Date posted: 31/05/2018 5 min read

Preparing your team for tax time 2018

CAs in public practice need to take steps now to prepare for the new focus on Individual tax returns

In brief

  • The ATO has flagged it will be focusing on the individuals’ tax gap.
  • CAs need to protect their clients, their practice and personal brand
  • June is always a good month for training staff on the basics of Form I preparation

For Chartered Accountants in public practice, June is always been a good month for training staff on the basics of Form I preparation and any new developments relevant to the income year about to end.

Such training will be especially important in June 2018.

The ATO will soon be out and about with the biggest ever Tax Time education campaign.
Commissioner Chris Jordan has already flagged that the individuals’ tax gap is a worryingly ‘big’ amount, and may exceed the large company tax gap already published.

The gap isn’t just about self-lodgers using myTax. The ATO is reportedly doing Form I random audits.

It begs the question “how can I protect my clients, my practice and my personal brand”?

Here are some personal thoughts for June 2018.

Risk management

Does your client engagement letter make it crystal clear that you’re relying on the veracity of information clients provide, and that clients will incur extra costs if you need to deal with any follow-up ATO audit \ review activity?

‘Professional skepticism’ is a term I like borrowing from CAs in the audit profession, especially where a client has large or unusual tax claims. The ATO website may say you do not have to sight the receipts and records but I think substantiating records for these types of claims is a good idea.

Leadership

Junior staff are sometimes allocated Form I work for clients with relatively straightforward returns. But some clients can be difficult to deal with, and young professionals need to know how to escalate any concerns they have. Importantly, staff need to know they have the support of their boss when they stand their ground against clients who insist on claiming dodgy deductions.

Software

The ATO’s Tax Agent Portal is our tool of trade. Your staff should be familiar with the Tax Agent online services guide.

Retention of key client documents is vital. Make sure staff know how to scan and electronically save and file (or photocopy and file). And having invested in office technology that lets you schedule client appointments, provide diary reminders and to do lists, make sure your staff use it well.

Tax technical training

The ATO’s 2018 Form I and instructions are an annual must-read. Pay special attention to the “What’s New” section of the Instructions and contextualise new legislation by relating it to individual client circumstances.

I’d definitely be arranging refresher staff training on work-related deductions. Believe it or not this training can be fun. The topic lends itself to mock client interviews and endless “what if” scenarios which gradually add layers of complexity.

Value-add services

Clients are forward-looking, so make sure staff can discuss issues such as recent legislative developments, the Federal Budget and value-add services provided by your firm.

Protect your practice

Read more on Michael Croker’s thoughts on preparing your team for tax time 2018 - "June 2018 a good month for CAs to review Form I risk and conduct staff training".

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