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The accounting industry will have its work cut out over the next 12 months as it grapples with the raft of “bits and pieces” changes proposed in the federal budget, tax experts have predicted.
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Accounting industry braces for budget fallout
10 May 2018
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CPA Australia head of policy, Paul Drum, echoed prominent economist Chris Richardson’s pre-budget prediction that it would be a “busy night” for accountants, urging the profession to brace for an inevitable increase in workload as the government starts bedding down changes.
“Most of the things announced in the tax space are integrity measures around tightening the rules and most of them are going to require consultation on how to make them work and a lot of them are necessary and are addressing problems that have been identified and defects in the law but they are going to take a lot of work for the accounting and tax profession and also in advising clients as those measures go through,” said Mr Drum.
Likewise, BDO national tax director Lance Cunningham conceded that while there was no “big bang stuff” for accountants on the night, the profession would have to deal with the stream of integrity measures in the budget papers.
Some of the standout integrity measures include changes to the operation of Division 7A, cutting concessions in relation to Everett assignments, extending anti-avoidance rules for circular trust distributions, improving the taxation of testamentary trusts, removing the capital gains discount at the trust level, and tightening thin capitalisation rules.
As expected, measures to tackle the black economy were announced, including additional funding to the Tax Practitioners Board to take action against tax agents facilitating activity in the cash economy, and an upcoming consultation on a new regulatory framework for ABNs.
The R&D tax incentive also saw an overhaul, with changes to the intensity test and caps set for companies with an aggregated annual turnover below $20 million.
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Accountants can also expect an uptick in audit activity, as the ATO receives major backing from the government in its bid to clampdown on the work-related expenses front.
However, accountants will have to wait a little longer to see any meaningful tax reform, with Thomson Reuters tax consultant Terry Hayes rueing the lost opportunity.
“This year has been no different. Tax, accounting and business bodies all called for various tax reform measures to simplify the tax system and make "meaningful" reform,” said Mr Hayes.
“While the government's proposal for a staged reform of personal tax rates was significant, fundamental tax reform is still elusive.”
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