The Board of Taxation is a non-statutory advisory body charged with contributing a business and broader community perspective to improving the design of taxation laws and their operation.
Ideas for better tax regulation
Super contribution info availability for tax agents
Currently there seems to be no way for tax agents to access taxpayer superannuation contribution details that the ATO holds. The ATO applies this info in assessing Div293 tax but the tax agent cannot accurately estimate for a client what the Div293 liability will be because tax agents cannot access the info that the ATO holds about contributions made on behalf of a taxpayer for a financial year. The tax agent can guess that there will be a Div293 liability based on income details in the tax return and reportable contributions on the payment summary and can estimate how much was paid in SG contributions. But due to timing diffs between when employers pay contributions and when those contributions are allocated to the employee's account by the fund, such calcs can only be a guess in the absence of the super contributions that the ATO holds. Could the ATO provide agents with this info, whether by way of a downloadable report or by way of lookup on the Portal?
Reinstate an STS Cash Accounting Method
Small Business Entities should be allowed to account for income on a cash basis once again. Prior to the 30 June 2005 financial year, the STS Cash accounting requirement was a feature of the Simplified Tax System that allowed Small Business Entities to account for income and expenses on a cash basis. However prior to the 30 June 2007 financial year, entities that elected to utilise the STS were required to use ALL of the components of the system. This meant that entities that prepared their accounts based on the accruals method faced compliance costs in converting back to a cash basis if they were to use the STS rules. It was believed this cash accounting requirement was the reason for the low take‐up rate for STS prior to 30 June 2005. The solution to the problem was to remove the STS Cash Accounting requirement entirely for 1 July 2005 onwards. However this change meant that those entities that do not track debtors and creditors were then disadvantaged, especially those who also use the GST Cash accounting method that is still an option. There is also the continuing complexity from the transitional rule that allows entities that were using the STS Cash rules at 30 June 2005 to continue to use those rules so long as they have met the requirements continuously since then. This transitional provision requires an analysis of a taxpayer’s affairs over an 11 year period (and counting). This is especially difficult for taxpayers who have changed accountants, and for accountants who have entered the profession since 2005. I would argue that the 2005 removal of the STS Cash Accounting requirement would not have been required given the later 2007 changes that made the separate components of the SBE system optional. Allowing a choice to use a Cash Accounting method for income tax purposes for those Small Business taxpayers who do not track debtors or creditors (and use the GST Cash accounting method) would have obvious compliance cost benefits, especially for micro business. The cost to revenue should be negligible (especially over time). The former STS cash rules would be an appropriate template for reinstatement, however better alignment with the GST accounting rules may be an improvement.
Would it be possible to enter Payment Summary information through the ATO Business Portal/Tax Agent Portal and then being able to print payment summaries as pdf files (ideally with immediate email to employee functionality). Currently micro businesses are completing paper copies. These forms are getting more elusive to access. Most micro businesses do not have payroll functions included in their accounting software. Where tax agents are requested to assist with completion of payment summaries, it would be helpful for all parties if the information could be electronically entered.
Meetings & events
- 8 Dec 2016 - Board of Taxation Meeting in Melbourne
- 11 Nov 2016 - Board of Taxation Meeting in Canberra
- 11 Oct 2016 - Board of Taxation Meeting in Perth