BAS Agent Association Group (BASAAG)

Transcription

1 UNCLASSIFIED MINUTES FORUM MEMBERS, APRIL 2018 SPEAKERS AND GUESTS FORMAT AUDIENCE DATE CLASSIFICATION BAS Agent Association Group (BASAAG) Minutes For the meeting on 20 April 2018 Meeting held via telepresence at: Adelaide, 26 Franklin Street - Level 4 Room 702 Albury, 520 Smollett Street Level 5 Room 24 Box Hill, 913 Whitehorse Rd - Level 16 Room 701 Canberra, 21 Genge Street - Kembery N1.13 Docklands, 747 Collins St - Level 8 Room 710 Latitude East, 52 Goulbourn Street - Level 15 Room 719 Moonee Ponds, 6 Gladstone St Level G Room 703 Newcastle, 266 King Street - Level 4 Room 706 Upper Mount Gravatt, 28 Macgregor St, Level 2 Room 704 Commencing at 9:30am (AEST) UNCLASSIFIED For further information or questions, contact Sue Hassiotis (08)

2 Attendee List Colin Walker (Chairperson) Matthew Addison Rochelle Park John Birse Keith Clissold Martine Joly Cate Kemp Darren McMahon Peter Thorp Assistant Commissioner, Intermediaries and Lodgment Institute of Certified Bookkeepers Association of Accounting Technicians Tax Professional, Jim s Bookkeeping Tax Professional, Metropolitan Taxation Services Chartered Accountants Australia and New Zealand Tax Professional, Small Business Financial Ops (SBFO) Tax Professional, Dardee Pty Ltd Australian Bookkeepers Association Ltd Presenters and guests Andrew Watson Sonia Corsini Michael Karavas Phillip Jones Maria-Luisa Roache Anne-Marie Pergolese Jason Aitchison Ben Foster Ian Taylor Ken Kua Jason Gunton Susan Dredge Assistant Commissioner, Intermediaries and Lodgment Director, Intermediaries and Lodgment Senior Director, Small Business Assistant Commissioner, Indirect Tax Director, Indirect Tax Assistant Director, Indirect Tax Assistant Commissioner, Intermediaries and Lodgment Director, Enterprise Solutions and Technology Chairperson, Tax Practitioners Board Assistant Director, Intermediaries and Lodgment Assistant Director, Individuals Director, Individuals Apologies Joyce Correnza Suzy Komuczki Tony Greco Russell Smith Director, Intermediaries and Lodgment Tax Professional, Office Oracle Institute of Public Accountants Tax Professional, Carruss Consultants Secretariat Sue Hassiotis Intermediaries and Lodgment PAGE 2 OF 13

3 1. Welcome and introductions The Chairperson opened the meeting, welcomed members and noted apologies. Minutes from the last meeting held on 28 November 2017 have been distributed and published to the ATO website. Action items Action items tabled at the meeting held 28 November 2017 Reference BASAAG 2811/03 Agenda Topic Action item Responsibility Update Status New ATO online services Members requested a future agenda item to discuss the ability for BAS agents to view income tax debit account balances. Colin Walker We have received some advice from the TPB in relation to this matter advising that it is a matter for the ATO to decide who has access to ATO held information. Ongoing Reference BASAAG 2811/06 Agenda Topic Action item Responsibility Interim Update Simpler BAS The ATO will update members on the number of activity statements that are being completed by self-preparers using the simpler BAS reporting method Richard Robinson Simpler BAS is the default GST reporting method for 2.56 million small businesses with a GST turnover <$10 million. There are only 38,113 businesses that continue to use GST full reporting. The two components of Simpler BAS are: 1. Simpler BAS reporting - reduces the number of GST questions on the BAS from 7 to 3 (default position) and 2. Digital bookkeeping solution - Option for small business to take up changes to their accounting software to reduce the number of complex GST tax codes Simpler BAS reporting was successfully implemented in full from 1 July 2017 and 2.56m eligible small businesses were automatically transitioned by the ATO. The ATO is continuing to work with our Digital Software Provider partners to ensure accessibility and maximise the take-up rate of the Simpler BAS digital bookkeeping solution, expected to be available in the second half of Status Propose to close PAGE 3 OF 13

4 2. Online BAS Check The Online BAS Check represents a significant shift in the ATO s risk strategy towards real time prevention and support. This provides additional certainty to businesses and their intermediaries, by empowering them to identify and self-correct business activity statement (BAS) errors prior to lodgment. Client engagement activities undertaken by the ATO have shown a significant number of errors have been made when business activity statements are prepared and lodged. These errors can be costly to the client and are resource intensive for the ATO. The Online BAS check is a concept that can improve the client experience for all GST registered clients, by using pre-emptive verification checks on business activity statements lodged through electronic channels. The ATO s driver for change is to prevent inadvertent errors in preparing and lodging activity statements, which impacts on GST correct reporting. This includes calculation errors or wrong values entered against specific labels on the business activity statement. Clients may not be aware of these errors before the statement is lodged and finalised resulting in an underpayment or overpayment of GST. Current ATO strategies predominantly focus on post lodgment detection and treatment rather than prelodgment prevention and correction. ATO processing of inadvertent BAS errors is an irritant for clients, which impacts on their confidence in ATO systems and the issuing of refunds in a timely manner. The main benefits of the Online BAS check concept are: Improved accuracy of reporting Improved refund process Improved client and intermediary experience Greater transparency and assurance resulting Increased confidence in the community that BAS are checked and monitored by the ATO Reduction of ATO initiated interactions allowing clients more time for business activities. Preventing errors through an automated process prior to lodgment will reduce compliance costs for clients, intermediaries and the ATO. The concept is consistent with the principles applied in supporting clients with real time notifications provided to individuals that lodge an income tax return using mytax. Predictive modelling, validation checks and real time analytics will be used to identify errors or anomalies before an activity statement is lodged. An electronic message will be received that prompts the client to self-review and/or correct the information prior to lodgment. The Online BAS Check predictive modelling will use an algorithm that is applied to the client s past 24 months lodgment history to forecast an acceptable range of values that would be expected. The algorithm also takes account of seasonal and cyclical fluctuations. The forecast will be applied to labels G1 (sales), 1A (GST on sales) and1b (GST on purchases). Validation rules will be used to identify anomalies and apply them to other labels. For example, clients who are attempting to lodge an activity statement prior to the period end date, may be sent a message advising them that the period has not ended yet and that they may need to take this into consideration. It is anticipated that tailored messages will appear next to the relevant labels on the screen where the validation rules or predictive models trigger an error or anomaly; this could include an amount entered outside of the acceptable range based on their lodgment history. For example, a message will appear when a client may have potentially overstated or understated their GST on sales. An example of the message may be the amount reported at 1A (GST on sales) is unusually low to the previous activity statement, review the figure to ensure it is correct. A message will not prevent a client from lodging their BAS. The client can either change the amounts entered or submit the BAS without making any changes. Clients who enter amounts that are within the acceptable ranges and do not fall outside the parameters of the predictive modelling will not receive a message. It is important that when a client does find an error that they fix it. The reason for this is that the modelling will work on the latest available data, so when they revise a BAS that information feeds directly into the forecasting of the predictive modelling. Whilst the Online BAS Check concept has scope to be applied to all BAS lodged online, there are a number of issues that need to be considered including: PAGE 4 OF 13

5 a scalable deployment of the Online BAS Check concept to populations how bulk lodgment of BAS by tax and BAS agents will be addressed and how messages will be delivered for bulk lodgment the consequential outcomes to the client experience and any impacts of materiality the support and guidance businesses will need to identify the transaction/s in error to enable them to recalculate and adjust the relevant label. This will form part of the ATO s engagement and communication strategy. The Online BAS check concept was tabled at the GST Stewardship Committee in February 2018 and received in principle support. Online BAS check has been through a process of consultation and is currently at the co-design concept stage. Given the significant role BAS agents have in supporting their clients to lodge correctly, the ATO is seeking member feedback on the Online BAS check concept and would like to work with members of this group as part of the co design. The ATO is considering implementing Online BAS check from 1 July This commencement date will be dependent on other strategic digital and experience priorities and is subject to consultation, co-design and user testing with impacted stakeholders including tax practitioners. PAGE 5 OF 13

6 3. Lodgment reminders for clients of BAS and Tax agents The ATO has detected a gradual decline in overall on-time activity statement lodgment rates. To assist in addressing this decline, the ATO is proposing to consult with BAS and tax agents to identify how the use of alternative digital communication channels can improve on-time lodgment performance. The decline in lodgment rates has been centred on activity statements but the focus of these consultations and any resulting initiatives identified will be to improve lodgment rates of all document types. The ATO has issued SMS and letter reminders to pilot groups to assess the effectiveness of this approach. The use of SMS reminders resulted in an effective response rate with activity statement lodgment predominately being received via the Business Portal. The ATO recognises the important role that BAS and tax agents play in the tax system and would like to work with members to co-design a strategy where the ATO could use alternative digital communication channels to improve on-time lodgment particularly through the use of SMS. The ATO would develop the message to be more of a reminder for the client to visit their tax practitioner rather than suggesting that the client lodge activity statements or returns themselves. The ATO would like to work together with members to design a strategy to send out a broad scale SMS to clients of BAS and tax agents advising them to seek assistance from their tax practitioner. The ATO is aware of the sensitivity of contacting clients directly rather than contacting the tax practitioner in the first instance. The intent of this strategy is to support small business and assist tax practitioners in managing the lodgment performance of their clients. The ATO will ensure the messaging recognised the relationship that businesses have with their tax practitioners. Members commented: Many client contact numbers listed on ATO systems belong to the tax practitioner. Contact numbers may need to be corrected prior to this type of contact campaign. The ATO should consider developing contact policies for the use of SMS. There is a risk that SMS messages from the ATO will begin to be ignored by clients if too many messages are sent. There is the possibility that if an SMS is sent in advance it may be ignored by the client. An SMS after the due date may be more effective. A report available in software of clients with overdue lodgment or payments obligations could assist tax practitioners to manage better on time lodgment and payment performance. The ATO canvassed with members, circumstances where clients were not engaged, or engaging with their agent, and the various frustrations this caused. Members did note that occasionally direct contact from the ATO does result in client s re-engaging with the agents, however care must be taken, as client s have engaged an agent for the reason of wanting someone else to interact with the ATO. The ATO noted that there are certain points where it can be assumed that despite the best efforts of agents, clients are choosing not to engage for example where a client has failed to meet their lodgment obligations for the 3 rd period, then the ATO could assume the agent was trying, but the client was not engaging, and an escalation of direct contact would be appropriate. Members discussed the fact that certain circumstances could warrant this type of intervention. The ATO agreed to continue developing this thought and return to members with a proposal in the future. Members were asked to send any further ideas or suggestions to the BASAAG@ato.gov.au. PAGE 6 OF 13

7 4. Single Touch Payroll Payroll software providers need to have advised their clients how they plan to offer Single Touch Payroll (STP) reporting. STP reporting options will include either an update to existing software, or an additional service offering. Tax professionals should encourage clients to contact their software provider to discuss a transition plan. Employers with 20 or more employees will need to check if their software provider will be ready for the 1 July 2018 reporting start date. If a deferred start date is required by the software provider they need to apply to the ATO, preferably by 31 May Once processed, the ATO will issue a Deferral Reference Number and confirmation of the deferred due date. Tax Professionals can also apply for a deferral on behalf of their clients. The ATO will provide updates, messaging and support as we move towards 1 July Tax professionals are encouraged to regularly check the Single Touch Payroll page for updates. For more information visit: Single Touch Payroll news, events and resource page Factsheet Checklist Tax practitioners pack The ATO is holding webinars on STP for employers, tax professionals and industry associations. The webinars are a short presentation followed by questions and answer time. Tax practitioners and their clients can view some recordings of past webinars at single touch payroll news, events and resources page. PAGE 7 OF 13

8 5. ATO Online Services Improving digital services for tax practitioners project will deliver Online services for agents that will eventually replace the BAS and Tax Agent Portals. The new service will include all existing portal functionality as well as providing some new services to improve your digital experience. Equivalent functionality will also be made available for digital service providers as an application programming interfaces (API) to create similar functions within practice management software and made available to the tax professional market should they choose to do so. Tax and BAS agents may begin to receive communications from their software providers regarding new services that may be built into their practice management software. A private beta group is currently testing the ATO Online services for agents in a live environment. The number of participants is gradually expanding to include a cross section of tax and BAS agents representing different market segments in regional and metropolitan areas and with varied client bases. This group of users will initially provide feedback on the functionality available within ATO Online services for agents as well as supporting guidance materials. Feedback from the private beta group participants is reviewed and prioritised using a number of criteria. Online services for agents will be made available to all practitioners through a public beta testing phase later this year although a date has not yet been set. At the time that the public beta launch begins, all tax practitioners will be able to opt into the new ATO Online services for agents. The existing BAS and Tax Agent Portals will continue to be available during this time. The two systems will run in parallel although some new services will only be available in Online services for agents. During the public beta the ATO will continue to receive and prioritise feedback to continue to refine the service. Online services for agents will eventually be made available as the default online service for all tax practitioners. The existing Portals will still remain for a period of time before a decision is made to decommission them. The ATO will progressively continue to release API s to digital service providers so that they may develop and deliver new functionality within their practice management products. Reference BASAAG 2811/01 Agenda Topic Action item Responsibility Update Status ATO online services for agents The ATO will explore the options to provide BAS agents with a list of overdue lodgment obligations and upcoming overdue lodgment obligations Sonia Corsini The ATO Online services for agents will have a link from the home page that will take users to a report that shows overdue lodgment obligations, similar to the report in the existing BAS Agent Portal. The ATO noted there is an appetite from BAS agents to have access to a report that shows upcoming lodgment obligations. This service is not in the current system design, however will be considered in future enhancements or provided as a service that digital service providers can build into practice management software. Propose to close Reference BASAAG 2811/02 Agenda Topic Action item Responsibility ATO Online services for agents The ATO will investigate the use of cookies to provide BAS agents with the option to set the default systems (old portal services or new portal services), or switch between the services at a time they feel they are ready. Sonia Corsini PAGE 8 OF 13

9 Update No decision has been made around this option. Status Propose to close. Reference BASAAG 2811/04 Agenda Topic Action item Responsibility Update Status ATO Online services for agents Investigate the possibility of viewing notification that a client has been reported to a credit reporting agency, and whether a BAS agent has authority to view that type of communication or notification. Sonia Corsini These service options will only be considered once the transparency of tax debt measures becomes law. Propose to close. Reference BASAAG 2811/05 Agenda Topic Action item Responsibility Update Status ATO Online services for agents The ATO will continue the current design intent when making lodgment due dates visible, to display concessional lodgment due dates where prior statements have been lodged electronically via a tax or BAS agent. Sonia Corsini There are no changes currently proposed for the way in which lodgment due dates are displayed in ATO Online services for agents. Propose to close PAGE 9 OF 13

10 6. Digital Identity Program The ATO is working together with other agencies including the Digital Transformation Agency (DTA), and the Department of Human Services (DHS) to deliver a whole of government program called Govpass. Govpass will ensure the integrity of the tax and super systems and the digital economy. Govpass will provide both tax practitioners and the ATO with the security and confidence of knowing only authorised individuals are interacting with the government. Govpass will provide a more contemporary log in and easier way to access services. The ATO is a lead agency in the whole of government program and will be developing: AUSid, a solution that will allow agents to prove their identity and will also give a new contemporary log in credential that securely identifies an individual as an alternative to AUSkey AUSid as an app that can be downloaded onto a mobile device, allowing an individual to create their digital identity/credential and the ability to log into any mobile device. Relationship Authorisation Manager (RAM), improving the way authorisations work across government. RAM allows an individual or business to represent another business and will only need to prove their identity once across government. The ATO will be progressing via staged releases: The first release will enable AUSid for people representing a business for ATO and Australian Business Register services (without face verification) A future pilot will enable facial verification for individuals applying for a tax file number or using ATO and other whole of government services Later pilots and releases will expand AUSid to whole of government business services and replace AUSkey Existing solutions continue to be available in parallel (AUSkey, mygov, Cloud Authentication and Authorisation, Managing ABN Connections) Consultations and user design has commenced This is a complex whole of government program of work and it will be subject to stage gate release processes. A concept of Govpass is a federated eco system of identity, where one can choose who they prove their identity with giving the choice of who and how personal information is shared. The ATO s AusId includes the existing document verification service and a new facial verification service that, in the right circumstances, allows for a facial image to be matched with for example a passport photo. Going forward the ATO needs a contemporary and secure digital identity solution and an alternative to AUSkey that can be utilised on mobile devices. The ATO has a number of commitments and priorities that are dependent on secure online digital identity solutions. The combination of identity enrolment and credential strength, provides the overall level of confidence that a person is who they say they are. The digital identity experience involves an individual s identity credentials being registered once, this then allows the individual to access services either for themselves or a business. PAGE 10 OF 13

11 7. Tax Practitioners Board update From 1 July 2018 for all new applicants the Tax Practitioners Board is adopting the first phase of digital identity which is the requirement for new tax practitioner applicants to provide a maximum of 3 documents to prove their identity. For example documents required will be a passport, drivers licence or Medicare card. Once identity has been verified the applicant will be able to continue with their application. The tax practitioners number (RAN) is required before any access to ATO systems is granted. From 1 December 2018 the annual declaration form will be modified requesting existing tax practitioners to provide the same identity checks as required for new applicants as part of the annual declaration process. This will be an online interactive process. Since the 1 July 2017 the Tax Practitioners Board has received a total of 4,914 new BAS agent registration applications and 22,252 renewal applications. This included 1,258 BAS new applications and 4,048 BAS renewal applications. The current average processing time for new BAS agent registration applications is 21 days. For BAS agent renewal registrations, it is 9 days. These times are within the service standard of 30 days. There are exceptions where applications are taking longer to process, however this is usually due to extra information being requested by the Tax Practitioners Board from the applicant. Of the individual BAS agent population of 12,315, a total of 7,389 (60%) identify as members of a TPB accredited recognised professional association (RPA). Tax and BAS agents are continuing to download the Registered tax practitioner symbol (symbol) from our website. As of 31 March 2018, 7,751 (63%) of the 12,303 BAS agents in business have downloaded the symbol. The symbol is a great way BAS agents can show they are registered and raise awareness of the importance of being registered with their clients. On average, in excess of 99% of practitioners required to lodge their annual declaration each month do so by the due date. We have had to act against a small number of BAS agents for not submitting their annual declaration or for late submission. This has resulted in 23 written cautions, 9 orders and 5 registration terminations since 1 July Compliance update was provided regarding annual declaration process, professional conduct and integrity complaints. Since 1 July 2017, the Tax Practitioners Board has received 1,130 complaints and referrals. This included 54 complaints concerning BAS agents. 109 complaints were made regarding possible unregistered tax practitioners (note this includes tax agents, BAS agents and tax (financial advisers). Members requested for future meetings if more specific information regarding the nature of complaints the Tax Practitioners Board has been asked to investigate and how many have ended up with termination or code of conduct. The Tax Practitioners Board held specific BAS agent, speaking event sessions which were well attended by BAS agents. PAGE 11 OF 13

12 8. Activity Statement issues Members were provided an opportunity to discuss some of the irritants associated with activity statements. The discussion provided opportunity for the ATO to clarify why some processes exist and how some solutions are being developed. The ATO will maintain a register of irritants to provide continual visibility of ATO activities or responses to identified or new irritants. Activity statement labels G1 and T1 Each quarter (quarters 1, 2 and 3) the ATO issues around 2,000 letters to clients who pay instalments using the rate method and there is a discrepancy between their G1 and T1 amounts to confirm an error has not been made on the activity statement. Sections of the population are excluded from these communications as the nature of their business will not require the T1 label to equal the G1 label. The intention behind the letters is to address three common reporting errors on activity statements: T1 label is less than G1 T1 label is equal to 0 T1 label is less than monthly G1 label totals for the quarter The ATO acknowledged that there will be circumstances where the G1 and T1 labels will differ. These include examples such as sale of capital assets returned in GST, cash or accrual accounting and sales accounted for as an agent. However, based upon the results of the correspondence strategy and clients that are contacted directly, it is more likely that an error has been made rather than a bona fide reason for the discrepancy. As a result of this communication about 10 percent of the 2000 contacted will revise their activity statement reported figures. The ATO is pursuing a help and education strategy to ensure people report correctly on their activity statements. Members understood and accepted the reason for the communication to clients and commented that the message behind the letter was correct however the wording of the letter could be changed. Nil activity statement The Tax professional newsletter that issued on 4 April 2018 had item relating to Nil activity statements must be lodged with more information at ato.gov.au. The chair explained that the reason for this communication was that ATO research has shown that many small businesses do not realise there is a requirement to lodge a nil activity statement. In the last financial year 33 percent of nil activity statements were lodged over 29 days after the due date. The ATO encourages tax practitioners to advise their clients that notifying the ATO that lodging an activity statement with no trading activity is still required. Incorrect payment details The system problem with incorrect payment details showing on an activity statement that is printed immediately after lodgment has been rectified. Payment reference numbers (PRN) or EFT codes are unique to each clients tax accounts. For example, income tax, fringe benefits tax, activity statements and super accounts will each have a unique PRN. Payments to activity statement accounts are generated using the client s Australian Business Number (ABN). If a client does not have an ABN, the Payment Reference Number is generated using the clients Tax File Number. PAGE 12 OF 13

13 9. Other business, forward agenda items and meeting close Professional Services Reference Group (PSRG) The Professional Services Reference Group is a group brought together from the Professional Associations and members to focus on solutions for irritants that can be rectified easily and in a short timeframe. A webinar was held on 18 May 2018 which discussed how the ATO is working with tax professionals through the Professional Services Reference Group (PSRG) to address irritants and to demystify the debt collection process for tax practitioners and their clients. Compromised clients Members were provided with a pre reading agenda paper regarding the Client Verification process for Taxpayers with Compromised identities. There are situations that require the ATO to place a compromised indicator on the clients account to protect both the client and the tax practitioner. The current process for removing a compromised client indicator will change and improve with the new Online services. The ATO is exploring a change to the verification process conducted by the ATO that will allow tax and BAS agents ongoing access to client information without the need to contact the ATO to lift the indicator each time access to the client information is required. There will be a verification process applied by the ATO prior to the agent adding a client to ensure that the agent is authorised by the genuine client (not a fraudster) as their representative. Tax and BAS agents will be asked to confirm the type of client identity information that was provided at the time the agent was engaged to represent the client to ensure the integrity of the client verification process and that the documentation used was not part of the original compromising event. This will be a specific vulnerability for agents that have not met the new client prior to lodging the return. Once the agent is confirmed to be an authorised representative, they are able to interact in the same manner that they can for clients who do not have compromised identities for all tax and super products. This change is scheduled for implementation in December Members were asked to review the paper and provide any suggestions/comments to improve the process to BASAAG@ato.gov.au. Taxable payments annual report (TPAR) By the 30 June 2018, self-managed super funds will be required to lodge a TPAR. There is a discrepancy with the lodgment format of paper or electronic lodgment. Various solutions to the lodgment format were discussed. Members were asked to forward any suggestions regarding the transition of TPAR lodgments. Members discussed occupation codes used when lodging TPAR and the receipt issued when a TPAR is lodged. ATO requested some examples of discrepancy with TPAR lodgments. Members recommended more education around who is required to lodge a TPAR, the information is available on ato.gov.au, however this is not well known by clients. Other business Next meeting scheduled for Friday 31 August 2018 Venue and format of meeting to be announced Agenda items can be forwarded to BASAAG@ato.gov.au at any time. PAGE 13 OF 13