Friday, 11 July 2014

Proposed changes to ATO IT systems

As the winds of change continue to blow through the ATO, the Institute is closely monitoring two new ATO initiatives. The two initiatives are its technology transformation project discussed at the decent Drivers for Change Conference and Project DO IT.

Drivers for change – new business tax return and reporting requirements

The first project is particularly important for any practitioner who lodges tax returns for businesses. It involves the end of the current electronic lodgement service (ELS) arrangements and will require practitioners to ensure that their clients’ charts of accounts comply with a standard format. The ATO explained the proposed changes at its National Tax Practitioner Drivers for Change Conference held on 17-18 June 2014 in Sydney, which our tax policy team attended. The conference focused on what might change in the next decade for tax practitioners, having regard to rapid technological advances and globalisation. A key initiative the ATO discussed at the conference was the transformation from ELS to standard business report (SBR).

SBR
The SBR concept has been around for some time. It is designed to provide a single system for businesses to input information for use government-wide, but my impression is that to date businesses have been slow to adopt the changes required to implement SBR. The government participants include the ATO, APRA, ASIC, the Australian Treasury, the Australian Bureau of Statistics and the eight state and territory revenue offices. Under SBR, Australian businesses are able to use SBR-enabled software to prepare and lodge key government forms directly from their software to the agencies participating in the SBR program. Businesses use a single secure log on, AUSkey, when sending reports to agencies via SBR (see further www.sbr.gov.au).
One of the beneficial outcomes of SBR is that it will allow the ATO to prepopulate business tax returns.
The critical date for practitioners who use ELS is 1 July 2016, after which no new forms will be available through ELS. The ELS system will be phased out altogether shortly afterwards. The ATO called on tax practitioners to begin liaising with their software developers as soon as possible to exercise some influence over the software products that will be available to them to process lodgements through SBR.
Unlike ELS, SBR is an internet-based system. A key emerging issue with respect to SBR is — what services will be offered to tax agents through the tax agent portal and what will be offered through SBR? We receive a great deal of member feedback regarding the portal. It is clear that our members have a love/hate relationship with the portal as it is both indispensable and at times unreliable. Only time will tell if SBR and the portal can coexist harmoniously and allow our practices to operate more efficiently. Past experience tells me that any new project requiring the ATO to change its IT systems can cause major disruptions to lodgements.
The potential for disruption is still greater in this case because the project requires practitioners and their clients to make IT system changes that are compatible with the ATO’s systems. Be assured The Tax Institute will be at the forefront to represent our members’ interests as this transition gathers momentum.


Michael Flynn CTA is President of the National Council at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.