Friday, 11 November 2016

The rise of a tax star


In 2014, The Tax Institute’s Tax Adviser of the Year Awards recognised Matthew Andruchowycz as the Emerging Tax Star for that year.

At the time, Matthew was a Senior Associate at Wallmans Lawyers in Adelaide. According to the judges, he demonstrated an ability to work on complex matters at a level significantly beyond the level expected of a tax professional with fewer than five years’ experience.

Fast forward to today and Matthew is already an accomplished senior tax professional. As a Principal at DMAW Lawyers, he works with accountants, financial planners, bankers, business owners and high net worth individuals on a range of intricate taxation and superannuation matters.

He is also a sought-after tax author and speaker, and has been included in both the Australian Financial Review’s “Best Lawyers” list and Doyles Guide to the Australian legal profession as a leading tax lawyer.


Choosing tax as a career


The Tax Institute asked Matthew about the factors that initially led him to pursue a career in tax. He told us he had always been a “numbers person” and that, as a young member of Wallmans’ general commercial team, he had been fascinated by the work and attitude of the specialist tax lawyers.

“I thought they were impressive,” he said. “They just seemed very focused, hard-working and busy. They stayed a bit longer after hours. They always seemed to be flat-out, walking around the office a bit faster than everyone else.

“I was interested and wanted to get in on the action, even though at that time I didn’t fully appreciate what tax law actually was.”


The attractions and challenges of tax law


Matthew began working in tax in 2009 and moved to DMAW in July 2015. So far, he has enjoyed every day of his career.

“I think it’s what I was meant to do,” he said, “in the sense that I’m naturally inclined towards the more technical, numbers-based, analytical type of law.

“There’s also scope for hard work, which I enjoy. It’s a bigger, more complex area of the law than most others. So there’s an opportunity to distinguish yourself.”


The Emerging Tax Star award


Winning The Tax Institute’s Emerging Tax Star award in 2014 was an enjoyable experience for Matthew. In fact, he still considers it one of his career highlights.

“I received amazing encouragement on the night of the presentation and afterwards,” he said.

“I was completely surprised when they announced I was the winner. I had spoken with the other finalists and dismissed the idea that I could win, because they were from serious firms in Melbourne and Sydney and seemed so switched-on.

“Receiving the award made me feel very positive about my chosen career and the idea that I would likely choose to keep doing it for 30 more years.”

The award has also helped to boost Matthew’s professional reputation over the two and a half years since.

“A couple of times I’ve overheard business referrers talking to their clients about the award,” he said.

“I’ve actually heard them say ‘That's Matt, he won The Tax Institute’s Emerging Tax Star Award’. They’re using it as part of their sales pitch on my behalf. It’s happened a few times.”


Advice for entry-level tax practitioners


Matthew doesn’t hesitate to recommend tax as worthwhile career choice for someone who has the right qualities.

“I love my work,” he said. “For me, tax law is a brilliant profession because it’s so challenging. If you’re the kind of person who enjoys work, wants to excel in a particular area, and likes taking on the hard tasks that other people are often not willing to do, tax can be rewarding.

“It requires many different disciplines and skills — including technical, creative, communication and investigative skills — and I couldn’t recommend it more highly.

“The only caveat is that, to get the most out of it, you have to love it and you’ll probably have to work at least 10% harder than the next person.”

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Winners of the 2017 Tax Adviser of the Year Awards will be announced at the 32nd National Convention in Adelaide on 16 March 2017. Find out more about the awards at taxinstitute.com.au/leadership/tax-adviser-of-the-year-awards.

Friday, 4 November 2016

Tax and small business - there's work to be done

by Noel Rowland *


On 10 October in Canberra, the Australian Chamber of Commerce and Industry Business Leaders Summit featured a panel session on small business. It included input from the Minister for Revenue and Financial Services, the Hon. Kelly O’Dwyer, MP, and the Shadow Assistant Treasurer, the Hon. Dr Andrew Leigh, MP, who acknowledged that small business represents the engine room of the Australian economy and that the tax system has a significant impact on small business.

So where are we at with reforms to the tax system that support small business?

Two reports help to answer this:

  • the Australian Government’s Re:think tax discussion paper; and
  • the Board of Taxation’s Review of tax impediments facing small business.

The government’s discussion paper was issued in March 2015 and influenced the tax measures targeted at small business included in the last federal Budget.

The Board of Taxation’s 2014 review, although preceding the above report, highlighted the fact that a lot of work needed to be done in the area.


Re:think tax discussion paper


Chapter 6 of the government’s Re:think tax discussion paper identified the characteristics of the tax system that impact small businesses, and the challenges small businesses face in terms of the complexity of the tax system.

It explained that “small businesses are numerous, diverse and make an important contribution to the Australian economy”. They adopt “different legal and management structures, and may be driven by different preferences and profit motives than larger businesses”.

Small businesses are disproportionately burdened by a complex tax system, especially where “features of the system encourage them to adopt particular legal structures that are costly to establish and maintain”. While tax law provides concessions that may benefit small businesses, they “may add to the complexity and compliance burden”.


Review of tax impediments facing small business


The Review of tax impediments facing small business was a report that the Board of Taxation submitted to the government in August 2014 and released in early 2015.

Many of the points made in the report are echoed in the Re:think tax discussion paper in terms of describing the importance of small businesses in the economy and the complexities of tax legislation and compliance matters.

It noted that frequent change (ie incremental reform) is often seen as a contributing factor to the compliance burden facing small businesses. It therefore “identified and recommended key reform priorities that aim to reduce tax impediments facing small business”.

A key recommendation was for a further, more detailed review of tax impediments facing small business.

Although the last two federal Budgets contained a few welcome measures to benefit small businesses (eg a reduction in the corporate tax rate and the changes to accelerated depreciation), it appears that comprehensive reform is not on the agenda.


Aligning law and guidance


The Board of Taxation review also suggested that small businesses face considerable compliance and complexity issues in terms of their administrative relationship with the ATO.

One positive step has been the timely development of ATO public guidance.

Previously, a delay would typically occur between the issuing of tax legislation and the corresponding ATO guidance.

Guidance material released at the same time the law is introduced is a great initiative — especially for small business advisers who can immediately see both the law and how the ATO will interpret it.


Digital by default – single touch payroll


The Institute supports initiatives that may reduce red tape for businesses. We do, however, have concerns that implementing some digital initiatives, such as single touch payroll, will increase rather than decrease the compliance burden on small businesses.

The Institute argues that such initiatives should be optional for small businesses until the government clearly expresses the benefit to them.

The possible benefit of single touch payroll to small businesses will be tested in a pilot soon to be run by the ATO.


Division 7A tax rules


One issue that preoccupies small business tax advisers is the complexity of Div 7A of the Income Tax Assessment Act 1936 (Cth).

The last Budget included a measure to improve the administration of Div 7A that will come into effect at the beginning of the 2018-19 income year. We are yet to see the extent to which this measure will simplify processes for small businesses.

The Budget announcement of “targeted amendments to Division 7A” offers a glimmer of hope for some change, hopefully constructive, on these rules. We cannot be sure until the consultation process begins, as the announcement does not contain much detail.

So, back to the earlier suggestion — while there’s some progress, there is much more to be done.

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* Noel Rowland is Chief Executive Officer of The Tax Institute.


Wednesday, 2 November 2016

The Tax Institute comments on the ATO's public advice and guidance


The Tax Institute’s Tax Counsel, Stephanie Caredes, recently participated in an ATO panel discussion with three other tax experts. The moderator was Channel 7’s David Koch.

The discussion centred on how the Tax Office is partnering with industry to improve the experience of tax payers and tax professionals through better public advice and guidance.

Alongside Stephanie, the panel included the ATO’s Deputy Chief Tax Counsel, Will Day, the Corporate Tax Association’s Executive Director, Michelle De Niese, and Prolegis Lawyers’ Consultant, John King.

The discussion covered a range of specific issues around the main theme, including measures to improve public advice and guidance services, the provision of public advice and guidance on changing legislation, and the new law companion and practical compliance guidelines.

The panel also answered a number of public advice and guidance questions.

You can see a video of the discussion, produced by Pinstripe Media, on the ATO’s YouTube channel.