Here's what happened in public practice in 2023

This article was current at the time of publication.

Tax changes

The Australian Taxation Office (ATO) had personal services income (PSI) in its sights. The regulator finalised a new ruling, TR 2022/3.

The ruling combines, updates and replaces two previous rulings – TR 2001/7 Income tax: the meaning of personal services income and TR 2001/8 Income tax: what is a personal services business.

The ATO also finalised guidance around family trust distributions in a bid to clarify where section 100A of the Income Tax Assessment Act 1936 (the Act) may apply. 

Specifically, Taxation Ruling TR2022/4 clarifies the ATO’s position on reimbursement agreements under section 100A, including the exception for ordinary family or commercial dealings, as well as identifying arrangements of concern to the regulators.

Just like us all, the ATO falls victim to cyber-attacks, and quite a few of them. Second Commissioner Jeremy Hirschhorn told a Tax Institute audience that by the time he finished his 40-minute address there would have been 4000 attempts to hack the ATO’s systems.

In 2023 the crypto market collapsed, leaving many investors to ponder on how to calculate crypto losses. Here’s what the experts told us. 

Also, GST and personal services income were in the regulator’s sights this year. Here’s what to do when the ATO comes calling. 

Finally, in tax news, here is some advice on family trust distributions. 

Audit quality in the spotlight

Auditors have shifted to a new quality approach this year. All firms engaging in audits, assurance or related services now need to comply with the new auditing standard ASQM 1. 

The standard shifts the focus from quality control to a system of quality management where identified risks are assessed and responded to and quality manuals become continually refined living documents. Help is at hand.

ChatGPT and public practice, and more!

While there’s more AI on the horizon, 2023 was the year of ChatGPT. But can accountants actually use generative AI in their practices? We spoke to some practitioners dipping their toes in the AI pool. 

Growing insistence from lenders for accountants’ letters should be ignored. Here’s why.

With invoice fraud, data theft and phishing scams on the rise, here’s some cyber security advice for practices. 

Straying outside your scope of work and lack of client documentation can be troublesome. Watertight client engagement terms are key as a recent professional indemnity claim showed. 

Finally, here are some tips to keep your practice profitable and your clients happy.