ATO’s ‘Red Tape Reduction Strategy’ will reduce accountants’ income
According to Geoff Leeper, Second Commissioner of the Australian Taxation Office (ATO), the ATO’s ‘Red Tape Reduction Strategy’ will reduce accountants’ income. Mr Leeper was speaking at last week’s Smithink 2020 ATSA Conference in Melbourne.
“The ATO’s Red Tape Reduction Strategy will reduce the cost for SMEs, from the Small Business Reporting (SBR) strategy, by $500million a year. A lot of that will come from professional fees. This is the ‘digital disruption’ for accountants.”, Mr Leeper said.
“The ATO’s policy is to stop SMEs and accountants from having to fill in forms. There’s no need to re-key in data. This could lead to loss of work for accountants,” Mr Leeper said. “The question for accountants was, what does the data mean?’ Not is the data right?”
Small businesses struggle with Business Activity Statement (BAS) payments, according to Mr Leeper. He indicated that, currently, approximately 60% of the debt owing to the ATO is from small businesses.
“There’s a market there for accountants to offer cashflow management advice,” he said. This would probably lead to compliance and processing work starting to fade away.
“Small business reporting software will be available from July 2015, with full implementation by July 2016,” Mr Leeper said. He indicated that the “SBR is basically computers talking to computers.”
To make this happen, “the SBR will require the attachment of data codes to financial items. This will take the form of a barcode, effectively attached to every financial piece of information in the business’ ledger. The ATO will work with the software and accounting industries for the development and introduction of the standard chart of accounts, for firms with relatively simple taxation affairs.”
Mr Leeper indicated that, “The ATO is promising businesses, provided your company accounts properly reflect what you’ve done and you’ve utilised the SBR, we will promise not to audit your business affairs.” Mr Leeper also agreed with a questioner that the software could generate tax returns, as well as BASs in the future. Mr Leeper said that “this is all going to change the role of accountants beyond compliance. Accountants have to become a business advisor rather than a tax compliance expert for SMEs.”
The ATO have committed to the Productivity Commission that the introduction of the SBR will save at least $500million per annum, the majority of which will come from professional accounting and tax agent’s fees.
Isn’t now the time for your accountancy business to formulate a business advisory services strategy, to ensure your future survival as an accountancy business?
“The ATO’s policy is to stop SMEs and accountants from having to fill in forms. There’s no need to re-key in data. This could lead to loss of work for accountants,” Mr Leeper said. “The question for accountants was, what does the data mean?’ Not is the data right?”
Small businesses struggle with Business Activity Statement (BAS) payments, according to Mr Leeper. He indicated that, currently, approximately 60% of the debt owing to the ATO is from small businesses.
“There’s a market there for accountants to offer cashflow management advice,” he said. This would probably lead to compliance and processing work starting to fade away.
“Small business reporting software will be available from July 2015, with full implementation by July 2016,” Mr Leeper said. He indicated that the “SBR is basically computers talking to computers.”
To make this happen, “the SBR will require the attachment of data codes to financial items. This will take the form of a barcode, effectively attached to every financial piece of information in the business’ ledger. The ATO will work with the software and accounting industries for the development and introduction of the standard chart of accounts, for firms with relatively simple taxation affairs.”
Mr Leeper indicated that, “The ATO is promising businesses, provided your company accounts properly reflect what you’ve done and you’ve utilised the SBR, we will promise not to audit your business affairs.” Mr Leeper also agreed with a questioner that the software could generate tax returns, as well as BASs in the future. Mr Leeper said that “this is all going to change the role of accountants beyond compliance. Accountants have to become a business advisor rather than a tax compliance expert for SMEs.”
The ATO have committed to the Productivity Commission that the introduction of the SBR will save at least $500million per annum, the majority of which will come from professional accounting and tax agent’s fees.
Isn’t now the time for your accountancy business to formulate a business advisory services strategy, to ensure your future survival as an accountancy business?
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