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The bookkeeping body’s budget submission calls for regulatory relief in an “incredibly tough” operating environment.
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ICB urges Canberra to intervene in client linking, ditch red tape
05 February 2024
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The Institute of Certified Bookkeepers has presented a grab bag of budget ideas to relieve “irritants and red tape” faced by small business, including an overhaul of the revised client-agent linking system and tax deductions for passport fees.
The ICB’s submission also requested additional funding for at least five different agencies to improve their interactions with tax agents and bookkeepers, as well as the retention of quarterly super payment obligations.
Executive director Matthew Addison said the proposed measures were essential to help small businesses stay afloat in an “incredibly tough” economic environment.
“The bookkeeper community is working with hundreds of thousands of small businesses at the moment. Trade is down, consumers are not spending, so revenue is conservative but costs have increased,” he said.
“These initiatives are the real ones staring us in the face.”
He said 80 per cent of the ICB’s 7,500 members were small business owners themselves, each providing bookkeeping services to others. Many small businesses planned to close within the next six months and “the number of businesses walking away is higher than what is being seen in the insolvency statistics”, he said.
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Mr Addison said security concerns had led to the government becoming “overly sensitive” to third parties acting on behalf of small businesses.
“Entrepreneurial businesses don't want to spend time dealing with government and government compliance,” he said.
“But government agencies, with a purpose of improving their security arrangements, are inhibiting the ability for business to appropriately engage with experts.”
“The government needs to ensure they build into all existing and new requirements the ability for an intermediary – legitimately and correctly appointed third parties like accountants and bookkeepers – to act on behalf of individuals or businesses.”
This would require funding for the ATO, the ABR, the Australian Charities and Not-for-profits Commission, the FWO and the FWC to engage with intermediaries more effectively, the ICB’s submission said.
The trend had manifested most recently in the ATO’s revised client-agent linking system, which involved taxpayers needing to change agents in a process “requiring significant time, effort, and knowledge to engage with government digital systems (ABR, myGovID, Relationship Authorisation Manager, ATO Online for Business)”, the submission said.
The “ineffective” process had confused even tax agents and ATO officers since coming into effect on November 13, industry members told Accountants Daily.
“We call for funding to the ATO to promptly develop an alternative system,” the submission said. “The ATO should be directed to develop a contemporary client consent system. Allow the agent to initiate the linking.”
“Businesses are disconnecting from agents as a result of this cumbersome system and therefore they are also disconnecting from the tax system.”
The ICB also opposed the government’s move to make superannuation payable on the same day as payroll, as announced in the previous federal budget.
“Our deep concern is the banking system will break, the data transmission system will break, and it is not reflective of payroll practices that would enable accurate payment of super,” Mr Addison said.
He said the ATO’s clearing house service relied on by many small businesses also lacked the functionality and capability to facilitate quarterly payments being brought forward to payday.
The ICB’s submission also called for updating the Australian Business Register to digitise processes and improve agents’ ability to make changes on behalf of ABN holders and introducing a $30,000 instant asset write-off and technology investment boost with a 50 per cent deduction.
Passport fees, due to rise 15 per cent on July 1, should also be deductible as the documents were a requirement to achieve a “strong” security rating credential in the myGovID identity system, the ICB said.
“MyGovID is required for a business to engage with Government systems and therefore to conduct their business. Accordingly, the Passport fees should be deductible.”
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