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Accounting associations have welcomed the changes but stress that much more must be done to address key issues in the system.
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ATO updates client-agent linking system to prevent ‘inadvertent errors’
19 April 2024
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The ATO has announced that a number of updates will be made in relation to the client-agent linking process after tax agents and accounting associations raised significant concerns about the system.
The Tax Office has improved its in-system guidance in order to reduce the number of inadvertent errors occurring during the linking process.
“We’ve been listening to your feedback about the client-to-agent linking process and we’ve made some updates to Online services for agents that will be available after 20 April 2024,” the ATO said in a recent statement.
“Improved in-system guidance will help you link to the correct account once a client has nominated you as their agent.”
The ATO said the updates in the system will assist tax agents to link their client at the correct account level.
It will also alert tax professionals when they are about to remove another agent and prompt them to ensure you have your client’s authority to do so.
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“The in-system guidance will prompt you to confirm the account level you are linking at. For example, if you are authorised to access the income tax account, you must use your client’s business TFN to link at that level,” the Tax Office said.
“If you try to link using your client’s ABN, you will be prompted to confirm that you do not require access to the income tax account. If you proceed and later require access to the income tax account, your client will need to create a new agent nomination.”
The ATO said the in-system guidance will also reduce the risk of removing an existing agent who has been authorised by the client to represent them for an activity statement account.
“If an existing agent link is overridden in error, this can only be fixed by your client creating another agent nomination to reinstate the agent’s access,” it said.
“These inadvertent errors could cause inconvenience to both you and your clients and we hope these changes go some way to minimising the risk.”
ATO must address wider issues relating to client-agent linking
Chartered Accountants ANZ senior tax advocate Susan Franks said while the improvements announced by the ATO are welcomed by CA ANZ, they will not resolve some of the other key issues impacting tax agents.
“CA ANZ members are spending a substantial amount of time helping existing and new clients to navigate the client agent linking (CAL) process,” said Franks.
Franks said while the announced changes by the ATO will improve one of the last steps, the ability of a tax agent to link to a client, it does not address the main issues that tax agents face.
“These issues include helping people navigate myGovID, business services online and the Australian Business Register (ABR). Nor does it address the lack of notification to the tax agent that a client has nominated them,” she said.
CA ANZ members are calling for the ATO to help people verify their identity and guide them through the CAL process by providing simpler, clearer messaging, a dedicated ATO call centre with more staff and better training, and the ability to organise a convenient time to call if the call cannot be immediately taken.
Members would also like to see automatic notification to tax agents when a client link needs authorisation, improved technology infrastructure to enhance the system's reliability and the creation of a bulk application process for when a partner changes firms.
“Until these changes are made, CAL will continue to frustrate clients and add unnecessary and irrecoverable administrative work upon tax agents,” said Franks.
The Tax Institute similarly agreed that while the improvements will help to reduce the incidence of BAS agents being inadvertently kicked off the activity statement account, there area other areas where concerns remain.
The Tax Institute senior advocate Robyn Jacobson said association welcomed the improvements that will nudge the practitioner and prompt them to confirm the account level they are seeking to link.
“Using an ABN to link will provide access only to the client’s activity statement account whereas using a TFN to link will allow access to the income tax account and the activity statement account,” she said.
“Importantly, linking dislodges any existing link, so tax agents who incorrectly use the ABN to link a client will dislodge an existing BAS agent who will need to relink with the client.
“These improvements to account selection should reduce confusion among practitioners, reduce the incidence of tax agents inadvertently kicking BAS agents off the activity statement account and make the process more efficient.”
However, Jacobson said these improvements relate only to account selection and valid concerns remain in a range of other areas including:
- The use of myGovID for those clients who are not digitally engaged.
- The current need for an Australian passport to obtain a Strong myGovID.
- Outdated data on the Australian Business Register — clients should be encouraged to review and update their details where necessary on the ABR. Consistency of data across the ABR and the Relationship Access Manager (RAM) makes the linking process smoother.
- Time spent on the phone to the ATO to manually resolve problems for those who are having difficulty linking.
- The need to ask the ATO to manually link an SMSF or a trust that has a corporate trustee, as this still cannot be done through RAM.
- Loss of clients and inability to take on new clients who are struggling with linking.
“While security of data remains paramount, it is unfortunate that an administrative process is creating barriers for taxpayers who are seeking to engage and appoint agents to assist them in meeting their tax obligations,” said Jacobson.
She said it was pleasing to see the ATO engage in further consultation to seek feedback on the experience of practitioners using client-agent linking.
“The Tax Institute, and other professional associations, have engaged in extensive, confidential consultation with the ATO from the outset. We accept that our suggestions and recommendations cannot always be accepted by the ATO in designing administrative solutions,” she said.
“We also acknowledge that the ATO has implemented CAL in the interests of protecting client information and strengthening the system from criminal fraud activity.”
The Institute of Public Accountants has also welcomed the changes, stating that they will reduce the risk of inadvertently removing pre-existing arrangements with other tax practitioners such as BAS agents.
“This has been a frustration issue for BAS agents since client-agent linking was introduced, [with BAS agents] having to go through the new nomination process unnecessarily,” said IPA general manager, technical policy, Tony Greco.
The ATO said while tax agents wait for the in-system guidance to be deployed in Online services for agents, they can refer to guidance material on ato.gov.au/agentchecklist.
“We’re committed to using your feedback and working with the professional associations to understand your experiences with client-to-agent linking, as we look for ways to make improvements,” the ATO said.
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