SPECIAL REPORTPRACTICAL GUIDE

A PRACTICAL GUIDE FOR ACCOUNTANTS

Navigating the Practitioner Lodgment Service

tax.thomsonreuters.com.au/software-assistant/

SOFTWARE ASSISTANTTHOMSON REUTERS

2 NAVIGATING THE PRACTITIONER LODGMENT SERVICE — A PRACTICAL GUIDE FOR ACCOUNTANTS

With the Australian Taxation Office’s transition to the Practitioner Lodgment Service (PLS) and the related need for Standard Business Reporting (SBR) enabled software, many tax professionals are wondering what they need to know and what actions they need to take.

In this practical guide, we’ve compiled information to help you learn, prepare and take action to ensure you are properly equipped for the transition to PLS and SBR-enabled software.

LEARN

Overview The Australian Taxation Office (ATO) is transitioning from its long-standing Electronic Lodgment Service (ELS) to what is known as the Practitioner Lodgment Service (PLS). PLS will replace ELS as the ATO’s primary electronic lodgment channel for tax practitioners. This transition requires business and tax software providers to upgrade to Standard Business Reporting (SBR) enabled software.

Introduced by the government in 2010, SBR is a standard approach to digital record-keeping. It incorporates standard terms that are used in government legislation and reporting and links them to terms used in business/accounting software. This creates consistency and simplifies the reporting obligations for businesses.

While PLS is the lodgment channel, SBR is the format software providers will use within their practice management software packages that will enable reports and data to be sent to the ATO and other governmental agencies. Lodgments made in PLS will need to be made with SBR-enabled software packages.

With SBR-enabled software, businesses and accounting practices can go about their daily activities while data from the ATO is automatically extracted and prefilled into relevant government reports. This means less time filling in forms and more time spent on running and growing their businesses.

Timing As of November 2016, all major tax forms approved by the ATO can be lodged via PLS using SBR-enabled software. The ATO will start retiring tax forms from the ELS platform starting 1 October 2017 through 31 March 2018. This means that if there are any stability hiccups or performance issues with PLS, ELS will be available as a backup. It’s important to note that the FBT return will not be made available through ELS for 2017 due to the small number of FBT returns filed in comparison to main tax forms.

3 NAVIGATING THE PRACTITIONER LODGMENT SERVICE — A PRACTICAL GUIDE FOR ACCOUNTANTS

Transition In late 2016 and early 2017, the ATO experienced several major service disruptions affecting PLS lodgment and it has warned users that further service disruptions can be expected. In circumstances like this, it will be necessary to utilize ELS as a backup solution. Some software providers like Thomson Reuters will make both PLS and ELS channels available through their SBR-enabled software, making scenarios like this less troublesome for tax practitioners. While it is important to be an early adopter of PLS, remember you have ELS to fall back onto if PLS is slow or unstable.

Along with this transition, tax and accounting software providers must provide SBR-enabled software to their users. Your software provider will let you know when they expect to make this software available to you, and what you need to do to make the transition.

PREPARE Update your software As you prepare to transition to PLS, make sure to confirm your software update plan. Depending on your tax preparation software, you may simply receive your usual tax time software upgrade to begin lodging through the PLS or you may need to set aside additional time for training and other preparation. Software providers will be transitioning gradually to the PLS throughout the year. In fact, you may already be lodging some forms through the PLS channel. Your software provider will contact you to advise what you need to do to update your software, and if there are any additional steps that differ from your usual software update process.

Authenticate your software To ensure you can continue to lodge tax returns through the PLS, you need to make sure you authenticate your software. Your software provider can help guide you on what additional steps you need to take.

Online (cloud-based) software

If you use online SBR-enabled software, you will no longer use your AUSkey to interact with the ATO via your software. Prior to lodging via PLS, tax agents must advise the ATO of which online provider they are using via registering a unique ID code which is provided by the software provider. The registration process is completed via the ATO’s Access Manager portal. To ensure the correct software ID and service is selected, contact your software provider for more information.

Desktop software

With desktop software, you will be required to nominate your Auskey and location within your tax software. Once completed, tax agents must log in to the ATO’s Access Manager portal and select their software provider. Missing any one of the two step process will result in the ATO not accepting your tax forms.

Other software and the portals

This change doesn’t affect how you authenticate when using the portals, the electronic commerce interface (ECI) or any other AUSkey-enabled products. Maintaining access to the portals is essential as it allows you access to a range of tools, services and information about clients’ records.

It’s also important to note that SBR technology only works on recent operating systems. If you are using Windows XP, 98SE, ME, NT, 2000 or Server 2003, you must upgrade your operating system before you can lodge via PLS.

4 NAVIGATING THE PRACTITIONER LODGMENT SERVICE — A PRACTICAL GUIDE FOR ACCOUNTANTS

Add clients to your client list You must add new clients to your client list prior to lodging in PLS. If you don’t add the client to your list beforehand, you won’t be able to lodge on the clients’ behalf as your software will be unable to verify your link to the client.

You can add new clients to your client list using the client update service via ELS or PLS, or through the Tax Agent and BAS Agent portals. If updating via ELS, it may take overnight to process your request.

If you try to lodge for a client not correctly attached to your client list, you’ll receive an authorisation error.

Common reasons for authorisation errors in the PLS include:

• The client is not on your client list.

• The client is attached to a different registered agent number (RAN), if you have multiple RANs.

• The TFN or ABN is incorrect.

• You are not authorised for the relevant role or account

• Your AUSkey permissions have not been set.

You can check if a client is on your client list by using the portals. If the client is appearing on your client list but you are still experiencing an authorisation error, remove and re-add the client and try to lodge again.

Access client records You can continue to add new clients to your client list using the Tax Agent and BAS Agent portals. Depending on your tax preparation software, you may be able to manage your client list directly through your SBR-enabled software. You may also have the ability to manage client updates through a batch process. Your software provider will let you know if this option is available.

While Access Manager allows you to assign and manage permissions for your staff, you will also need to have adequate internal procedures and security controls in place to ensure access to records is strictly controlled.

“ Thomson Reuters is providing free PLS training and support to all our customers. We recommend all tax practitioners take advantage of similar training opportunities offered by their software provider. Attending PLS training sessions will ensure their practice is up and running with the new PLS process.”

- Darren Firman Support Analyst, Software Assistant Thomson Reuters Tax & Accounting

5 NAVIGATING THE PRACTITIONER LODGMENT SERVICE — A PRACTICAL GUIDE FOR ACCOUNTANTS

Changes when lodging via PLS The primary changes practitioners can expect when lodging through the new PLS channel include:

Pre-lodge check Pre-lodge checks will ensure the form you want to submit is filled out correctly and will be accepted by ATO systems. Pre-lodge checking in PLS can also confirm some of the data in the form, and your authority to lodge on the clients’ behalf. This improves security around updating client records, and reduce delays in processing submitted forms.

Verify your client’s information

Before you lodge, your SBR-enabled software can verify your client’s identity information with ATO records to ensure they are correct, preventing delays to processing returns or expected client refunds. Changes to your client’s details through PLS can be made in real-time and will be immediately reflected on our systems.

Error codes You may receive an error code during lodgment or pre-lodge check. These errors can relate to:

• Information missing or incorrectly placed on the form

• Authorisation issues

• Problems with the channel or form lodgment

If an error is found, the ATO has already or will reject the tax form. If a warning is generated, the tax form can still be lodged via PLS Like ELS, a warning is a reminder that something should be checked prior to lodging.

Lodgment verification Your lodgment verification experience may be different when you move to PLS. As such, your software provider will guide you on what to expect when you begin lodging through PLS.

Validation/transmission reports are no longer available in PLS. However, your software may provide you with some form of lodgment confirmation. If you have a query about a form you have lodged, you will need to provide the ATO with the client identifier when calling.

Transaction and response times

While the expected transaction and response times may vary depending on your software, internet connection and number of lodgments being submitted, it’s important to note that PLS speed will significantly differ from ELS. If you don’t receive a success or fail message after lodging a form, you should check the portal for a lodgment confirmation before trying to lodge again.

Duplicate lodgments To prevent lodgment of duplicate forms, make sure you follow your software provider’s lodgment verification process before re-submitting a form.

No more paper statements

Once an activity statement is lodged through the portals, SBR, ECI, ELS or a client links their myGov account to the ATO, the ATO will no longer issue paper activity statements.

6 NAVIGATING THE PRACTITIONER LODGMENT SERVICE — A PRACTICAL GUIDE FOR ACCOUNTANTS

TAKE ACTION 1. Find out how and when your software supplier is rolling out PLS.

2. Set up PLS as soon as possible. To do so, please refer to your software provider’s PLS getting started guide. If your software provides both ELS and PLS lodgement for some or all tax forms, we recommend you start using PLS as soon as possible and use ELS only as a safety net.

3. Set your expectations. PLS does not have the same performance as ELS, so be prepared as lodgment may take longer. Some software providers will provide both PLS and ELS services. Be an early adopter of PLS, but if it is slow or unstable, remember you have ELS to fall back onto.

4. Get acquainted with new PLS error/warnings. PLS does not use V Error codes like ELS. There is a whole new set of errors and warning terminology which you will need to learn.

5. Stay tuned. The ATO is beginning to provide new services which your software provider will be able to use in the coming year or two. Some of these are really exciting and include electronic assessments and calculations sent via PLS to the tax agent.

“ Changes are expected as ELS is gradually replaced with the new Practitioner Lodgment Service (PLS). What will set tax practitioners apart in this transition will be how well they have prepared coming into the 2017 busy period. Tax practitioners should start using PLS early to avoid potential downtime and un-billable hours. Remember preparation is everything when it comes to being successful.”

- Richard Puffe Senior Product Manager Professional Segment, Thomson Reuters Tax & Accounting

7 NAVIGATING THE PRACTITIONER LODGMENT SERVICE — A PRACTICAL GUIDE FOR ACCOUNTANTS

THOMSON REUTERS IS SBR AND PLS READY

Thomson Reuters flagship tax return solution for accountants, Tax Assistant, is fast, accurate and SBR-enabled. Constantly achieving an over 98 percent acceptance rate from the ATO, Tax Assistant features Tax Audit Alert — an advanced tax software feature that raises an alert if an individual’s work related expenses appears to be above the ATO average.

With Tax Assistant, you won’t be caught off guard by the transition to PLS. Thomson Reuters believes that a change to SBR-enabled software shouldn’t force you to upgrade existing equipment, we have designed our solution to be lightweight and easy to update.

TL31147

ABOUT THE AUTHOR

Richard PuffeSenior Product Manager Professional Segment, Thomson Reuters

Richard is passionate about making accounting simple for business owners who simply want to get on with running and growing their business. He has over 10 years of public accounting experience and 15 years of product management experience. As Senior Product Manager for Thomson Reuters, Richard is responsible for the strategic direction of the Professional Segment which includes Software Assistant and Onvio software solutions. Richard works closely with government agencies and Thomson Reuters clients to continuously bring innovative solutions to market. As a direct result of these relationships, Richard released a market-first tax feature called Tax Audit Alert.

Prior to Thomson Reuters, Richard worked at MYOB in various roles within the Accountants and Business division. Richard has applied his extensive general ledger knowledge across MYOB products in both Australia and New Zealand; developing several online accounting software initiatives, three of which are now MYOB patents.

Contact us on 1800 074 333 or email us for a demonstration info.anz@thomsonreuters.com.

Visit us at tax.thomsonreuters.com.au/software-assistant/