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The revised procedure will encompass an additional 1.7 million entities from 13 November.
ATO linking system takes giant stride into business
22 September 2023
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9 minute read
The ATO’s revised client linking system takes a giant step forward in November to take in roughly 1.7 million businesses yet to be encompassed by the rollout.
The expansion, which starts on November 13, applies to all businesses with an ABN except for sole traders and includes companies, trusts, partnerships, not-for-profits and superannuation funds.
The six-step procedure, as outlined by the ATO late last year, prompted a storm of protest on social media and angry comments from Accountants Daily readers who described it as a “joke” and “absolutely ridiculous”.
Representatives from CA ANZ, CPA Australia and IPA are understood to have pushed for changes to the system but it survived unmodified, the ATO said.
“The process will follow the steps used by the 191,000 business entities who have been progressively deployed since 19 June 2022,” an ATO spokesperson said, referring to the initial phases of the rollout which took in big business, multinationals and government entities.
Outlining the new procedure the ATO said: “Businesses and organisations included in the process will need to nominate their agent before the agent can add them to their client list.”
“They will need to use the new agent nomination feature in Online Services for Business when they:
- Engage a new tax or BAS agent, or payroll service provider to represent them
- Provide extra authorisation to their existing authorised agent (for example, the agent begins representing them for a new obligation, such as income tax or a new entity in their group).”
“After your client completes the agent nomination, you’ll have seven calendar days to add them to your client list in Online Services for Agents or your practice software. You won't get an automated notification advising you that your client has completed the nomination. So, make sure you tell your client to let you know.”
Head of policy and advocacy at CPA Australia Elinor Kasapidis acknowledged the ATO’s need to tighten security but said many businesses would struggle with the system.
“Our members are understandably concerned about the extra work it creates for their clients,” she said. “This is especially so for small businesses who have previously relied on their tax agent to do this work for them.”
“Switching to digital systems should make things easier and more efficient, but only if businesses know how to use them. The ATO needs to ensure it provides adequate support to businesses when they begin to navigate this change.”
“We have a diverse society with lots of different needs and accessibility is important. It’s crucial to make sure there are alternatives such as paper and phone-based options for those who require extra support.”
The ATO confirmed it would proceed with the final phases of the rollout, which will take in roughly 800,000 sole traders and more than 15 million individuals.
“We intend to roll out the client-to-agent linking to individuals and sole traders in the future,” an ATO spokesperson said. “We will be consulting with the community before we deploy this tailored solution to them.”
“We have listened to feedback from those entities that have been deployed and we are continuing to enhance the process and provide additional support material.”
Director of 5ways Group accountants Paul Meissner, who was a party to the ATO consultation process on the system, said it was unclear whether the procedure would survive unchanged for the next phase but welcomed the latest expansion despite a few issues.
“As a tax agent, as a small business owner, I don't see what the fuss is about,” he said. “MyGovID is currently being used for tax agents – it’s being expanded.
“The new Online Services for Agents is the accepted platform for agents. Online Services for Business, which is the business version of the portal, is already the accepted contact point for the ATO.”
“The professional bodies are very good at theory and policy. But they don’t have the practical knowledge because they don’t press the buttons every day.”
“Let’s talk about how we can streamline this experience, which the ATO is extremely focused on doing.”
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- Another myGov requirement? ATO should first fix the tax lodgement as scammers are currently having a feast claiming overstated tax refunds thru the myGov app.2
- Plus myGovID seems to be down on a daily basis.0
- So the client is with a tax agent now. That client is fine and we are all happy. Then that client wishes to change to a new accountant ... so now he is possibly a terrorist or money launderer and we must go though 5,000 checks. Same at the bank. You have an account, you are a citizen. You want a new account, you may be a smuggler, foreigner or criminal you need 100 points, a blood sample and a note from your mum.2
- At least taking on companies shouldn't be a pain since they already went through setting up myGovID for the director ID farce. I predict that I will be sitting beside more clients talking them through setting up myGovID that they will not be interested in using again. Yes Paul I understand the need for better security in the process, but in 27 years, I've only once experienced a fake new client.
We're six weeks from roll out, but I seem to have missed seeing any webinars from the tax office or the TPB about how the system works or emails reminding us of where to find the information. Oh wait, October is BAS period, managed fund client tax return period, and fake panic October 31 deadline period. Of course that's the ideal time to run webinars for agents because they don't have any other important commitments to meet.4- Spot on, why do it now? Why can't these things be done on July 1? All the money launderers will get wind of it and sign up to new tax agents before Christmas. It will be because the idiots that dreamt it up have to meet performance targets or some such. "Public Service" is now the No 1 saying in the dictionary of sarcasm.0
- "Did these boneheads learn nothing from the DIY director ID debacle?"
3 - So, what was previously a one-step process becomes a six-step process; seven days to action the nomination once activated, with no notification that it has actually been initiated; additional nomination required each time you want to add a new entity or update a role for an existing client.
And this is supposed to streamline the engagement process? Yeah, in the same way that MyGov streamlined the communication and correspondence process with tax agents.
I can't speak for other agents, but only a tiny fraction of my clients use OSB because we do all that stuff for them. Another cock-up in the making.4- Hi David, The six steps is a bit misleading as some of the steps just happen. Realistically it's a two-step process if the client has OSfB. This is also only for new clients and not if you want to add a role. This new process was never about streamlining as it was always going to be longer than the current process, but it needed to be more robust due to security concerns. It's streamlined as much as it can be.
OSfB provides clients with an opportunity to engage with the ATO (getting correspondence, checking balances and payment details), which I think is not a bad thing.0- It's a two-step process if the client has already completed the four-step requirement to get there. Just like creating a tax return is as simple as entering numbers into boxes, ignoring the calculations required to work out those numbers.2
- As an SMSF specialist, I can tell you that I think 0% of my clients have online services. And, as average everyday people, generally not business owners and many over 65 in retirement, this is going to be a huge hassle to onboard a new client.2
- Agree for brand new business only. If a business is already a client of a tax agent that should require no new process. You are effectively saying if the business stays with their current accountant they are law abiding citizen, but if they want to go to new one they could suddenly be a terrorist or money launder. Makes no sense at all.1
- Perhaps director of 5ways Group accountants Paul Meissner was not the ideal representative of the wider tax consultant community when he "was a party to the ATO consultation process on the system". There are a lot of clients out there who can operate their private myGov, but cannot operate Online Business Services.6
- I respect the views of agents and do understand that some clients lag in technical knowledge but the need was there to come up with a solution and while OSfB isn't perfect, it's the best that I feel could have been achieved.-1
- I have decided that's it for me - so sick of the hours spent on compliance that brings me no benefit. Time to prepare my business for sale and not taking any new clients on as a result. One day (maybe) the ATO will wake up to themselves but not in my lifetime from what I can see. Maybe if they spent more time defending their systems via MyGov from hackers - who seemingly are able to change returns, addresses and bank accounts, etc in a matter of minutes generating huge amounts of fraudulent returns - instead of this nonsense we might start to take them seriously when it comes to "improved security".6
- Could the ATO not visit China and Russia and find out just how they need to set up their systems. It's Dodgy Brothers at the moment - find a problem, come up with a whole new system: TFN, ABN, myGov, myGovID, relationship manager, ABR, ASIC agent no, ACN, corporate key, director ID, ASIC Connect, ASIC representative ID, and it will never end. If fraud cost this country so much perhaps we are better off going back to paper.1
- Did these boneheads learn nothing from the DIY director ID debacle?4
- No new clients then.
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