The ATO will aim to give accountants and bookkeepers better data insights, such as in-depth benchmarking data, to enable practitioners to better advise their business clients.
Speaking at Xerocon 2019, ATO second commissioner Jeremy Hirschhorn said the agency’s greater access to data has given it the opportunity to help practitioners deliver better insights to its business clients.
“If we can get you information into your systems, where you can see that your hairdressing client in this suburb is doing poorly compared to other hairdressing clients — well, that’s very useful information for you as a business adviser, because you can actually work out and give good advice, or maybe ask a few more questions whether they’re running risks,” Mr Hirschhorn said.
With the ATO’s latest small business tax gap report indicating that close to nine in 10 businesses were trying to comply with their obligations, Mr Hirschhorn said the Tax Office is now looking at ways to “help businesses thrive” through the sharing of data with practitioners.
Further, he said the ATO would also look to leverage on an increasingly digital environment to help spot and prompt practitioners on potential business issues earlier on, rather than conducting a full-blown audit after the fact.
“We’re not in the business of penalties, we don’t like seeing businesses fail, we want to see businesses do well,” Mr Hirschhorn said.
“To the extent that, if we’ve got data and information, how can we get it to you to say, ‘Hang on, it looks like something is going wrong here. You’ve got an opportunity to fix it before we get to a new level of action’.
“To me, the great challenge is how the Tax Office can support [practitioners] to help their clients be successful, because we’re just a symptom.”
He concluded: “When that business fails because it’s bankrupt, because it hasn’t paid its super, or it hasn’t paid its PAYG, it hasn’t paid its GST, that’s not a tax problem, that’s a business problem, which could have potentially been solved earlier or at least, if that person is in a sense, in business when they shouldn’t be, the wreckage could be less.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals. With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including The Sydney Morning Herald and Channel NewsAsia.