Date posted: 28/11/2019 3 min read

Survey shows public practices and tax agents on front line of IR’s Business Transformation

CA ANZ advocates changes as Business Transformation creates challenges for members’ ‘bread and butter’ activities.

In brief

  • Overall satisfaction of CA ANZ members with Inland Revenue declines for the fourth year in a row.
  • Direct taxpayer contact with members’ clients has caused damage to client relationships
  • The Commissioner of Inland Revenue acknowledges that correspondence bypassing tax agents hasn’t always been correct.

Members in public practice have felt the brunt of Inland Revenue's Business Transformation changes this year, according to the latest IR Satisfaction Survey. Just 59% of Chartered Accountants Australia and New Zealand (CA ANZ) members in public practice rated IR's services as good, very good or excellent, with overall satisfaction with Inland Revenue declining for the fourth year in a row.

A key concern has been IR's direct taxpayer contact with members' clients.

The Commissioner of Inland Revenue has acknowledged that correspondence bypassing tax agents hasn't been correct in all instances and IR has since reviewed taxpayer correspondence and made changes.

The annual satisfaction survey, now in its 10th year, commissioned by CA ANZ and Tax Management NZ (TMNZ), asked CA ANZ members in public practice and business for their views on their interactions with Inland Revenue.

IR's Business Transformation saw a major change to members' 'bread and butter' activities this year with Income Tax being transferred to the new START system.

John Cuthbertson CA, New Zealand Tax and Financial Services Leader for CA ANZ, described the timing of the drop in satisfaction as "challenging, particularly as taxpayers and our members are grappling with a new, more automated system."

"Members are telling us this is creating confusion and worry for their clients, and damaging client relationships."
John Cuthbertson, New Zealand Tax and Financial Services Leader.

"Our members, and IR staff, are working with a new 'off the shelf' system and are in the process of learning a new way of working. Some of the functionality has changed, such as the function and limitations of applying tax transfers."

Overall members felt more positive about the new START system than its predecessor. They believe fixing errors, reducing response times between IR and agents and improving the functionality of the website are key ways to improve the system.

The fall in service levels has been driven by the speed of IR's modernisation of the tax system and delays in fixing or at least minimising key issues, Cuthbertson said.

Direct contact

He said "the majority of issues will be resolved, but the time taken to remedy some key issues has resulted in member frustration. A key concern currently has been the direct taxpayer contact with members' clients initiated in the new system.

"Members are telling us this is creating confusion and worry for their clients, and damaging client relationships."

Nearly three-quarters of Chartered Accountants in public practice surveyed say they had clients who were contacted directly by IR in the previous six months, up from 66 percent in 2018.

CA ANZ has advocated on behalf of tax agent members to curtail direct client contact by IR.

Following the release of the satisfaction survey results at CA ANZ's annual Tax Conference last week, the Commissioner of Inland Revenue acknowledged mistakes and said Inland Revenue has reviewed the direction of taxpayer correspondence in the new system.

The bypassing of tax agents is an issue the CA ANZ Tax Team has been regularly engaging on with the Commissioner, government officials and the Minister to seek a resolution. It has also been discussed with the chair of the Finance and Expenditure Committee.

IR says it has reviewed all of its letter campaigns. From Business Transformation Release 4, new letters in START will be automatically sent to the tax agent and only sent directly to the taxpayer in certain circumstances, for example where there is outstanding aged tax debt.

Linking at the Customer Master level, rather than the account level, will result in agents having more mail visibility. Agent Account Managers should be able to help check this setting.

The survey showed that members believed the biggest challenges over the next 12 months will be coping with changes to the system, increasing compliance costs and helping clients manage cashflow.

Very few members know about the next phase of IR's business transformation and 95% of members would like agents to be able to undertake user testing of the Release 4 system at least one month before 'go-live'.

Phones

Improving the IR phone experience – the time taken to answer a call, getting the right person and consistency of replies – was a clear theme in the results. Members want reassurance that their queries can be answered by an experienced person with technical expertise.

The speed of processing queries and providing general tax information, rulings, brochures and tax alerts all improved this year. Satisfaction with these services remains high, though dissatisfaction with information on the IR website jumped.

Search related topics