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The ATO has been asked to consider blanket lodgement deferrals and to hold off on debt collection to give the profession time to cater to their clients suffering from the sudden coronavirus-induced downturn.
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ATO pressed to apply blanket lodgement deferrals
25 March 2020
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The Institute of Public Accountants will today lobby the ATO to apply a blanket extension to lodgements, pointing to the enormous pressure the profession is facing in helping their clients access the government’s $84 billion economic stimulus package.
“I’ve had members crying to me,” IPA general manager of technical policy Tony Greco told Accountants Daily.
“We’re asking for a blanket deferral for lodgements while they deal with clients’ requests on all sorts of issues. They’re all getting inundated, which means they can’t do the day-to-day work.
“Clients are asking for updated cash flow because they want to ward off a bank or they’re trying to work out what stimulus assistance is coming their way, worried about what they do with staff — some of their revenues have just dried up.”
The ATO’s current position requires agents and their clients to apply for lodgement deferrals on a case-by-case basis.
In an open letter to the tax profession, ATO commissioner Chris Jordan said “blanket measures are not sufficient”.
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“We have already been working closely with individual agents and the Tax Practitioners Stewardship Group to identify how we can best respond to what you need from us,” Mr Jordan said.
“You told us that the challenges you are facing are diverse and complicated, and that blanket measures are not a sufficient response.
“That’s why we are committed to working closely with you and your clients, to tailor our response to individual circumstances and ensure we are offering the best possible support for your situation.”
In the United States, however, the Internal Revenue Service has moved to automatically defer its tax filing day for three months.
“We understand why the ATO is resisting that call because, effectively, there are some quarters who can continue making payments and lodging, but I think for our members to do the paperwork to ask on a case-by-case basis just put another burden on the profession,” Mr Greco said.
BAS lodgements a priority
With the government’s $100,000 tax-free cash payments tied to an entity’s BAS lodgements, Mr Greco believes a blanket deferral will allow agents to prioritise their work.
“You’ve got to allow them time to get their ducks in order,” Mr Greco said.
“Clients are aware of the importance of timely preparation of BAS, because now the stimulus is tied to a BAS process where the payments will be automatic for most people.
“So, you’ve got to allow the diversion of resources towards completing that all important lodgement of BAS and switch off the other ones where the ATO can provide a blanket deferral.”
Likewise, CPA Australia believes a blanket deferral will be useful.
“In the main, we think the better view is a blanket extension for all the work but that the work must go on in between,” said Paul Drum, CPA Australia general manager of external affairs.
“Some members have said if there’s a blanket extension, then clients won’t come in. But I think what they need to understand is that the extension is really to ensure that penalties aren’t triggered and the work still goes on.
“And in some cases, the trigger to get clients to come in will be access to one of the stimulus measures to see whether it applies for them.”
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