Tax Practitioner Stewardship Group key messages 28 November 2024

Protect the high levels of engagement and integrity in the tax, super and registry systems

Payment strategy communication approach

The payment strategy is focused on reducing non-payment of tax liabilities, particularly GST, PAYG withholding and super guarantee (SG). The ATO has developed key messages to support the expectation that all taxpayers will pay in full and on time or will reach out to the ATO straight away if they need support. The group discussed messaging and the ATO's planned comprehensive, targeted and phased communication approach on the payment strategy.

Member comments

Members suggested ATO communications and letters should have clear messaging on the impact of paying late and accruing ATO debt.

Members also raised issues they are seeing regarding general interest charge (GIC) remission requests and noted the need for improved consistency and transparency in decision making. The ATO acknowledged this feedback and noted several of the issues raised are already being worked through.

Members advised general timeline information on when the ATO will issue nudge messaging and letters would be useful.

Safeguard the security of the tax, super and registry systems

Implementation of a global and domestic minimum tax

The ATO is progressing the implementation of the global and domestic minimum tax measure announced in the 2023–24 Budget.

Australian primary legislation has passed and is now awaiting Royal Assent. The law design process for the subordinate legislation is ongoing and it is expected to be tabled following enactment of the primary legislation.

The design of Australia’s new domestic returns, and the IT systems required to enable lodgment and exchange of data, is underway.

The ATO has commenced further consultations via the Pillar Two Global and Domestic Minimum Tax Working Group. The group was established in August 2024 and will discuss feedback on the administrative aspects of the measure's implementation.

Taxpayer readiness is a key consideration, with the ATO encouraging taxpayers to be ready for the implementation of the measure. The developing compliance approach is focused on supporting taxpayers through education and targeted communications to get the basics right in the lead up to the first lodgment period.

Post meeting update: Australian primary legislation received Royal Assent on 10 December 2024.

Client-to-agent linking

The ATO presented the findings of the post-implementation review of client-to-agent linking for Australian business number (ABN) entities, excluding sole-traders, deployed on 13 November 2023. The new process has protected 4.7 million entities for 12 months and has achieved its intended outcome, with a range of learnings that will inform the next phase of delivery.

The ATO provided an update on feedback, outcomes, and actions taken since deployment. Feedback has been gathered from a range of sources and stakeholders. ATO guidance on client-to-agent linking has recently been updated to make the information easier for agents to find. See, How to nominate your registered agent.

The group discussed next steps for client-to-agent linking for individuals and the ATO advised members that consultation on the design will commence in early 2025.

Member comments

Members discussed groups that have trouble with the linking process. The ATO acknowledged some groups are experiencing technical issues. The ATO is investigating how these groups can be brought into the system.

Members suggested communications need to be clear and highlight that there have been no fraud instances since client-to-agent linking was introduced.

Members highlighted that there are still issues that need to be addressed. The time agents spend onboarding through client-to-agent linking has increased significantly and is increasing costs, particularly for smaller agents.

Increase trust and confidence in the tax, super and registry systems

Debts on hold

The ATO may place tax debts on hold where it is determined it is not economic to continue active debt recovery action. While the ATO pauses action to collect these debts, they remain legally due and payable and can be taken off hold if taxpayer circumstances change.

Historically, the ATO removed debts on hold from total account balances using a credit transaction. The ATO intends to include debts on hold on taxpayers’ ATO online services account and statement of account. This will ensure taxpayers have visibility of the taxes they owe.

The ATO gave an update on the program of work to make debts on hold visible. This includes system changes, communications to impacted taxpayers and internal change management to ensure staff are ready to support taxpayers and agents if they contact the ATO.

The ATO sought member feedback on how the ATO can support the tax practitioner community in preparation for this change, including how the ATO can help tax practitioners to support clients as the debts are made visible.

Member comments

Members asked questions about GIC remissions on debts that have been placed on hold, applications for payment plans and how these will work when a taxpayer has a debt on hold. The ATO intends to contact taxpayers with active payment plans, as they will otherwise default as debts on hold are made visible.

Members asked the ATO to engage with banks and lenders, as a taxpayer with ATO debt may be impacted when seeking a bank loan or credit offers. The ATO acknowledged members’ concerns and advised this will be taken into consideration.

Tax practitioner engagement approach

The group discussed the ATO's tax practitioner engagement approach which aims to help drive purposeful and effective engagement and support for tax practitioners. The engagement approach centres around four purposes:

• inform
• consult
• collaborate
• support.

Members confirmed the high-level strategic priorities, which will help to inform, shape and guide engagements between the ATO and tax practitioners during 2025. These are:

• Protect the high levels of engagement and integrity in the tax and super systems.
• Safeguard the security of the tax and super systems.
• Improve tax performance for clients of tax practitioners.
• Increase trust and confidence in the administration of the tax and super systems.
• Recognise, empower, and support current and future tax practitioners.
• Improve small business performance and level the playing field.

The approach and priorities are the product of consultation with, and valued input from, tax practitioners and professional associations, and are anticipated to developed further over time.

The ATO’s tax practitioner engagement approach has been published, see Engaging with tax practitioners.

Member comments

Members highlighted key environmental and industry factors impacting the profession and noted the engagement priorities need to help guide design on any new initiatives.

It was agreed the tax practitioner engagement approach and strategic priority themes will continue to evolve and will be discussed regularly at Tax Practitioner Stewardship Group meetings.

Law reform update

The Tax Practitioners Board (TPB) updated members on the consultation process as the TPB drafts guidance to support the new Code Determination (Determination). The TPB has held a number of roundtable meetings with professional associations and consumer groups in addition to the 4-week public consultation period. The guidance has generally been well received, with enhancements being made based on feedback, including:

• more detailed case studies, including those focused on smaller tax practitioners and BAS agents
• ensuring consistency in the guidance with other obligations, such as breach reporting
• in relation to false or misleading statements (section 15 of the Determination), clarifying the application of this obligation to engagements with client groups, multidisciplinary firms and what information a tax practitioner is required to provide if they need to notify the TPB or ATO.

Other reforms were discussed, including the disqualified entity requirements and the new whistleblower provisions.

Member comments

Members called for greater clarity on the definition between substantial harm and breach reporting. The TPB confirmed that the guidance products will provide clarity on this.

Members asked that case studies include examples representative of different practice sizes. The TPB welcomed stakeholder feedback and reconfirmed its commitment to provide these additional case studies over time, noting that for smaller practitioners, the new requirements commence from 1 July 2025.

Members queried whether an agent making critical comments about the tax system would result in a breach of the Determination. The TPB confirmed that a tax practitioner will not be in breach of the obligation to uphold and promote the ethical standards of the tax profession (section 10 of the Determination) where they provide considered and professional feedback or submissions, which may include criticism on the content of public consultation documents or proposed government policies.

Payday Super

On 18 September 2024, the government announced Payday superannuation design details to ensure super is paid on timeExternal Link. From 1 July 2026:

• SG contributions will be aligned with the payment of salary and wages.
• Businesses will become liable for the updated SG charge if SG contributions are not received by their employees’ super fund within seven days of payday.
• The Small Business Superannuation Clearing House (SBSCH) will be retired as it is no longer fit-for-purpose in a payday regime.
• The ATO will update infrastructure and data matching to better detect unpaid super payments earlier and allow for a proactive approach to compliance, to reduce the incidence of unpaid super. This will include updating Single Touch Payroll reporting requirements to make the reporting of both ordinary time earnings (OTE) and total superannuation liability mandatory.

The ATO will also work with industry to update the SuperStream standard, including allowing the acceptance of payments made via the New Payments Platform.

The SBSCH will close from 1 July 2026 and users will need to transition to new clearing house services for any contributions made on or after 1 July 2026.

The Payday Super Working Group has been established to provide overarching advice on the end-to-end administrative solution for Payday Super. For information about the working group, including key messages, see Payday Super Working Group.

The Payday Super measure is not yet law and the government is preparing draft legislation which will be released for public consultation.

Member comments

Members raised concerns about the administrative uplift and the potential for it to create more issues for agents to object to. They also discussed concerns for those using commercial clearing houses, as processing times may result in employers being penalised for late payments which may be out of their control. The ATO confirmed that payment is considered received when it is received in the super fund's holding account. Members also raised the need for greater visibility for the BAS agent community given their role with payroll processing.

Improve small business performance and level the playing field

Small business focus areas

The ATO supports small business taxpayers to meet their obligations. Resources are focused resources where there is the greatest impact and preventative outcomes to protect the community from those who don’t meet their obligations or seek to undermine the integrity of the tax and superannuation systems.

The ATO is evolving engagement, prevention, right time intervention, and correction activities to shift and influence behaviours and keep small businesses on track. This includes increasing transparency on areas of focus to help small businesses and their advisers get it right from the start.

External partners, including the tax and bookkeeping community, government, industry, business, and professional bodies, play an important role as stewards in the tax and superannuation systems to support small businesses to meet their obligations.

Information to support small businesses is available at Essentials to strengthen your small businessExternal Link and What attracts our attention in small business. The ATO encouraged the group to share these resources with their members and clients.

Member comments

Members support the ATO’s approach to be clear and transparent in helping small businesses to get things right. This includes continuing to use messages that will resonate with small businesses and their advisers.

Members provided their views on the upcoming initiative to use the Commissioner of Taxation’s discretion to change the activity statement reporting cycle for small businesses with a history of non-compliance. This may increase costs to businesses and may not support them to get back on track. The ATO confirmed the impacts of the initiative, including any unintended behavioural consequences, will be closely monitored and evaluated.

Members suggested the ATO could develop a new to business approach where new small businesses are encouraged to begin with monthly reporting. The ATO noted this is currently being considered.

Environmental scan

Members led the environmental scan discussion, covering a range of issues including:

• inconsistency in outcomes for GIC remission requests
• payment plan arrangements
• phone wait times and delays in Frontline Operations
• consistency of operative responses
• the need for communication products to address the cessation of the instant asset write-off legislation.

Attendees

Guest attendees

Apologies list