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Accountants to the rescue during COVID-19
29 May 2020
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3 minute read
While frontline health professionals have been saving the lives and health of Australians during the COVID-19 disruptions, accountants have been working flat out to save the businesses and livelihoods of their clients.
Major Government stimulus packages such as JobKeeper and the business cash flow boost payments have been critical in keeping many businesses operating, and these business owners have relied heavily on their accountants to understand the programs and lodge applications on their behalf.
For many accountants, this has created a major stream of new work, with new rules, conditions and eligibility requirements, and for some it has escalated their levels of stress.
“This has been a torrid time for many in the accounting profession and many are struggling with a tsunami of work which just came out of the blue,” says Paul Drum, General Manager of External Affairs at CPA Australia.
“The reality is that many of the changes we have seen were foisted on accountants, and there have been consequences as they have come to terms with the new programs and also had to manage what were in many cases urgent client expectations.”
Not only have accountants been dealing with regular and quarterly BAS lodgments, 2019 income tax returns, self-managed superannuation fund administration and working with clients in the run-up to the end of the financial year, but clients have relied on their accountants to urgently apply for the new programs which are administered through the tax system.
“A lot of people would have missed out on the stimulus packages without the help of their accountant,” says Elinor Kasapidis, CPA Australia’s Tax Policy Adviser.
In addition to the quarterly lodgment of activity statements, accountants are now having to report monthly under the JobKeeper program for their clients and in many cases also for themselves.
As the economy has contracted and business cash flow has become critical, many clients have had trouble paying their invoices and this was impacting on revenues for accountants, while adding to their workload.
“Many accountants are also on JobKeeper and they are also working very long hours,” said Elinor Kasapidis.
“Some of this extra work is included in retainer arrangements with clients, but there is also pro bono work and reduced fees, because accountants are understanding that some clients just can’t pay invoices.”
While CPA Australia was not involved in the original design of the fiscal programs, it has recently been consulted by the Australian Taxation Office on the issue of lodgment and penalties.
The ATO did not adopt CPA Australia’s recommendations for longer deferrals, but Kasapidis welcomed the ATO decision to not apply late lodgment penalties for returns due in May and June if they were lodged by June 30.
The ATO has urged accountants and clients feeling “overwhelmed” by lodgment pressures to make contact.
“While the general interest charge will still be applicable, you can apply for remissions and we will take a reasonable approach in assessing your request,” ATO Deputy Commissioner Hoa Wood said in a statement on May 25.
Wood said the ATO recognised and appreciated the work of accountants to support their clients, and that “there have been additional pressures on the tax profession” during the COVID-19 crisis.
At CPA Australia, Paul Drum said he believed it was an “oversight” by the government and relevant agencies to introduce the new measures without discussing their design and implementation with the accountancy profession.
“There was just an expectation that accountants would manage all this, so I think it needed to be thought through a big better,” he said.
Many small businesses, he said, had gone ahead and lodged documents without the input of their accountants, often because they were in arrears with their accountancy fees.
This is likely to have resulted in a higher percentage of errors and inadmissible applications and ultimately more work both for the ATO and accountants.
So while accountants have been critical to helping their clients survive financially, it was inevitable that this increased pressure would take a toll on the mental health of some in the profession. Drum said CPA Australia’s message to these accountants is that “it is ok to not be ok” and that there are support resources available.
CPA Australia is offering a 90 minute webinar recording titled Mental Health at Work, which focuses on helping accountants recognise and support their clients, co-workers and staff who are experiencing mental health issues, in addition to looking after their own mental wellbeing.
There are also COVID-19 resource materials and a Mental Health Toolkit available to assist accountants on the CPA Australia website.
