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ATO’s linked system prefills forms, cuts decision times and highlights any misbehaviour.
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Lodgment deferral upgrade quicker, spots problem requests
10 May 2023
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12 minute read
The ATO’s upgraded deferral lodgment system ticks boxes when it comes to efficiency but also opens a window on problem requests, says assistant commissioner Kath Anderson.
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She said making the system easier was the main goal but data analytics could highlight misbehaviour such as convenience deferrals or attempts to delay payment times.
“We will have analytics in the background that will enable us to detect patterns of behaviour,” she told Accountants Daily.
“Some in the past have deliberately sought deferrals of obligations so that they could defer the due date for payment. We have had evidence that an agent might have approached players in the market saying that they were able to get an extended deadline, so almost using that as a selling point. That’s not looked upon favourably and swift action is taken.”
Ms Anderson said the leadup to 15 May and 5 June income tax lodgment dates were some of the busiest times of the year for deferral requests and making the system more efficient helped relieve pressure on agents.
“At certain times we have a lot more deferral requests … and so if there were any delays in getting to those that would make it very difficult for the practitioner to know whether or not their request has been approved.
“If your request hasn’t been approved and the deadline’s approaching, then that puts a lot of pressure on.”
ATO data reveals about 38 million income tax and activity statement returns are due each year and there were 125,000 lodgment deferrals during 2021–22. Of these, around half were agent-assessed and in total they resulted in more than 2 million obligations pushed back to later dates.
Ms Anderson said the covid pandemic and natural disasters had sent deferrals to an all-time high but making the system easier was not expected to generate more requests.
“The deferrals process is really there to enable us to assist agents in exceptional circumstances,” she said. “So this is where you know something unforeseen has happened that means they’re unable to even meet those extended due dates.”
“We’re hoping that this doesn’t result in agents just thinking well, I’ll just ask for them in bulk just to give myself a little extra buffer.”
Data analytics would reveal it if they did, she said.
“So we’re hoping that it won’t actually necessarily lead to an increase but that there’ll be better information and also whatever is needed is able to be handled more efficiently and effectively.”
The revised system brought substantial time savings both in making the application and processing by the ATO, addressing one of the “key irritants” for agents.
“The previous process involved agents filling out a spreadsheet and sending it back to us in practice mail,” she said. “There were a few things that made that challenging. They needed to understand the right type of deferral that they would be seeking. It was fairly tedious because the Excel spreadsheet was not linked to our systems at all so it didn’t prefill. Once they had submitted the form, they didn’t have visibility and the ability to track where that request was up to.”
The update worked intuitively and much more quickly.
“It begins to prepopulate information from the moment you start entering or accessing the application through to selecting the obligation you’re seeking, to actually identifying the client.”
Previously, deferral decisions sometimes took days or even weeks, but processing time had dropped to a guaranteed maximum of 48 hours and sometimes occurred in just a few seconds.
Applications could be made for income tax returns, FBT, monthly and quarterly activity statements and annual GST returns.
One beneficial effect of the new system was it freed the ATO to focus on “high-risk” applications involving large taxpayers or long deferral requests.
Main reasons for refusal included a request for an over-long deferral, wrong documentation, if the ATO believed an agent could have avoided deferral, or a lack of clarity in the application.
For example, simply saying the client was “impacted by covid” or “unable to provide the information” was unpersuasive.
If there were a need to help the practice with mass deferrals, then a supported lodgment program might be appropriate.
“If it’s a small practice just the loss of one staff member – either through illness or for whatever reason – that can create real pressure and so that’s the sort of thing that the supported lodgment program really is there to help with.”
“We work with the agent to come up with a schedule of when they’ll be able to lodge those returns. As long as they keep to the agreed schedule, they won’t be receiving all the reminders and things like that.”
And Ms Anderson said no matter how digitised the tax system became, there would always be a need for deferrals.
“As long as there are reporting obligations that have got due dates, there will always be a need for deferrals. It would be very rare that everybody is able to get through everything with no challenges. There will always be a need for them.”
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