COVID-19 tax tips for public practitioners

Intro:
Hello, and welcome to the CPA Australia Podcast. Your weekly source for accounting, education, career and leadership discussion.

Rupen Malouf:
Hello, and thank you for joining us today. My name is Rupen Malouf. I'm the acting general manager of the New South Wales division of CPA Australia and I've previously been in public practice. Welcome to today's session, which is all about preparing for tax time 2020. I think it's also important to note that with the ever-changing landscape of COVID-19, it's important to note that this recording was done on the 18th of May and that any facts presented are relevant as at today. Joining me today, we've got two members of the CPA Australia Public Practice Advisory Committee, Gavin Swan, and Shanna Hunter.

Rupen Malouf:
Gavin has been a principal of a public practice firm, Absolute Accounting Services on the central coast in New South Wales since 2000. And has been in the accounting profession since 1986. He's a fellow of CPA Australia and has a bachelor's degree in business and a master's degree in commerce. Gavin is a member of several professional bodies including CPA Australia, and is a registered tax agent. Gavin contributes towards various discussion and technical groups, including the ATO Tax Practitioners Stewardship Group. And is the deputy chair of the CPA Australia, New South Wales Public Practice Committee, and has presented in a number of forums, including live webinars, live radio and public practice intensive seminars for CPA Australia.

Rupen Malouf:
Shanna has been director of public practice firm Hunter Taxation Services in Townsville, North Queensland, since 2009. She has 20 years’ experience in public practice accounting, supporting individuals, and SMEs. She's a fellow of CPA Australia and a registered tax agent. Shanna is a member of the CPA Public Practice Advisory Committee, chair of the CPA Queensland Public Practice Committee, and a member of the ATO Tax Practitioners Stewardship Group. Welcome to Gavin and Shanna.

Gavin Swan:
Thanks, Rupen.

Shanna Hunter:
Hello. Thank you.

Rupen Malouf:
It's good to have you both here to talk about tax tips for 2020. It's not that long ago since it's... Well, you guys just wrapped up the 2019 lodgement, didn't you?

Gavin Swan:
Oh, indeed. There's a lot of people still lodging 2019 tax returns as we speak. With all that's been happening with COVID-19, I guess people haven't really thought too far ahead regarding tax time 2020, but in about a months’ time, it'll be on our doorstep whether we like it or not. And it'll have a few extra bells and whistles with it.

Rupen Malouf:
All right. So, today's podcast, it's going to provide some practical tips to help prepare practitioners and their teams, as well as their clients during this COVID pandemic. Maybe we should start with technology and security. How would your teams work remotely during this tax time?

Gavin Swan:
Shanna, I'm happy to kick this one off if you'll let me. We're hoping that by the time we get around to tax time in July that there won't be too many of us working remotely, but certainly what this lockdown time has taught us is how to work remotely and how to work effectively out of the office and simultaneously deal with clients. So, we will still be prepared to be working remotely, even though we're hoping to go face-to-face as far as possible. Specifically, when we're talking about working from home, you have to get set up from home and that involves getting all of your security protocols set up. It involves having a very close look at your access manager. So, when you're online services for agents, you really need to have a good look at your access manager to make sure that whoever is working from home can get into what they need and only what they need, no more than that.

Gavin Swan:
And it's also important to have the relevant security protocols in place. And specifically, there, I'm referring to making sure that you've got the right gateways in your office and Windows 10 as well. So, you need the latest in software there. I guess the other thing too, Rupen and Shanna, is that it really has taught us in the past couple of months to be able to deal with clients remotely. So, in other words, emailing them the information, having a look at what information we've already got before we contact the client and requesting information from them either to be dropped off or in electronic format. And by and large, certainly from my practice, it seems to work fairly well.

Shanna Hunter:
Yeah, same for us, Gavin. I've been lucky in North Queensland and I've actually worked from my office the whole time. I haven't had to do the "From home." I do that anyway after hours and on weekends, but the staff have been in the office, but we haven't been having those appointments face-to-face. So, we have had to move to more telephone appointments or the Zoom appointments. So, Gavin, it has worked really well with clients today.

Gavin Swan:
It's surprising how quickly they've taken things up. I guess necessity is the mother of invention. And some of these clients, who you would never thought you would get out of the shoebox, have all of a sudden presented themselves on Zoom, or WebEx or on teleconferences, or you're having to link up three telephone calls so you can speak to their lawyer or bank manager on the same phone call. So, it seems to have worked fairly well. And it has also given us a chance to have a look at our business model. And that is, we might have seen people face-to-face because that's why we always did it, but now it's forced us to say, "Look, there is another way of doing things. And if it's more convenient for you to send us your information electronically or give us access to your zero file or drop the information off then..." Yeah, that has presented itself some new opportunities. So, I can't say it's been a bad experience.

Rupen Malouf:
Gavin, you mentioned MyGovID and Online services for agents. In addition to other pressures with COVID-19, how do you think this process will affect you day-to-day?

Gavin Swan:
Look, I think new technology is always welcome. And certainly, by this stage of proceedings, we should all be familiar with MyGovID and online services for agents. This time last year, a lot of people didn't know what MyGovID was, and they were still using the old portal through AUSkey. So, none of those things exist anymore. MyGovID has given us the ability to access the tax office system via Online services for agents remotely, apart from having a different suite of reports available to us, and certainly more timely reports as well. So, I take it as an opportunity for us to be able to use technology to help us deal remotely if we can. But that aside, Online services for agents has a number of other reports in there that I think our listeners should certainly familiarise themselves with, particularly with income statements that are coming out, particularly with the superannuation information that's available, and in more general terms, the information that's available through single touch payroll.

Gavin Swan:
I should also note that it's just been released on the weekend that deceased estates we've at last have access to that as tax agents. So, that will help us moving forward in this tax time. But certainly, online services for agencies should be across that. And the new reports I would imagine in Online services for agents for 2020 tax time should include JobKeeper payments. And I guess just as a timely reminder, not only should it include JobKeeper payments and JobSeeker payments, but a timely reminder that it will have all of effected Centrelink payments that need to go on a tax return in there. So, I would be encouraging everyone to really get across Online services for agents if they're not already done so.

Shanna Hunter:
yeah, I agree, Gavin. I think that given the alternate working arrangements this year, it's really helped people to be able to access the information from anywhere, home client premises. And the different information that's available on there. And then what we'll need, I think will come in a timely fashion, the information from Centrelink and that sort of stuff, which will help with tax time and us preparing individuals' tax returns.

Rupen Malouf:
We're going to take a short break. Once we're back, we'll be discussing potential lodgement issues and looking at how to manage client expectations.

Announcer:
We hope you're enjoying this episode so far. To access all of CPA Australia's COVID-19 related resources, including articles, videos, checklists, and advice go to cpaaustralia.com.au/covid-19. And now, back to the episode

Rupen Malouf:
Welcome back. Thanks for joining us again. We're now going to be moving onto the topic of regulators and their potential hotspots. Gavin and Shanna, with your involvement with ATO groups, what do you think we can expect from the ATO this tax season?

Gavin Swan:
Rupen, it's fair to say that despite everything that's been happening with COVID-19 that the tax office has still, nonetheless, been devoting a lot of resources to the preparation of tax time 2020. So, it's business as usual for them, they're going to be looking at things like pre-filling reports. They're also going to be looking at data matching. Something that I would be looking to come out from the ATO over the course of the next month or so, and this is certainly in the absence of a budget that we would normally have it around this time, is various ATO announcements in the absence of the federal budget. Because there are certain measures that are coming to an end at 30th of June. And there's certain measures that will need some clarification before the 30th of June. So, I'll be keeping an eye out for those types of things from the ATO. But certainly, it's business as usual, they're very aware of what's coming up with tax time in 2020. Shanna and I have been involved behind the scenes in helping the tax office prepare for that.

Shanna Hunter:
Yeah, Gavin, I'm just going to add that we... The ATO are continuing to design fact sheets to assist tax agents, and clients with the various occupations and other items like car expenses, working-from-home, donations, and clothing, and laundry. So just some information there on what the do's and don'ts are.

Rupen Malouf:
Those fact sheets are very useful. Do you see that there'll be any lodgement issues this year?

Gavin Swan:
Look, I think there will be. I think there'll be a lot of pressure to lodge early from people looking for refunds. And I think that some people won't get the refunds that they perhaps desire because they may not have properly taken into account things like Centrelink payments and JobKeeper payments and so on. And people will be looking for refunds. I think the other lodgement issue might be a technical issue with the online services system. There's a different protocol, which is machine to machine, instead of AUSkey. Again, most practitioners should have had that sorted out by now. But provided that is sorted out, the lodgement side of things should go fairly smoothly from a technical side. However, the real problem will be the pressure that's brought to bear by clients in terms of trying to get their tax returns lodged.

Shanna Hunter:
It's also the first year for single touch payroll for employees with 20 staff or less. So, we're going to see, no longer getting PAYG payments summaries and all the information going through to MyGovID. So, there was some of that last year, but I think this year we're going to see the rest of it come through and that will either help us, or possibly delay some of the information coming through.

Gavin Swan:
Yeah, really good point there, Shanna, because when you look at the single touch payroll, some people will see that information pre-fill on a pre-fill report, but it's absolutely imperative that you got to wait until that STP data has been finalised and it comes up with finalised on the pre-fill report. So, yeah, very good point because you're going to get a lot of phone calls regarding that this year to say, "I can see my income statement." But if it's not finalised, then don't bother lodging.

Shanna Hunter:
I think we might also have April to June BASs wanting to be done early for the second round of the cashflow boost as well.

Gavin Swan:
Agreed. I think one of the things we'll talk about is workflow. And I think that July, August, and September will present its own issues with workflow. So, you've got many people who will be competing with our lodgement space for various and sundry reasons, Rupen. So, I think it's going to be busier than normal in July and August.

Rupen Malouf:
Happy days. With the JobKeeper and JobSeeker payments, it's going to be affecting many clients. Will this change the way it's all reported?

Shanna Hunter:
With the JobSeeker, that's generally not going to be taxed by settling. So, I think there'll be lots of individual clients that may result in a payable or not the refund they were expecting as a result.

Gavin Swan:
Yep, fully agreed. And I think the other thing further to what Shanna is saying is that pre-fills will become more important than ever. You're going to have these additional payments, and we've heard stories about how people might be getting JobKeeper, but still have another job somewhere. So yeah, they may not get the refunds that they expect. So, I advise, honestly, to run those pre-fills and look at them very, very carefully.

Rupen Malouf:
And do you think we'll see any different requirements from the Tax Practitioners Board?

Gavin Swan:
I think it's business as usual for the TPB. They will be looking at things that they have been doing for the past couple of years. So, it's no secret. They'll be looking at identity fraud, tax agent identity fraud, where the tax agent is purporting to be an individual. Unregistered tax agents and agent behaviour in general. They will also be looking at things such as reasonable care, have we as tax agents taken reasonable care, and have we also fulfilled our personal tax obligations? So, it'll be very much business as usual from the Tax Practitioners Board.

Rupen Malouf:
So, if we move on to client engagement, have either of you changed your external communication strategy with your clients and what does that look like?

Shanna Hunter:
I think with the lockdown restrictions of COVID-19, we've had to work on our external communication a bit better as we haven't been able to have those face-to-face meetings. So, I've been doing a lot more with emails and newsletters and the social media through Facebook and LinkedIn and those sorts of things.

Gavin Swan:
Yeah. Look, a hundred percent Shanna. We've been investing heavily in email. So, the style of communication has changed for us. But agree with Shanna totally there, it's email-based, it's getting your website up to date at social media. So, technology has intervened there. But using your softer skills as well, we've found that we've had to initiate much of the conversation now. So, we've been the one reaching out to our clients. Traditionally we've waited. The traditional accounting model says, "We'll wait for you to contact us when you've got a problem." But that hasn't been an option. We've all collectively had to get on the front foot with our external communications. And I think we'll find that leading up to tax time 2020, that will bear some fruit.

Rupen Malouf:
We talked earlier about lodgement issues. Often this goes hand in glove with workflow. So, what do you see as potential workflow issues in tax time 2020?

Gavin Swan:
I'm going to recap on some things that we've already talked about. Shanna talked about BASs wanting to be lodged a little bit earlier than normal. And we also talked about people who are going to be hungry for their refunds. I think we are going to see a very early peak with tax time 2020 in terms of workflow. Most concerning for me is, I think we're going to see a double peak. And that is, I think we're going to see individual tax returns coming in at the same time as not only BASs, but generally business tax returns that need to be done. We've been in front of these people non-stop for the past two months and we're going to be front and centre of their mind.

Gavin Swan:
And I think, whereas they would normally come in later on in the financial year, so perhaps October, November, December, I think we're going to see them coming in a lot earlier to see how they have gone through the year and get an update on any other government measures. And, potentially, also have some up-to-date figures that they may need to go to the bank with. So, that's my concern, I think July and August and September are going to be horrendously busy. And I think the only way around that is just prepare for it as much as you can.

Shanna Hunter:
A hundred percent agree. I think we're going to be very busy in those earlier months this year with everyone needing stuff. And I know with Queensland, we've got different loans and stuff available from the government like there is in other States, and they require the information updated and stuff. So, I think we're going to see a lot this year come in early.

Gavin Swan:
Now naturally from that, what do we do? We can't invent more accountants and we can't manufacture time. So, a natural question would be, how are we going to cope with that and how we as accountants going to manage it? And again, we've been in front of these people non-stop for the past two months. So, we've got the advantage of having some up-to-date information. We certainly have background on where the client is at, so that always saves a bit of time because we don't have to familiarise ourselves with what has happened in the past 12 months. I think prepare as much as you can in terms of getting your data ready, having your client lists properly segmented, having your client information up to date, getting checklists out there, things like STP, that Shanna and I have alluded to before, will also help proceedings. It'll also raise a few questions, but it will help having had STP information prefilled for more and more clients this year. It's how you manage that data that is going to be key to managing our clients through this busy period.

Rupen Malouf:
Okay. And as trusted advisors, there's an expectation that you'll have to educate your clients, but also for yourself as well, being time poor, what tools have you used to keep yourself on top of everything?

Gavin Swan:
Good question. Look, the tools that we've got to help us out, we've got social media, we've got emails, we've got our website. One of the particularly good tools I have leveraged in the past couple of months is our bookkeepers. So, if I get hold of one bookkeeper, and am able to help them out, they can spread the word to ten of my clients that they might look after. So, that really helps me in the education process. I will say, throughout this as well, and Shanna, I think would agree with me, is that the ATO has been very, very good with the information that they are putting out there so that there is a lot of very timely and accurate information going out to our clients. And that really helps our case when we're trying to educate the clients.

Shanna Hunter:
Yeah. Agree, Gavin. The information from the ATO has been great. And with CPA, we've had lots of resources and stuff that we can use to help us in this time with the government's economic response to coronavirus and all the different things that we had to implement in the last couple of months.

Gavin Swan:
Yeah. And just in terms of client engagement as well, I'd been making time before we hit tax time 2020 to have a look at those resources that are available from CPA Australia, and also from the ATO. I think it will save you a lot of time moving forward.

Rupen Malouf:
Okay. And if we finish up with some tips and tricks. Can you share any other strategies that you'll be using to make COVID-19 tax time a little easier for you and your team?

Shanna Hunter:
Like Gavin said earlier, we need to advise our clients and get them to plan ahead. We don't want any big surprises this year because everyone has been struggling. So, we need to get them to put aside money for their BASs and tax lodgements now, while we're doing this pre-planning.

Gavin Swan:
Yeah. All of this pre-planning of course involves us having a client list in front of us. So, what I would be saying is, "Look at your client list, get to know it, segment it." One of the things that we're doing here in the lead up to tax time 2020 is instead of waiting for clients to come to us, we will be going to clients. Once we've got the pre-fills sorted out, and once we know what our easier and perhaps more needy clients are, and generally they're the same client that are both easy and needy, we'll be saying to them, "Look, we've got your stuff pre-filled come in and sign off." Or "Is there anything that we're missing? Or is there anything that you want to talk about?" So, we'll be trying to get those easy ones out of the way, just to get the process of tax time 2020 moving.

Gavin Swan:
So, it's quite imperative that you study that list. You get used to what your clients are doing and get them in there as soon as they're ready, otherwise you'll be marching to their beat. It's imperative that you're the one setting the tone for this tax time 2020. Another tip or trick that you could use in the lead up to 30th of June is that we've, again, been speaking to clients during the past couple of months. Onboarding your clients to your firm's preferred business software is another suggestion. And that is if you've been speaking to clients and they're on an old version of MYOB, for example, it might be time to get them on to MYOB Online or Xero. And that's going to save you doing that set-up time in that busy time of July and August. The other thing too, as we head towards the end of 2020, and we're doing some tax planning as best we can, dovetail your tax planning in with some revised forecasting for the following financial year.

Gavin Swan:
In other words, you're offering both year-end tax planning and year-end cost saving services. And as we see clients in that July, August and September timeframe, we're going to be looking at the road back to recovery. So, we're not going to be lamenting the failure of our businesses, we're going to be trying to assist clients there in terms of getting the road back. In terms of getting on the road back, should I say. One of the things I've found very beneficial during this time too, is to have regular team meetings. So, get your teams together every second day, if necessary. Especially in the early part of tax time 2020, and the lead up to the end of the financial year.

Gavin Swan:
Just to make sure that everyone's on the same page and you're not wasting your valuable time from tax time 20 in doing things that could have been resolved beforehand. And I guess just a couple of other tips as well, just make sure that your checklists and your engagement letters are all up to date. And of course, make sure your software is up to date. And give it a good testing before you go out there into battle because I think the upcoming tax time really will be a battle.

Rupen Malouf:
Okay. Thanks Shanna and Gavin for your time today. So just to wrap up, some of the points I've put down are some potential issues around JobKeeper payments and people expecting refunds, even though they've been receiving those payments. Ensuring that the STP reports have all been finalised before starting tax returns. Going on the front foot with what we're expecting to be an earlier tax time for 2020. Preparing client lists, checklists, testing your systems prior to the big rush. And also, just remaining in touch with your teams, constant communication, and just overall being proactive.

Gavin Swan:
I think that's a really summation of it, Rupen. I couldn't have said it better myself, actually. I think it's important that preparation really will be the key. And remember that there are resources available to you from both the tax office and also CPA Australia. So, do avail yourself of those resources. We are all in this together, so yeah, all the best to everyone moving forward during this busy tax time 2020. You know that you can get assistance from CPA Australia if you require it.

Rupen Malouf:
Thank you. And at this point, I'd like to mention that if there are members looking for any resources from CPA Australia, these will be made available for the show notes page on this podcast. I'd like to thank Gavin and Shanna again for their time today. It was lovely having you.

Shanna Hunter:
Thank you, Rupen.

Gavin Swan:
Yeah, thanks, Rupen, and thanks, Shanna. Absolute pleasure.

Outro:
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