to work with those who continually fail to meet their lodgment program obligations on-time. We will continue to communicate regularly with you to make sure that we are providing you with the information and support you need.
During the 2012-13 transitional year, we’ve worked with tax practitioners to remove over 620,000 clients from client lists and regularly sent information about practitioners lodgment performance. We have also continued to provide you with information via newsletters, broadcasts, webcasts and podcasts, as well as responses to frequently asked questions, so that you have easy access to necessary information and support.
We understand that there can be extenuating circumstances that affect your lodgment program. If you don’t meet the 85% on-time lodgment requirement, we will always contact you in the first instance to understand your individual circumstances and discuss options for improving your lodgment performance. Lodgment deferrals will continue to be available to assist you to manage short term obstacles impacting your ability to lodge by the due date."