BAS Agent Association Group key messages 5 October 2023

2030 Tax Practitioner Experience Strategy

Strategic Goal 1 – Protect the high levels of engagement and integrity in the tax, super and registry systems

Tax Practitioners Board

Tax Practitioners Board (TPB) provided an update on activities relating to registered agents, including registered BAS agents.

Members comments

• Matters relating to continuing professional development and requested more guidance on this from the TPB.
• Unregistered preparers, which are a focus area for the TPB, and how they are identified, how the TPB engages with them and what sanctions/tools are available.
• How BAS agents and their associations can influence and contribute to the reform discussions that are currently occurring.
• The ramifications of COVID-19 are still evident in the industry.

Strategic Goal 2 – Safeguard the security of the tax, super and registry data and systems

Client agent linking

• The ATO has been working with a special purpose working group, to address issues and challenges for the upcoming release on 13 November 2023. Several BAS Agent Association Group (BASSAAG) members are on the group.
• The 13 November release will extend the client-to-agent linking solution to all businesses with an ABN (excluding sole traders)
• This is an important fraud control and part of a broader suite of measures.

Members comments

• The challenges associated with tax agents removing BAS agents. Right now, a BAS agent simply relinks. This won’t be the case under client-to-agent linking.
• The importance of communication – agents will need to be aware of this change so that when they are onboarding new clients from the 13 November, they can instruct their clients to complete the agent nomination.
• If there will be a step-by-step guide or checklist for both BAS agents and their clients. The ATO confirmed that this is in scope and is being developed.
• If there can be a push notification process, rather than download a list of nominations. The ATO advised this is not in scope for the next deployment; however, it is being considered for future deployments.
• The possibility of having a dedicated telephony queue (with a Fast Key Code) to support agents with any transition issues.

Strategic Goal 3 – Improve tax performance for clients of tax practitioners

Reducing paper activity statements

Members were updated on managing electronic activity statement and instalment notices, and the future of the ‘interim solution’ that was implemented for the digital instalment notices R, S and T and were advised:

• The interim solution of continuing to issue paper copies of instalment notices R, S and T is planned to cease in March 2024.
• Agents will still be able to access and print paper copies in Online services for agents via
  • the on demand outstanding activity statement report
  • communications history.

BASAAG members provided their support for the removal of the interim solution and noted the alternative ways they would be able to obtain paper copies if needed.

It was noted that sending paper-based statements represented a cost to the community. The journey to digitise and make interactions digital by default is progressive, with plans to bring more statements online in the future. The group discussed:

• What are the key issues that inhibit the digital transition from both a client and agent perspective?
• What additional support can the ATO provide to help taxpayers make this digital shift?

Members comments

• The improved security for clients and agents who transact through secure digital channels versus those who use paper channels.
• General consensus or acceptance that digitally enabled clients should be defaulting to digital channels for interactions.
• Potential features that could help encourage clients who are hesitant to go digital because they like the comfort of a paper notice, including
  • notifications via myGov
  • a link to add reminder to calendar
  • text notifications.

Online services for agents

Members were updated on changes being delivered in the digital services channel, focusing on the way the ATO will be able to manage lodgment obligations for taxpayers in disaster zones.

Strategic Goal 4 – Increase trust and confidence in the tax, super and registry systems

Environmental scan

Members discussed a range of issues including the recently released myGovID new device registration notification, which provides verification notifications and notifications when your myGovID is active on another device.

Strategic goal 5 – Empower tax practitioners to add value to their clients through sustainable operations

Data retention

Current issues with respect to data retention protocols (for practitioners) was discussed. The impact of digitisation and increased reliance on digital storage solutions was recognised. The conversation explored:

• The large volumes of accumulated data held digitally and the implications from a cost and risk perspective (for both taxpayers and practitioners).
• Practitioner behaviour in relation to controls in place to manage data risks, particularly where information and data is stored by third parties.
• Potential for the ATO and professional associations to work together to assist and influence the way taxpayers and practitioners manage their risks, including decisions about how much data to retain and for how long (particularly if a taxpayer is no longer a client). This includes education for agents and their clients about the risks of changing service providers (tax agent and/or software provider), and the responsibility for retaining sufficient appropriate records, in accordance with the law.
• What guidance or assurance can the ATO provide with regards to the treatment of taxpayers who only keep data and records for the minimum period of 5 years post-lodgment, for example will the ATO release a record-keeping Practical Compliance Guideline?

Members comments

• Records are retained for a variety of reasons and required by a number of agencies/organisations, not just for tax related purposes. This is a whole of government issue.
• There could be value in the professional associations establishing a data retention and record keeping code of conduct and/or framework. Associations and the ATO should raise awareness at conferences.
• From a behavioural perspective, it is easy to keep digital records; for some it is probably not until they start to hit storage limits that it starts to become a problem or addressed.
• More education is needed around data awareness, retention, and security – to help facilitate the awareness of who owns the data and requirements on retention and safeguarding.
• If software providers are going to remove/delete records, then they need to provide a mechanism for the business/client to be able download and transfer the data.

ATO executive

ATO Second Commissioner, Jeremy Hirschhorn, attended the meeting for an informal discussion with members regarding the BAS agent experience and the continued importance of the role the BASAAG stewardship group plays in the system.

Jeremy acknowledged the journey ahead in transitioning from a culture that sees value in the completion (of a statement) to one that sees value in ensuring data is correct.

Members comments

• The important role of the BAS agent community and its continuing and expanded role into the future. Members noted that a BAS agent may have up to 78 touch points with a client over the course of the year which presents a significant and important opportunity for them to influence client behaviour.
• Improving the education program for tax and superannuation both in schools and TAFES and at the time of registering for an ABN. By improving tax and superannuation awareness up front (for example, when setting up a business or commencing work) many of the later problems experienced by businesses, agents and the ATO could be avoided.

Strategic Goal 6 – Improve small business performance and level the playing field

Improve small business tax performance

An update on the right time reporting and payment pilots was given, the pilots and associated hypothesis included:

• Right time GST payments (2 pilots) – Testing whether more frequent GST payments will assist small business operators with better cashflow management and prevent future debt. This pilot works with select Financial Technology Providers who provide digital services to facilitate more regular GST payments.
• Monthly GST reporting – Testing whether monthly GST reporting (rather than quarterly) will assist some small businesses to better provision for their GST obligations, improving their cashflow management and to prevent new/future debt.
• Guidance in software – Building confidence and certainty into natural systems, detection of potential issues/errors through the issuance of prompts and nudges and therefore potentially reducing the tax gap. This pilot works with select digital service providers, financial technology providers and the tax and BAS agent community to make our public advice and guidance more consumable through software services.

The project team is also exploring a PAYGW mixed cycle reporting pilot, as suggested by members at the June BASAAG meeting. The logistics of delivering this pilot are being worked through with a potential commencement date in early 2024.

The group also discussed potential ‘blue sky’ initiatives to digitalise small business taxation and improve tax performance, guided by the following questions:

• How could we better utilise digitalisation to lessen the administrative burden on small businesses?
• How might we look for better ways to manage risk in the small business ecosystem?
• How might we create more transparency of tax position, or how the ATO might treat or perceive a small business?

Members comments

• Gaining visibility for BAS agents of super, income tax, payment plans, and interest charges would assist BAS agents to have fuller and informed conversations with clients.
• A range of suggestions centred around the theme of the ATO 'pushing out' information and data into the business’ software, which the BAS agent would have access to, including:
  • transactional data feeds
  • ATO correspondence, with a push notification or a pop-up alert
  • BAS agents lodging superannuation guarantee charge statements via the software provider.

Lodge and Pay

The current state of the ATO collectable debt book and targeted strategies being deployed to stop the growth of the debt book through the Reset program was discussed.

• The ATO has noticed that a growing number of businesses who have capacity to pay are waiting for the ATO to pursue debts before taking actions to pay, or entering payment plans rather than paying in full.
• Despite resuming firmer and stronger actions following a sustained pause in debt recovery activity during COVID-19, businesses are de-prioritising payment of ATO debts.
• Restoring and maintaining Australia’s voluntary tax and super payment system requires a shift in the ATO’s approach to payment.
• The ATO expects payment on time and in full, clients should not wait for the ATO to chase them, there know that our approach to concessions is returning to business as usual.
• The ATO is taking decisive and swift action with those clients choosing not to engage and who purposefully avoid their payment obligations. We will continue to offer help and assistance to those who genuinely need it, whilst activating targeted strategies to address the growth in collectable debt which arose during COVID-19. This year, we have a particular focus on recovering high-value and aged debts and requiring timely payment of employer obligations, including unpaid superannuation.
• The ATO has established a special purpose working to provide advice in relation to strategies to reduce debt.

Members comments

• The importance of focusing on preventing future debts (as far as possible) whilst dealing with the challenge of historical debts.
• The possibility of a concessional lodgement period for those clients who voluntarily elect to lodge their BAS monthly.
• The possibility of quarantining historical debts from newly incurred debts and, subject to due diligence assessment, allow a longer period for the repayment of the historical debts.
• Matters associated with small business restructuring and business viability and some of the approaches taken, including guidance offered to businesses who may need advice and support.
• The importance of the ATO following through on our messaging and stance and being consistent in our approach.
• Providing positive messages to businesses who pay on time to highlight and encourage positive behaviour.
• Barriers to winding up businesses, including the costs. Members encouraged the ATO to provide white label products to assist taxpayers to understand their options.

Other business

The December meeting will be a shorter Webex meeting on Monday 4 December.

Members discussed the structure of the 2024 BASAAG meetings and the possibility of increasing the face-to-face meetings to 2 per year.