With the financial year coming to a close, technology will play to the strengths of younger practitioners’. Throughout the year technological issues have emerged in tax, staying up-to-date on these issues will make you stand out in the crowd. Here are four key things to look for come 1 July to ensure you are ahead of the pack.
1. Scam season
A new financial year brings with it new scams. Clients can be severely impacted, and tax professionals themselves are not immune either. Australian Taxation Office (ATO) statistics show a 68% increase in reported scams in May 2016 with a total of 15,006 scams reported in that month alone. These scams are only likely to increase as the new financial year kicks off and individual taxpayers start lodging their tax returns from 1 July.
Given the high profile of cyber security, it’s time to get your superiors on board with formulating some standards around what staff should do to minimise the risk of your firm and clients being impacted.
2. Data leaks
In April this year, millions of documents were leaked from the Panama-based law firm Mossack Fonseca garnering a lot of interest from media, revenue authorities and the general public. The information released illustrates the extensive use of offshore entities in tax havens to shelter income and assets. Besides the important lesson in ethical tax practices in this story, there is the less-publicised IT story. News broke recently that an IT technician in the Geneva branch of the firm has been detained and is facing criminal investigation in relation to the leak. Without proper controls, IT issues can quickly become a reputational risk for your firm.
3. Early client contact
This year the ATO will have improved data-matching technology and will be armed with more sophisticated benchmarks of what constitutes a range of “normal” tax profiles and whether your clients are within that range. For the first time ever, the ATO will be checking taxpayers’ deductions in real-time as they complete their online returns. With the ATO investigating client data earlier in the piece, so should you.
This addresses a longstanding frustration of tax professionals who can sometimes be the last to know about their own clients' tax affairs through no fault of their own. It’s worth investigating whether your firm can get involved.
4. Practice software
At our National Convention in March, the Commissioner of Taxation Chris Jordan AO, announced that a Practitioner Lodgment Service (PLS) will be available from 1 July. This is a new gateway for practitioners to lodge returns with the ATO and from March 2017 it will be the only gateway to do so. If your firm’s software isn’t ready in time, you will be stuck running to the ATO with stacks of paper returns to lodge.
The ATO is expecting a gradual build up in returns lodged through PLS between now and March 2017.Time will tell whether software developers will get on board with this strategy rather than leaving it to the last minute to have their software packages SBR-enabled.
As a member of The Tax Institute, you will be provided with the support and knowledge to stay abreast of any changes this financial year and election.
For more information on membership with The Tax Institute visit taxinstitute.com.au/membership or call an advisor on +61 2 8223 0089.
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