A trial was conducted by the ATO in 2013 & 2017 in using external collection agencies for lodgement obligations but the focus at that time was for self-preparers. Apparently, the pilot did not have adverse impact on the ATO’s reputation, no complaints received and had helped to increase in clients engaging the assistance of intermediaries with lodgement.
The pilot demonstrated that using external collection agencies is viable, efficient and an effective option to complement ATO strategies.
ATO is looking to expand to clients who use the services of registered agents in meeting their lodgement obligations such as BAS. ATO intend to encourage clients to visit and consult their agents to help them keep their lodgement obligations up to date. The target is for the late lodgers who have few outstanding lodgements with the aim to stop clients from being behind on the deadlines.
The project will leverage off an existing process wherein a debt has a place in relation to external collection agencies. Any feedback or irritants that are raised from existing process are taken into consideration by the ATO. The ATO considers members views and opinions to ensure that the ATO takes into account members recommendations. Also, a consultation with the Tax Practitioner Stewardship Group was held as they provide valuable feedback.
The ATO outlined to members a draft infographic detailing the process that they will follow should a client have an overdue lodgement. The ATO intends to get feedback from members on the content of how this process is presented. The ATO is working with ATO corporate communications team to have this infographic made available at the ATO website, ato.gov.au. This makes ATO’s lodgement action infographic available to tax practitioners that allows them to have a targeted conversation with their clients and so they can use it internally within their practice to help them understand the lodgement process.
Following are just some of the Members comments and suggestions:
- Ensure that external collection agencies will not be involved until the agents extended lodgement due date had passed
- External collection agencies method can be demanding rather than a gentler early intervention style.
- External collection agencies should only play the role if the client is extremely delinquent with their lodgements
- Currently, there is too much information on infographic and may not be a useful tool for a discussion with the client as it may be overwhelming because some of the information on the infographic is only relevant to practitioners. However, from a practitioner’s perspective, this can be very useful as it shows at a glance what stage of compliance action the ATO is taking with a client.
- Not to publicise the figures of what percentage of clients that are not lodging on time. (NB: these are readily available in the ATO‘s annual report if required)
- Using external collection agencies contacting tax practitioners/or clients regarding outstanding lodgements and any associated debt is not practical or beneficial according to some members.
- External collection agencies need to be used at a later stage in the compliance process for lodgement and at an earlier intervention stage for outstanding debt
The tax practitioners will be contacted by ATO through an email or letter to advise their client has outstanding lodgements. Their client will be referred to an external collection agency for further compliance action should they fail to lodge outstanding obligations. The ATO is expecting the client to contact their tax practitioner who will in turn work with the ATO and facilitate lodgements which will stop any further compliance action from being necessary.
An indicative timeline could be added to the infographic as a tool to use in discussions with their clients as suggested by the members. Tax practitioners could then advise their clients in 30 days or 60 days the next action that will be taken by the ATO in relation to outstanding lodgements.
Source: Australian Taxation Office