The Tax Commissioner, Chris Jordan, spoke at the annual National Small Business Summit a few weeks ago, fulfilling a commitment to return a year before.
In between these engagements, Jordan’s staff were out and about across the country consulting thousands of small businesses owners, getting feedback and input from each one about the Tax Office’s directions, products and services.
The small business sector responded with “some pretty clear messages”, Jordan said (read his entire speech here). But he said there were four main areas of concern:
Fix the basics and make it easy — “You are sick of trying to find the right information on our website to answer a question, looking at dense and out-of-date documents,” Jordan said, and related a story of a friend who was after pointers on website development deductions. “For such a commonly occurring event, we had no easily accessible information available for the majority of people to use.”It needs to understand small business’s circumstances, and tailor services and interactions — “Why aren’t we using the information we have to better target who gets what services and attention, to make something that really works for you, freeing you up to get on with business?”Help with complexity — the Commissioner agreed that the tax system was complex, but that did not mean it can’t be made simpler. “We need to help you with the right tools and information when you need them in a way that suits you,” he said, “and we need to be working across government so your services are integrated and simplified.”Administer the system fairly — “You want to know we are targeting our activities appropriately and effectively so that everyone is paying the right amount and that there is a level playing field,” Jordan said. “This is essential to trust and confidence in the ATO and the system”
On this last point, a recent Inspector-General of Taxation’s report into tax debt collection zeros in on some salient facts regarding Tax Office dealings with small business. The IGT’s report showed that of all outstanding business tax debt, about 75% was from businesses with turnover of between zero and $500,000 — that is, micro small businesses, well below the small business threshold.
Our members have similar experiences.
Matt Swanson runs the ICT consulting firm Semvac Pty Ltd in the Northern Territory, just across the bay from Darwin, and recently became a member of Taxpayers Australia. Matt agrees that the Tax Office needs to lift its game in some areas when it is dealing with small businesses, with his biggest issue in recent times being centred on communications. “I found that keeping track of when things are due was an issue,” Matt says, “and I went for several years running around in circles. I even got a penalty, although they did waive that when I explained.”
Matt says he has recently found out about downloading calendar reminders, but feels the Tax Office could have been more pro-active in letting businesses know about such services. He contends that while these sort of things may seem minor, they are actually very useful for busy taxpayers. “If my BAS is due then tell me my IAS is due too,” he says.
Another recently joined Taxpayers Australia member is Kelly McCoy, CFO at Northern Transportables, which supplies portable building solutions to South Australia, Western Australia and the Northern Territory. She is also CFO to another medium sized business and three smaller businesses, as well as running a unit trust and a family trust.
The issue of clear communication also figures largely in Kelly’s experiences in dealing with the Tax Office. “They need to break down the minefield of complex jargon,” she says, “and give small businesses information through hands-on practical solutions that are easily understood.”
Kelly cites a recent seminar she attended on SuperStream implementation for small business that was attended by two Tax Office representatives as well as superannuation professionals and large fund representatives. “As a member of Taxpayers Australia, I have had access to resources and information on SuperStream and have implemented this through four payroll systems so far. At this seminar, the questions being asked came from mums and dads and business owners who did not have the accounting backgrounds required to understand an unexplained answer,” Kelly says.
“The two Tax Office reps did not answer one question completely, they did not explain how to achieve outcomes based on what they were telling people had to be implemented, nor could they give practical examples to explain how things worked,” she says. There were also no visual examples of payroll software nor of the Tax Office’s Clearing House, or an explanation of how to navigate through these systems.
“After implementing the system numerous times, it was extremely frustrating (for me) to know the answers to most of the questions that were asked, only to hear such poorly portrayed responses.”
Kelly says she is sure many in the audience walked away confused and worried about a process that she knows from experience is actually quite simple, and that they were most likely left not knowing where to start or who to turn to for assistance.
She says that while staff at the Tax Office have had some formal training, the point is that a lot of small business owners have not — or that their learning has been through jumping in at the deep end. “When there is a reliance for these businesses to adhere to a system, there needs to be a simplified, well-informed step-by-step guide,” she says. “Get back to basics and stop trying to tell these people how well educated the speakers are, and guide people through with a genuine helping hand.”
Another imperative fix she identifies is the Tax Office portal itself. “It has to be easier for users to access while still maintaining the security required for a government system,” she says. “It still cannot handle the influx of information that is sent through when everyone is trying to lodge information at the same time.”
Remember if you have any issues that relate to any aspect of tax and super including admin and ATO issues – we are only a helpline call away!
# [tax failures], [Tax Office], [tax system improvement], [unfair]
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