Business audit risk could rise as a result of ATO's client-agent linking woes
ATO Faces Backlash Over Complex Client-Agent Linking System, Risking Taxpayer Boycott
Two recent articles shed light on the escalating issue surrounding the Australian Taxation Office's (ATO) revised client-agent linking system, with mounting tax debt and unfiled returns causing discontent among businesses.
Businesses Threaten Boycott Over Cumbersome Client-Agent Linking System
Angry businesses are considering boycotting tax returns until the ATO simplifies the cumbersome and antiquated client-agent linking system, warns the Institute of Certified Bookkeepers (ICB). The process, mandatory since November 13, has led a significant number of business owners to declare "no more tax" due to its complexity. Executive Director Matthew Addison highlights that the ATO has failed to grasp the extent of the issues faced by taxpayers and agents, particularly those less connected and computerized.
The multi-step process places the onus on clients to link their myGovID app to their ABN before nominating their agent on the ATO's "Online Services for Business" portal. Many businesses attempting the process independently have spent exorbitant time and encountered issues such as lacking a myGovID or updating ABNs on the Australian Business Register.
Tax agents have called the system an administrative "nightmare," with some reporting client-agent linking becoming too burdensome even for professionals. Addison suggests an overhaul of the system to a "consent model," where agents initiate the linking process, providing a better solution to security concerns.
ATO Defends Client Linking Regime Amidst Complaints
The ATO defends its revised client linking regime against a barrage of complaints from the tax profession, emphasizing that its staff are ready to assist those facing difficulties. The ATO claims that its online guidance is continually under review, and the system has been successfully navigated by 70,000 taxpayers since becoming mandatory in November.
Despite frustrations emerging on social media, the ATO urges tax agents to help businesses keep their Australian Business Register (ABR) information current, as outdated data could lead to problems with the Relationship Authorisation Manager critical to the linking process. The ATO acknowledges challenges with businesses not updating their ABR information promptly and encourages agents to support clients in maintaining up-to-date records.
The executive director of the ICB, Matthew Addison, reiterates the risk of a taxpayer boycott due to businesses giving up on the tax process. Addison accuses the ATO of being blind to the struggles of small businesses, especially those lacking tech literacy. The ATO explains that the client linking system is part of enhanced measures to secure personal information amid a rise in identity-related fraud and identity theft.
In conclusion, the ATO faces a growing disconnect with taxpayers, risking increased tax debt and non-lodged forms as businesses consider boycotting tax-related activities due to the complex client-agent linking system. The ATO defends its system, emphasizing support for those facing difficulties and highlighting the importance of updated ABR information. The ongoing debate underscores the need for a solution that balances security concerns with the practical challenges faced by businesses and tax professionals.