Announced by Prime Minister Scott Morrison late last year, the pilot phase of the national tax clinic program has now passed its three-month mark, with advice provided to 86 individuals and 55 small businesses on tax-related matters.
The clinics, run in conjunction with 10 universities across the country, are a government-funded initiative designed to provide free advice and support to unrepresented small businesses and individuals to help them understand and comply with their tax and super obligations.
The pilot program is set to be completed by March 2020.
The 10 universities include the University of New South Wales, Western Sydney University, Australian National University, Melbourne University, University of Tasmania, University of South Australia, Curtin University, Charles Darwin University, James Cook University and Griffith University.
The clinics have now collectively conducted educative sessions to over 170 people through public seminars on various tax and lodgement topics, and represented 64 individuals and 37 small businesses either directly or through professional pro bono relationships.
While the ATO has been funded to administer the trial, including through the provision of grants to the selected universities, reporting back to government on the progress of the trial, and coordinating an independent evaluation of the trial, it is not involved in the daily operations of the tax clinics.
‘Not competing with accountants’
A key feature of the tax clinics is that it serves unrepresented and low-income taxpayers who are unable to afford professional advice.
The ATO sees tax clinics as having a similar relationship with the tax and accounting profession as community legal centres have with the legal profession.
“By focusing on unrepresented and lower-income clients, the clinics will address an acknowledged gap in the market and are not intended or expected to compete with professional tax advisers and accountants,” said ATO second commissioner Andrew Mills earlier this year.
Speaking to Accountants Daily, Western Sydney University (WSU) lecturer Connie Vitale said resolving 47 issues over the last four weeks shows how there is a real need for such clinics in the community.
“I think there is some stigma that this was set up to take work away from accountants, and this is definitely isn’t about that,” Ms Vitale said.
“It needs to be clear that we are not trying to take work away from other accountants, where this is clearly designed to providing services for unrepresented, low-income taxpayers that are individuals, sole traders or partnerships.
“Tax clinics are more than happy to refer on anything that falls outside of the scope of what we can deal with.”
According to Ms Vitale, most issues she and her students see include non-lodgement of prior-year returns and letters received from the ATO.
“What we’re seeing is taxpayers that have been fearful to actually complete issues that they have outstanding and they see the tax clinic as a safe place to come to resolve those issues,” Ms Vitale said.
“We’ve been able to help them by either making a phone call and clarifying the situation with the ATO or whether it was just simply a case of showing them how to complete their own tax returns.
“We lodge the returns through myGov and we sit next to them and they complete the returns so they are educated on how to do that and hopefully it gives them a sense of independence so they can do it on their own the following year.
“The whole idea of the clinic is to provide education to the public and education to the students working in the clinic.”
From theory to practice
Taxpayers are not the only ones set to benefit from the clinics, with accounting students now afforded a taste of working in an accounting practice.
At WSU, students are required to have a GPA above 4.0, completed a taxation law course and undergo an interview before securing a spot as a tax clinic adviser.
Students that make the cut spend a minimum of 14 weeks in the clinic, including four hours per week helping clients and a further two hours learning the ins and outs of working in a tax practice, including soft skills and the use of accounting software — Sage, in the case of WSU.
The work is graded as an internship and counts towards a student’s coursework.
“It’s a real advantage for students to be able to actually be prepared by applying some practical skills to a lot of the theory that they’ve learnt at university. Universities deliver a lot of theoretical subjects but not a lot of practical skills, so this allows us to give them those practical skills which are fundamental for them to become employed,” Ms Vitale said.
“I think it also benefits the tax profession because they will be having students graduating that actually have some experience.
“From a student’s perspective, I think it is going to be a fundamental part of their career readiness development, and they are really learning the conversion from theory to practice, and being given the opportunity to deal with the public in real-life situations is just invaluable.”