Australian Bookkeepers Network BOOKIES BULLETIN 1

03BOOKIES BULLETIN2014

- NEW YEAR CHECKLIST WHAT YOU NEED TO KNOW

- WHAT MAKES A GREAT CONFERENCE?

FIND OUT INSIDE!

- YOUR ATO EXPERIENCESWE NEED YOUR INPUT!

...AND MUCH MORE!

Did you know? Reading this Bookies Bulletin counts towards your CPE hours! See what else counts towards your CPE by clicking here.

Australian Bookkeepers Network BOOKIES BULLETIN 1

DIRECTOR’S CORNER

Edition #03 2014

Bookies Bulletin produced bi-monthly by the Australian Bookkeepers Network

3rd Floor —Plaza Chambers 15 Dennis Road Springwood QLD 4127

E-mail: info@austbook.net

Postal Address: PO Box 1140 Springwood QLD 4127

Telephone: (07) 3290 4914

Fax: (07) 3290 3851

Company Information: Legal Title: Australian Bookkeepers Network Pty. Ltd. Australian Company Number: 096 035 648 Australian Business Number: 49 096 035 648

Disclaimer :

The information contained in this edition is current as at time of writing (July 2014). Information contained herein is general in nature and is intended to provide guidance to bookkeepers in providing bookkeeping services for their clients. It is not intended to be taken as a substitute for you or your clients seeking professional advice in relation to their own specific circumstances.

Copyright:

Except for use with other staff members or contractors of your bookkeeping firm, no part of this publication may be reproduced without the express permission of Australian Bookkeepers Network Pty.Ltd.

CONTENTS01 DIRECTOR’S CORNER

02 WHAT HAVE YOU DONE FOR ME LATELY?

03 NEW YEAR CHECKLIST

06 WHAT MAKES A GREAT CONFERENCE?

07 ABA

09 NUTS AND BOLTS

15 FIVE MINUTES WITH

If you’re anything like me, the moment you see an email hit your inbox that includes the word ‘survey’ in the subject line, you head straight for that delete button. Or, if you’re more optimistic, you’ll leave the email in your inbox with the intention of getting to it, only to wind up deleting it two weeks later because you missed the deadline.

I get it. Surveys can be time-consuming, irrelevant, and often offer participants little in return. But in a few weeks time, I’ll be wearing quite a different hat… In a few weeks time, I’ll be writing and sending out ABN’s annual Bookkeeping Business Benchmarking Survey.

As author of the survey, I’ll be reviewing and reworking survey questions to ensure I capture the most relevant data for 2013/2014. I’ll be updating survey formatting and functionality to make the participant experience as efficient as possible. And I’ll be racking my brain for the most enticing subject line, in the hope of keeping my email out of your Deleted Items folder and earning that ever valuable click through.

Those of you who know me, know how passionate I am about assisting bookkeepers build profitable and sustainable businesses. The data collected from the survey gives me the opportunity to focus on key areas that impact a bookkeeping business, particularly financial management and profitability. In return, participants who complete the survey in full are provided with a free copy of my final report—a document that has become an icon in the bookkeeping industry and an invaluable tool for any bookkeeper wanting to gain a better understanding of the industry and their position within it.

Historically your participation, which underpins the quality of the survey results, has been strong; I hope you can join me again this year. Until then, Happy New Financial Year and may the Bookkeeping Gods watch over you.

Kelvin Deer,ABN DIRECTOR

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WHAT HAVE YOU DONE FOR ME LATELY? ?

!

Representing Your Interests Australian Bookkeepers Association (ABA) with assistance from other industry bodies has made a detailed submission on a proposal by Innovation and Business Skills Australia (IBSA) to update the Certificate IV in Bookkeeping and Certificate IV in Accounting qualifications. By way of background, IBSA is one of eleven Industry Skills Councils authorised by the Federal Government to be an official voice on vocational education and training across six industries. Two of the main recommendations in the IBSA proposal are:

1. To change the content of the Certificate IV in Bookkeeping qualification (including making the accruals and accounting modules elective subjects rather than core subjects)

2. Or alternatively unifying the Certificate IV in Bookkeeping and Certificate IV in Accounting qualifications.

On the first proposal, while we welcome a review of the content of the Certificate IV Bookkeeping and made recommendations as to future content, we strongly opposed any changes that would ‘water-down’ or weaken this qualification.

We also opposed the second proposal principally on the basis that a unification would weaken both qualifications and not serve users of either qualification well.

ABN also made a detailed submission to Treasury on the aspects of the tax system that impede or discourage small businesses from growing. To view this submission, click here.

These submissions are another example of ABN and ABA providing their members with representation on issues that affect them in practice.

Giving You Technical Guidance

In July we sent you the latest edition of our monthly publication Getting Technical.

Although ABN already provides a wealth of in-depth technical material for members in the form of our Bookkeepers Knowledge Base (an unmatched library of more than 70 in-depth papers on the technical topics which

matter most to bookkeepers),we appreciate that from time to time, very specific technical issues arise that members need guidance on. Getting Technical fills that space.

Getting Technical provides concise, practical guidance on specific technical issues that bookkeepers face in practice. This latest edition focussed on the preparation of payment summaries.

Delivering you the best technical resources…that’s your ABN.

Improving Your Knowledge

In June, ABN and ABN Tax hosted an hour long webinar covering the important tax issues that will affect you and your clients heading towards the end of the financial year including:

1. tax planning considerations leading up to 30 June

2. tax changes affecting the new financial year3. live questions and answers.

Improving your knowledge…that’s your ABN.

Keeping You Up to DateOur Buzz publication recently alerted you the deferral of the Government’s SuperStream reforms. These new reforms will impact all businesses, and all bookkeepers who handle client superannuation.

Rest assured if there is a new development in the bookkeeping industry that you need to know about, we will deliver it speedily straight to your inbox via the Buzz.

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New Withholding Obligations

For those of you that handle payroll and pay suppliers, the increase to the Medicare Levy and the introduction of the Deficit Levy mean that there are now new withholding obligations for 2014/2015.

1. New TablesThere are now new PAYG withholding tables for 2014/2015. Generally speaking, these tables (including those for salary and wages, ETPs etc.) are for payments made ‘on or after 1 July 2014’. Therefore, even if some of the amount of the payment was earned before this date, the new tables will still be used for the whole of the payment if the actual payment was made ‘on or after 1 July 2014’. The new PAYG withholding tables are available for download on the Tax Office website. Visit www.ato.gov.au and then type ‘tax tables’ into the search box at the top of the page. Also note that new HELP repayment thresholds apply from 1 July 2014. These higher rates may require you to stop withholding HELP amounts from an employee from whom you withheld amounts in 2013/2014.

2. Increased WithholdingFor those who handle payroll and pay suppliers the increases to the ABN and TFN withholding rates will from 1 July require you to withhold additional tax (49% instead of 46.5%) where a supplier or employee does not quote their ABN or TFN respectively to your client when required to do so.

Payment Summaries

Payment Summaries must be provided to employees by 14 July.

For tips on payment summary preparation, see our Getting Technical publication which was emailed to members on 1 July.

It’s important to note that information cannot be changed on a payment summary after it has been given to an employee or the summary information has been sent to the Tax Office. If an error is detected after the information has been provided, the employer must complete a new payment summary, marking the Amending a Payment Summary box on the form itself. Amended payment summaries must be completed in full. Copies should then be provided to the employee and the Tax Office. The employer may then also need to complete an amended PAYG Payment Summary statement.

Also note that if an employee loses their payment summary, do not replace it with another payment summary. Instead, employers should provide employees with an endorsed photocopy of the employer’s copy of the summary.

New Year

1 July 2014 heralds the beginning of the 2014/2015 financial year. Following is a checklist of changes and upcoming obligations to be aware of as we head into the new year.

Checklist

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Superannuation Guarantee

For those of you that handle superannuation, employers must now pay superannuation guarantee (SG) at 9.5% for amounts (i.e. salary and wages) that they pay eligible workers on or after 1 July 2014 (up from 9.25%). This increase is already legislated.

Superannuation-inclusive Employment Agreements

Also note that even though the SG rate has increased to 9.5% this doesn’t necessarily mean extra costs for the employer. Under the law they may be able to, subject to the terms of the employment agreement, take the extra 0.25% SG from an employee’s existing salary and contribute it to superannuation (at no net cost to the employer). This will depend on the basis of an employee’s remuneration i.e. whether the agreed remuneration package is inclusive of SG payments. Where employees are strictly paid in terms of an Award, SG payments are typically paid plus ordinary time earnings – thus the employer must bear the cost of any SG increase. Speak to the employer about their approach to this issue.

Taxable Payments Annual Report

30 June 2014 sees the end of the second full year of the Taxable Payments Reporting Regime. If one of your clients is in the building and construction industry they may have to complete a Taxable Payments Annual Report and lodge it with the Tax Office by 21 July 2014. For comprehensive coverage of this topic, see our Bookkeepers Knowledge Base publication (Edition 72) in the Member Centre of our website.

There has been some disquiet among bookkeepers that the due date is too ‘tight’, particularly given all manner of other year-end obligations that must be met (including BAS, payment summary reporting, SG and compiling year-end information for accountants). These concerns have been communicated by us and other industry groups to the Tax Office in BAS Agent Advisory Group (BASAG) meetings, however at this point the due date remains 21 July.

Example

Gloria is the bookkeeper for Dave’s Hardware Store. Gloria pays superannuation guarantee amounts for the workers for the April to June quarter on 25 July (just before the 28 July deadline). Gloria wonders at which rate she should pay – 9.25% or 9.5%?

Answer

The 9.25% rate will apply as the salary and wages on which the SG amounts are calculated were paid before 1 July 2014. The rate is determined by when the employer actually makes the payment of salary/wages/allowances (in this case before 1 July 2014).

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Minimum Wage Increase

For those of you that handle payroll, be aware that from 1 July the minimum wage will increase by 3% from $622.20 per week to $640.90 per week.

You’ll need to apply the wage increase for employees from the first full pay period starting on or after 1 July. The increase only applies to employees that get their pay rates from:

• the national minimum wage • a modern award • a registered agreement (in some cases).

Not Going Ahead

Two important measures that were to impact bookkeepers from 1 July 2014 have been postponed!

1. SuperStream

For those of you that handle payroll and superannuation, the government has announced that the date by which superannuation funds and employers must comply with the new SuperStream contributions data standards has been pushed back.

All employers and superannuation funds will now have up to 1 July 2015 to meet the new standards.

By way of background, under SuperStream employers will be required to make superannuation contributions and report electronically. The contribution data will be sent electronically to the superannuation fund in a standard message format, and the contribution payment will be sent electronically through the banking system. The data message and payment will be linked by a payment reference number which enables reconciliation by the receiving superannuation fund.

Originally, employers with 20 or more employees were required to be SuperStream compliant by 1 July 2014, with smaller employers having an extra year until 1 July 2015.

The start date for all employers is now 1 July 2015.

2. 85% Lodgement Requirement

As we correctly advised you back in February, the Tax Office was considering imposing its 85% lodgement requirement on BAS Agents from 1 July 2014. Under this program, BAS Agents would be required to lodge 85% of their clients’ BAS by the lodgement program due date (or the deferred due date if an extension has been granted). Failure to do so over the course of the year may lead to you losing access to the lodgement program (and thus the extended due dates that apply for BAS Agents). This has now been deferred 12 months and looks set to commence from 1 July 2015.

Incidentally, the 2014/2015 BAS Agent Lodgement Program has now been released and is available on the Tax Office website.

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There is much noise and competition in the world of bookkeeping for industry events, a myriad of seminars, conferences, workshops, etc. all vying for your attention. With a minimum number of CPE hours required by associations and the TPB for registration purposes, and with the fast rate of change within the industry, there are numerous options for bookkeepers to stay up-to-date, learn new skills and fulfil their requirements.

Your time as a professional is precious and events also cost your hard-earned dollars. It can also take much planning to spend time away from your clients, who at times may think you work around the clock and are always on hand. Logistics can include flights, accommodation and transfers. It is a big decision deciding on which events to attend so you want to make sure you receive not only great value but enjoy a great experience and take a lot away from the event that you can use every day in your business.

So what is important in an event? For a lot of people, myself included, the content makes the conference—you are there to learn and good content is king! I would rate speakers next on the list—they must be entertaining, engaging, inspiring, knowledgeable and experts in their field. Ultimately the people and the atmosphere make the difference between a good conference and a great one. While the decision to invest in a conference is most likely driven by content and what you can learn, certainly having a little fun along the way makes for an enjoyable event. Networking opportunities also rate highly on many people’s lists.

ABN has been running conferences for almost ten years. From humble beginnings in Mudgee (2005), our biennial conference has grown to a well-respected event—our Melbourne conference (2012) was attended by close to 300 delegates. There is nothing better than the hum of conference planning taking place in our ABN office and there is currently plenty of humming! Our focus is always on providing the best delegate experience and ensuring that we stay true to the things that we value most about our conference: great content, great speakers, great learning, great networking and great fun!

What Makes a Great Conference?

In case you haven’t heard (and if you haven’t, where have you been???), we’re holding this year’s conference at Sea World on the Gold Coast from 17–19 October. The conference spans Friday and Saturday and closes around lunch time on Sunday. Your ticket price includes all sessions for the two and a half days (click here to see the agenda), 11 hours of CPE, all lunches, morning and afternoon teas, breakfast on Saturday morning, dinner and drinks on both Friday and Saturday nights, and some fun entertainment throughout the event! It is important to provide lots of value for our delegates and we are very happy to have kept registration costs affordable, especially if you take advantage of the early bird registration. (Better hurry though—that closes 14 July!)

Like all events, the support of sponsors is crucial to maintaining affordability. At conference this year we are pleased to see all of the major software houses supporting the event including Xero, Attache, Reckon, Myob and Intuit. What a great opportunity to chat to all the software houses under the one roof! We also welcome Sunsuper to our supporters; anyone with Superstream questions, get them ready!

We would love to welcome you to conference this year. Feel free to contact us if you want to hear a lot more reasons why you should attend what we believe will be 2014’s most memorable bookkeeping event. Personally I can’t wait to visit the sharks in Shark Cove (from the outside of the tank of course!). Sea World truly is a magical place, in a beautiful part of the world. Remember to take advantage of early bird and secure your ticket, as registrations are streaming in! See you there!

Kellie Powell, ABN Director

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ABA—Your VoiceAustralian Bookkeepers Association—representing the bookkeepers and BAS agents of Australia

BASAAG Consultative Forum (8 May 2014)

The BAS Agents Association Group meeting was chaired by new Chairman Mr Colin Walker, Assistant Commission of Taxation and was held on Tuesday 8 May 2014 by videoconference and audiolink, with the following points of most relevance:

BAS Agent Portal: The Tax Office is conducting a sweeping review of its electronic interaction with agents and taxpayers generally. The Portal functionality will be comprehensively reviewed in preparation for an improved electronic interaction with agents.

Clients dropping off ATO lists: The Tax office has investigated the difficulty BAS Agents were experiencing when Tax Agents interacted with the Tax Agents portal and inadvertently removed a BAS Agent. Improvements have been made to messaging received by tax agents within their portal when they updated a client’s status to rectify the irritant. Also broadcast messaging has been sent to tax agents. We can report that it is still mechanically possible for this irritant to occur so we would be pleased to receive feedback from members as to whether they continue to experience this problem.

Portal Availability: As we all know the Portal has stability issues and agents seem to be experiencing downtime for scheduled and unscheduled maintenance. The Tax Office is looking at their current messaging including SMS (hands up if your mobile phone has gone off at 2am to tell you that the Portal is now back on line); notice periods etc.

Paper Activity Statements: As we previously flagged, from 1 July 2014 paper BAS forms will cease to be sent to you and/or clients where they have had previous electronic interaction. There are exceptions (Q: Annual GST report, R: Quarterly PAYG instalment notice, S: Quarterly GST instalment notice, T: Quarterly GST and PAYG instalment notice). The Tax Office will also attempt to identify those that have a split lodgement history e.g. paper monthly IAS and electronic quarterly BAS. Tax agents interacting electronically (e.g. amendments) may also interrupt the supply of paper returns to those accustomed to receiving them. It is quite possible in this new environment that clients may miss their BAS obligations as they were relying on the receipt of a paper BAS as a call to action. Some tips from the Tax Office:

• Understand the relevant activity statement lodgement dates

• Use your own systems, calendars, reminders spreadsheets etc to prompt lodgement dates

• Build Your small business tax calendar (Tax Office Tool)

• Use the receipt of statements from your financial institution to help you plan when activity statements are due

• Talk to your peers

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Consider also:

• Using lodgement software such as Gov Reports that has excellent features that will also assist in monitoring

• Using CRM systems such as the HUB that also allow scheduling and planning of lodgements

• Where a client ceases to receive an activity statement but wishes to receive them, contact can be made with the Tax Office to restore them

• Where a client receives a penalty for failure to lodge (precipitated by the non-receipt of an activity statement) consider contacting the Tax Office and requesting remission.

More Contemporary Services and Client Experiences: The Tax Office have confirmed their commitment to reinvention and transforming their organisation to ensure it is contemporary and service oriented. This is an admirable goal and at BASAG we will have input into that process. To this end the Tax Office have stated “In the future:

• A taxpayer’s experience with the tax and super systems will be streamlined and tailored based on our knowledge of their tax and super affairs.

• We will reward transparency and willingness to participate in the tax and super systems with less effort required to comply and greater certainty about the status of tax and super affairs.

• Taxpayers will experience more flexible and contemporary services.

• We will make greater use of taxpayers’ natural systems.

• We will work across government.

• We will continue to use analytics more effectively.”

As a start the Tax Office has joined the myGov platform and this year will allow the simplified lodgement of some Tax Returns. There has also been the release of the TaxTime app.

TPB Consultative Forum (20 May 2014)

The Tax Practitioners Board Consultative Forum chaired by Ian Taylor (TPB Chair) and attended by professional associations including ABA considered a range of issues including the following points of significance:

• Registrations: The Board continues to receive a steady number of new BAS Agent applications as well as renewal applications. Applications are being processed within their service standards with exceptions generally caused by incomplete applications.

• Budget Bites: The TPB has indicated the recent budgetary tightening may impact their delivery standards especially given increased workloads from such projects as the financial planner registration regime that commenced recently.

• Reminder Renewal: It is important that agents lodge their renewal applications at least 30 days before expiry and in a complete state otherwise smooth re-registration could be compromised.

• Outreach Series: The TPB have continued their Outreach events including in the ACT and Queensland, which have been well attended and from all reports well received.

• Financial Planners Join TASA: Financial Planners offering incidental taxation advice to their financial planning services will be required to meet obligations including registration under the Tax Agents Services Act from 1 July 2014.

Peter Thorp ABA Director

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NUTS & BOLTSKey Dates

Monday 21 July

Taxable Payments Annual Report - due for lodgement

Monday 28 July•April – June Quarterly Activity Statement – due for lodgement and payment (if lodging by paper).

•April – June Superannuation Guarantee contributions - due for payment

Monday 21 July June monthly Activity Statement – due date for lodgement and payment

Monday 14 July

2013/2014 Payment Summaries

to be issued to employees

Note: Where the due date falls on a weekend or a public

holiday, the due date is extended to the next business day.

Clients in Financial Strife

Most bookkeepers would at some stage have come across clients who find themselves in serious financial difficultly, even if they are not strictly insolvent. Recently we had the following question come to us through our free Q and A Helpline Service:

A client that I took on in January 2014 I believe may soon be trading insolvent.

With their current ATO debt, loan from parent organisation and also outstanding Creditors, there is quite a sum owing, nearly $1 million. It is my belief that they can’t cover the debts that they have accumulated and are trading insolvent. They, however, think otherwise.

I would like to formalise this however (I have verbalised it in at a management meeting). I am hoping that you can assist with some kind of advice/letter for this.

There are many complex issues surrounding insolvency specifically and client financial difficulty generally. From a bookkeeper standpoint these issues include:

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NUTS & BOLTS

1. Legal Ability to Advise

In simple terms insolvency is the inability of a debtor to pay their debts when they are due. Insolvent trading may occur when an entity takes on a new debt when it has reasonable grounds to suspect that the business is already insolvent. Insolvent trading is only illegal for companies – other structures are not caught by the insolvent trading rules. If a company trades insolvent, directors may be liable for the debts incurred and for fines of up to $200 000 and five years imprisonment.

Insolvency is a complex area and outside the scope of a BAS Agent’s expertise (nor is it a BAS Agent service or Tax Agent service). Moreover, your PI insurance would likely not provide protection for you if you were to advise incorrectly in this area. If advice is needed on insolvency, you can redirect your client to an insolvency practitioner, who can then conduct a solvency review of your client’s business and outline available options. These options may include refinancing, restructuring or changing the business activities or appointing an external administrator.

2. Your Broader Obligations

The starting point for your obligations owed to a client is the Engagement Letter. A good engagement letter will clearly define your role, for example:

• Preparation of BAS for entity X, Y and Z• Dealing with payroll, including superannuation guarantee• Paying suppliers • Regular financial reporting to clients• Preparation of year-end financial packages for the client’s accountant• General data entry in computerised accounting systems• Reconciliations for bank, credits cards, loans etc.

Giving specific advice on the financial health or solvency of a client’s business is very unlikely to be part of your specific obligations as defined in your engagement letter, and is likely outside the scope of your expertise anyway. More broadly however, many clients rely on their bookkeeper as a trusted advisor, with bookkeepers in turn rightly seeing themselves as partners in the success of their client’s businesses. Moreover, as a bookkeeper you are well placed to assess the general financial health of your client’s business. As a BAS Agent, you also have a general Code of Conduct duty to act in the best interests of your clients.

In view of all this, if in the course of performing the tasks you have been engaged to provide, it comes to your attention that your client is in financial difficulty and is unable to pay some of its debts that are due, you arguably have a general duty to advise the client of this. Signs that a client may be in financial difficulty include:

• Increasing debt• Poor cashflow• Unpaid superannuation guarantee• Increased level of supplier complaints• Issuing post-dated cheques or dishonouring cheques• Unpaid creditors outside usual trading terms• Unpaid tax debts• Difficulty obtaining finance, and• Ongoing losses.

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NUTS & BOLTS

To be clear, you have no duty to undertake a mini audit of your client’s business to assess its health or deem whether they are solvent. Rather if in the course of providing your services as outlined in your Engagement Letter it comes to your attention that there signs of financial difficulty (see above list), then this should be communicated to the client. Often clients while they have a general idea of the financial health of their business may be unaware that their business is in real financial difficulty and is struggling to pay its debts. At this point, you may also recommend to them that they obtain proper accounting advice (and legal advice if there are solvency issues) as early as possible, as this increases the likelihood of the business surviving.

3. Getting Paid

Most clients in financial difficulty have unpaid creditors – as their bookkeeper be careful to ensure you don’t become one of these! For clients in financial difficulty, you may wish to consider billing them at regular intervals if you do not already do so, and not continuing to do work for them while amounts are outstanding.

We Want Your Input!As part of our commitment to providing representation for our members, ABN will soon be making a submission to the Inspector General of Taxation’s recently announced review into the Tax Office’s services and support for tax practitioners. But, before we do so, we want to hear from the people on the front line…you!

What are the key ATO services that you use to perform your work as a BAS Agent?

What has been your experience in accessing and using these services?

What improvements could be made to the ATO’s services to better assist you to perform your role and reduce your costs? Please explain your suggestions.

How could the ATO improve or change its lodgment program to reduce adverse impacts and encourage greater compliance?

Email us your thoughts at info@austbook.net.

To view the full terms of reference, visit the Inspector General’s website. We will publish our submission on our website in July.

Debt Collection – What to Expect from the Tax OfficeThe Tax Office has requested that we pass on the following communique to our members:

The ATO have been using external debt collection agencies since 2006.

The referral of debts to these agencies helps the ATO manage the large volume of small debt cases, which complements its own collection activities. It also provides more opportunity to re-engage with taxpayers who have not responded to the ATO’s previous efforts to work with them in resolving their debts.

The agencies are authorised to negotiate payment, in full or by instalments, using letters and phone calls to do this.

When agency staff call to negotiate payment of a debt, they use the number listed on ATO records for the primary contact. If you are the authorised primary contact for any of these taxpayers, it could be you who they contact. If the contact phone number clearly belongs to a registered agent, you will only be called during business hours.

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NUTS & BOLTS

A Stricter ApproachOn the topic of debt collection more generally, there’s no doubt that in recent times, the Tax Office have taken a stricter approach to collection practices. During the Global Financial Crisis (GFC) the Tax Office took a more lenient approach to debt collection, particularly in relation to business. However, with the GFC now having passed, the Tax Office has announced that it will be more hard-line in this area. This new approach was formalised during the year with the release of the Tax Office publication Firmer action approach to debt collection which is summarised below. You may wish to make this available to your clients who are regularly in debt with the Tax Office:

WhenisfirmeractiontakenbytheTaxOffice?

• You choose not to work with the Tax Office despite multiple attempts to contact you.

• You have entered into a payment arrangement, and repeatedly default on that arrangement.

• Your debt is escalating and there is no evidence that you will be able to meet it.

• You have been subjected to an audit where deliberate avoidance was found and payment avoidance is continuing.

• For businesses, there is evidence that liquidation may be used to avoid financial obligations with the intention of resuming operations through a new entity.

Whatis“firmeraction”? • Issuing a notice to a third party who owes you money, requiring them to pay that amount to the Tax Office instead.

• Initiating bankruptcy or wind-up proceedings, beginning with the issuing of a summons/statutory demand.

• Pursuing company directors personally through the director penalty notice regime for unpaid superannuation and PAYG withholding.

• Issuing a writ/warrant of execution authorising the seizure and sale of your property to pay a judgement debt plus costs.

• In rare circumstances, requiring you to pay a bond or provide security for a debt that the Tax Office deems is at risk of not being paid.

What can you do to avoid firmeractionbeingtaken?

• Pay the debt in full. • Make an agreed lump sum payment towards your debt and enter into a

payment arrangement for the remainder of the debt. • Businesses may need to demonstrate their viability before firmer action is

deferred.

Paper BASAs we’ve advised previously, from 1 July the Tax Office will no longer send out paper activity statements for taxpayers whose activity statements are lodged electronically unless advised otherwise. From this date, the Tax Office will send paper activity statements until they receive an electronic lodgement. Once this is received, the next activity statement generated will not be sent as paper. Electronic revisions by BAS Agents made after 1 July will also trigger the cessation of paper BAS.

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NUTS & BOLTSThe cessation of paper BAS will particularly impact clients who:

• Lodge monthly IAS by paper, and use a BAS Agent to lodge their quarterly BAS, as a single electronic lodgement may result in the next monthly IAS being issued electronically

• Use a BAS Agent for a one-off lodgement, as a single electronic lodgement may also result in the next BAS being issued electronically.

In these situations, the Tax Office advises that where it identifies clients who have an established pattern of lodging monthly paper activity statements and quarterly electronic activity statements (including via a BAS Agent or Tax Agent) they will exclude the client from the change to electronic BAS initially. However, clients will need to have their activity statement lodgments up to date to be excluded from the change.

If you or your client wishes to keep receiving paper BAS from 1 July, we recommend that where an electronic BAS is lodged (or amended electronically) from 1 July, you contact the Tax Office to ensure that paper BAS continue to be sent as there are bound to be some clients that the Tax Office systems do not exclude who wish to be excluded from the move away from paper, particularly those whose lodgements are not up to date.

Casual WorkersFor time to time we receive enquiries from members in relation to casual employment, with the most common question being: how does my client determine if a worker is casual? This matters as casual employees are generally not entitled to paid leave (important for those of you that handle payroll) or notice of termination.

Determining whether a worker is casual is made more difficult by the Fair Work Act which does not contain a definition of ‘casual’. From case law over the years however the following factors indicate that a worker is full-time or part-time, and therefore not casually employed:

• There is a mutual expectation of continued employment• The employee’s hours of work are determined in advance• There is a set starting and finishing time• Notice must be given by the employee when taking leave of absence• The employee’s weekly hours are relatively constant • The method of payment of wages (if the same as other full-time or part-time employees, this may indicate

that the worker is not casual)• The employee’s length of service.

Note that with casual workers the situation is often fluid, and the classification may change. Employers therefore need to monitor casual employees’ work arrangements on a regular basis to ensure they are properly categorised and therefore the appropriate employment entitlements are being provided.

Your Tax DebtsIn a recent meeting of the ATO Practitioner Advisory Group (ATPAG) (in Melbourne on 16 May) the Tax Office advised that a number of registered BAS Agents and Tax Agents have been found to have personal Tax Office debt. Because of their standing in the community and the influence they have over the affairs of their clients, the Tax Office expects high standards of compliance with personal tax debt from registered practitioners. Moreover, under the Conduct of Conduct pursuant to the Tax Agent Service Act, BAS Agents must comply with the taxation laws in the conduct of their personal affairs. This includes not only having your lodgements up to date, but also ensuring that you pay debts on time or at least have entered into a payment arrangement with the Tax Office to pay those debts.

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NUTS & BOLTSIn the ATPAG meeting the Tax Office advised that it has identified those with personal tax debt and intends to contact these practitioners to discuss payment options. Unsuccessful negotiations may lead to them contacting the Tax Practitioners Board about possible Code of Conduct breaches in relation to these matters. If you have a personal tax debt you are encouraged to pay that debt or contact the Tax Office to make arrangements to pay.

The consequences of badly breaching this Code of Conduct item were highlighted in a recent Administrative Appeals Tribunal (AAT) case [2014] AATA 260 Re Cleary v Tax Practitioners Board where the AAT increased the period of suspension of the agent’s

registration from three months to 12 months. By way of background, in May 2013 the Tax Practitioners Board notified the agent of its decision to suspend his registration for a period of three months. The agent appealed to the AAT.

In the tribunal appeal the agent did not dispute the details of his Code of Conduct breaches which included:

• Failing to lodge his personal 2009 and 2011 income tax returns by the due dates• Failing to lodge his BAS for whole period of 1 July 2011 to 30 September 2012 by the due dates• Failing to lodge partnership income tax returns for 2010 and 2011 by the due dates• Failing to lodge partnership BAS for July 2011 to September 2012 quarters by the due dates• Failing to pay personal tax debts by the due date, and• Failing to pay employer superannuation contributions during 2007, 2010 and 2012.

In his defence, the agent stated that he had not complied because of the cost and issues arising from his wife’s spinal surgery treatments, lack of finances, and also his agent workload. The AAT rejected these defences and increased his period of suspension to 12 months noting that he:

• Had not taken any steps to avoid breaches or attend to ongoing breaches• Had not shown any remorse, and• Did not appreciate the seriousness of his breaches.

Although this is a somewhat extreme case involving multiple breaches it does illustrate (a) the information sharing that goes on between the Tax Office and the Tax Practitioners Board (b) that outstanding personal tax debts are breaches of the Code just as much as outstanding lodgements and (c) the profound sanctions that can be imposed by the Board where this Code item is breached. Many businesses would be unable to survive if they were forced to close for three months, let alone one year.

Your ServicesWith the advent and now widespread use of Cloud Accounting, the bookkeeper’s traditional role of general data entry is being increasingly eroded. One of the points to fall out of our 2013 Bookkeeping Business Benchmark Report was the heavy reliance on this service as a stream of revenue. General data entry accounted for 30% of revenue with nearly 95% of respondents offering this service.

As a consequence of Cloud Accounting, general data entry is becoming increasingly automated, although there often does remain the need for human intervention in this process. Prudent bookkeeper’s who have a heavy reliance on this stream of revenue will review their business model perhaps with a view to expanding their menu of services (such as commencing to offer payroll services, general telephone support for client bookkeeping queries, software training to clients, preparation of year-end financial packages to the client’s accountant etc.) or alternatively increasing your average fees per client by offering some of your existing services to them. Often your “A class” clients are willing to acquire more services.

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Name: Vija Platacis

Business Name: Wizards in Effective Business Solutions (WEBS)

Title: Reckon Accredited Consultant

Location: Chadstone, VIC

ABN Member Since: 2003

Favourite ABN service: Bookkeepers Knowledge Base – provides background, theory and then practical examples on topics relevant to bookkeeping.

5 MINUTES WITH...Vija Platacis

Let’s start with a personal introduction—tell us a bit about yourself.

Happily married to the Managing Director of WEBS, who supports all my computers so I have been able to run 15 years of Reckon software on all the Windows operating systems.

How did you get started in the bookkeeping industry?

Accidentally—I had no intention of being a bookkeeper or running a business.

The guy across the road is a builder and every weekend we would have neighbourhood drinks together and listen to him moan about how tough it was to be a builder. He would go on and on about his customers, contractors and how hard it was to do the bookwork. I said the bookwork couldn’t be that hard, so he said well you do it then. Fine! I started his bookwork that week.

He took his books to his accountant for the tax return, who then wanted me to see his other clients. The neighbour also told other contractors at each site he worked at. They all used Reckon Accounts (previously known as QuickBooks). I was forever ringing Reckon, as entering transactions was easy, but fixing some of the mistakes was challenging. They suggested I become a Reckon Accredited Consultant.

Tell us about your bookkeeping practice. What services do you offer, what is the industry like in your area, etc.?

I help people. Clients come, go and then come back again when the next problem/query arises.

For small and big businesses I offer training, reviewing, lodgments, upgrading software, and help with ad hoc queries about unusual transactions.

I answer questions for other bookkeepers/BAS agents/Reckon Partners, who all have their own businesses and strong bookkeeping knowledge, but can’t always get Reckon Accounts to provide the results they are expecting.

For tax agents, I teach them how to open a client’s data file or produce a particular report. I review data files, visit their clients and re-train them.

For industry organisations, I review, edit and help keep their classroom training manuals and technical resources up-to-date.

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ABN Coffee Clubs

ABN members are automatically notified by email when there is an ABN Coffee Club meeting in their area. Non-members can subscribe to notifications by visiting the News & Events page page of the ABN website.

What is your opinion on the growth of the bookkeeping profession? How has it changed since you first started bookkeeping?

In the early years bookwork was only done by a business when prompted by their accountant, and therefore was sometimes years late. When GST arrived bookwork was required in a more timely manner. Then contract bookkeepers needed to become registered BAS agents. Many new software vendors arrived, offering different solutions. Now I see accounting firms under ever-increasing pressure to meet their lodgment timeframes and needing high quality bookwork even more quickly.

What makes you passionate about bookkeeping?

I’m not passionate about bookkeeping as such, more about helping people overcome difficulties with their bookwork and make informed decisions. It is sad seeing a business go bankrupt.

Do have any marketing tips or tricks you would like to share?

I have never done any marketing. But when a client hires me to produce something for their accountant, I always contact their accountant and discuss what they need to complete the task.

What have you gained from your ABN membership?

Information to keep me up-to-date with all the changes in legislation, as well as support to become a BAS agent and ongoing encouragement. Many people still blame the messenger when the news is not to their liking.

Tell us what ABN Coffee Clubs are about for you.

Networking is important. I have learnt that I don’t have to know everything, just know others who know more than I do. I can then draw upon these contacts to put the client in touch with the right person.

What advice would you give network leaders about managing Coffee Clubs?

Further to my point above, I would say introduce people and help them identify what others specialise in.

What essential advice do you have for other bookkeepers?

I think bookkeeping is like doing a jigsaw without seeing the end picture. You will meet clients who like to start the jigsaw (and invariably put a few pieces in the wrong spot). Many accountants like to put in the last pieces and finish the jigsaw. That’s OK, we are a team and the jigsaw has enough pieces for us all. When you meet a client who hides pieces (or worse still, throws pieces away), explain the impact of that. Remember it is their business—it is up to them. If they do it again, look after yourself and your BAS agent registration. No stress, just walk away. There are always others you can help.