Accountants have heard a lot from the Australian Taxation Office about its big-picture goals to digitise its processes and overhaul the way it collects tax.
The scale of this enormous exercise has clearly worried a lot of accountants – but what are the immediate projects and what will their effects be?
The date in everyone’s dairies should be June 30 2016. It should mark the launch of the ATO’s three flagship projects, two of which are already underway and one has only just started.
ELS to SBR
The most important is the transition from the electronic lodgment service (ELS) to the standard business reporting (SBR) framework. While this migration will affect every accountant, bookkeeper and business owner who submits information electronically to the ATO, it will occur largely invisibly.
The project is largely in the hands of the ATO, which is upgrading its databases and data collection software to SBR, and the accounting software companies, which must upgrade their tax, practice management and business accounting software.
Come July 2016 – after the software companies have pushed out upgrades to all users – tax and BAS agents shouldn’t notice any difference in the way they lodge returns electronically. The ATO is in effect just changing the plumbing.
The next couple of years will be a different story, however. The SBR framework will give the ATO and software companies the ability to re-use information automatically, between forms and between government agencies, which should reduce the amount of paperwork and time taken to meet compliance.
The ATO plans to upgrade its temperamental portals for tax and BAS agents. The ATO is pursuing several options including building the portals into the MyGov and ATO Online websites.
Software companies have already started building basic functions of the existing portals into their practice management software.
Xero has plans to replicate all the functions of the ATO’s tax agent portal within its practice management software. This would include updating the list of clients, changing addresses and receiving notices of assessments.
“All the admin tasks I pay someone to do in three systems I can get them to do in one system.
All that should happen within your practice management software. At the moment it’s very disjointed,” Anthony Migliardi, product owner of tax at Xero, says. Reckon and MYOB have said they are also building features from the portals into their practice management software.
The existing ATO portals will probably continue in their existing form past July 2016 until all features have been replicated by other services.
Single Touch Payroll
This project was announced in December by the federal minister for small business Bruce Bilson, who committed the ATO to launching by July 2016.
The exact definition of Single-Touch Payroll is still under discussion. The most basic implementation will require businesses to report how much superannuation and income tax they owe every time they make payroll.
The most aggressive version will require businesses to not just report but pay their superannuation and income tax with every payroll.
If the ATO decides to tie super and income tax payments to payroll it will effectively bring forward payments to the ATO, with a corresponding impact on cashflow. It is unlikely that the ATO or the federal government will have the stomach to introduce this politically unpopular step.
Again, the software companies are in the firing line here with updates to their business accounting programs required.
These are exciting times to be an accountant and a bookkeeper; slightly nerve-wracking if you work for an accounting software company or in the ATO’s IT department! A huge amount of development is going on behind the scenes, the impact of which won’t be felt until second half of 2016.
To find out what else is on the ATO’s technology roadmap and the likely impact of these changes on the accounting profession, check out the latest Macpherson Report: An Analysis of the ATO’s Technology Roadmap.