Tax & Super Australia (TSA) members have identified a significant problem caused by a recent decision of the ATO to change paper-based activity statements to digital delivery from the month of November 2020. This change in technology is causing problems for tax agents and their clients.
TSA’s Tax Counsel John Jeffreys says the ATO is aware of the issues being created for tax agents and is conducting investigations into what has happened.
The key problem for most tax agents is those clients who either do not have a myGov account or have turned off their notifications in their myGov account. As the instalment notice is not arriving at the office of the tax agent, it is only the notification through myGov that alerts a client to an activity statement being issued. However, in some cases it seems that clients are not receiving the ATO-created notifications in their myGov accounts.
Also, demand-for-payment letters are starting to issue from the ATO in relation to non-payment of the November 2020 instalment. This is due to the client being unaware that an activity statement was due and payable.
Reports can be run from Online Services for Agents to assist with knowing which clients have had activity statements issued to them. However it has been anecdotally reported that sometimes these reports are not comprehensive for all clients. Further, these reports do not say whether the client has a myGov account linked to their ATO account, so there is no way of concluding whether the client should have received the notification from the ATO about the issuance of an activity statement.
In the past, some practitioners have directed all activity statements to come to them. The tax agent then checks that the instalment form is correct and sends the form to their client with instructions as to how to complete the form and how to pay the required tax. Some tax agents and clients prefer this style of service because it keeps the tax agent informed of what is happening with their client and the client receives reviewed communication from the ATO with clear instructions as to what to do with the communication.
Under the current arrangements, where the contact details have been changed to the client’s myGov account by the ATO, it will be necessary for such practices, if they want to continue with this style of servicing their clients, to get authorisation from each client (if not held already) to have their address for service of notices changed back to the tax agent and then the tax agent will need to go through the process of making those changes.
This ATO system change is an imposition on tax agents and their clients, and may create work for tax agents, most of which you will probably not be able to bill.