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From 100A to exam cheats and director IDs … Oh, what a year!

Tax

What were the biggest stories in the tax profession in 2022? Accountants Daily picks its top five.

By Philip King 13 minute read

When you think about the big news stories this year, you might bring to mind the first time Labor has held federal office in almost a decade, the surprising – to the RBA – rise in inflation or the widespread, devastating floods. Looking further afield, Russia’s invasion of Ukraine remains front-of-mind along with near-revolution in Iran, while Britain lost its longest serving monarch.

However, if you weren’t reading Accountants Daily then you would have missed some of the really big stories. In the tax profession, at least.

Here are five of the best, judging by audience traffic, the quantity (or vehemence) of comments or the sheer number of times they were featured on the Accountants Daily website.

How do yours compare?

  1. COVID has gone but the ATO is back! … and so are DPNs

You could – and can – still catch COVID of course but there’s nothing like the ATO drawing a line in the sand over debt to say the old normal has returned, with a vengeance. We all owe squillions after two years of ATO hibernation and small business is responsible for the lion’s share – $29 billion of collectable debt from a $45 billion total.

So in March, the ATO began dispatching letters warning of imminent director penalty notices to 52,000 company officials. It also started deploying a new weapon: credit agency referrals for amounts of $100,000 and above.

By May, it was issuing actual DPNs at the rate of 30-40 a day, gradually accelerating to hundreds a day by the end of the year. Insolvencies returned to pre-pandemic levels too, and if predictions of a tsunami proved overblown there are plenty who believe the worst is yet to come with the construction industry in the front line.

When Accountants Daily got wind of the warning letters in early April, the story became our single most visited for 2022.  

4 April https://www.accountantsdaily.com.au/tax-compliance/16848-ato-puts-50-000-directors-on-notice

27 April https://www.accountantsdaily.com.au/tax-compliance/16938-time-running-out-for-50-000-nervous-directors-with-ato-debt

13 May https://www.accountantsdaily.com.au/tax-compliance/16998-ato-issuing-30-40-penalty-notices-a-day-and-rising

  1. Work from home for 67c an hour, and keep more records

One hangover from the pandemic regime was the shortcut method of claiming work-from-home expenses, worth 80c an hour. When it ended in the new financial year there was a void until early November when the ATO laid out revised rules in PCG 2022/D4.

The new fixed rate of 67c an hour replaces the previous shortcut 80c and the hybrid 52c methods while retaining the option of using actual costs.

However, record keeping is now more burdensome, especially with stringent requirements from 1 January.

Few in the profession thought the ATO revisions well judged, saying they were “opaque”, “complicated” and “demanding” while leaving taxpayers worse off.

For Accountants Daily it meant another big traffic spike. Now readers have the task of telling clients the good news.

2 November https://www.accountantsdaily.com.au/tax-compliance/17764-ato-releases-revised-wfh-expense-claims-guidance

10 November https://www.accountantsdaily.com.au/tax-compliance/17791-wfh-67c-fixed-rate-opaque-and-too-demanding

  1. The never-ending sign-up for director IDs

When you consider that director IDs are foundation stones in the plan to build dozens of business registers into one digital Taj Mahal, you have to wonder if it will ever get finished. But the noise of construction was a constant irritant, judging by readers’ comments.

And it did look as though the architect had overlooked a few details. What happens to directors who couldn’t, or wouldn’t, apply online? What about those overseas, or even deceased? How about officers who had resigned and had no intention of becoming a director again?

As the deadline neared and hundreds of thousands had yet to apply, plans were hastily redrawn, taking in some retrospective legislation and culminating in a deadline extension by two weeks. The result: half a million directors still not listed, possibly facing fines.

The slow sign-up process featured often in our news and invariably drew readers, but cut to the chase with the links below.

16 November https://www.accountantsdaily.com.au/regulation/17818-ato-ditches-november-id-deadline-for-resigned-directors

30 November https://www.accountantsdaily.com.au/regulation/17883-abrs-extends-director-id-deadline-by-two-weeks

  1. Everybody’s favourite trust distribution guidance

The ATO usually does a good job of getting the professional bodies on-side before releasing guidance, but with its section 100A trust distributions draft ruling and PCG something went badly wrong. A root-and-branch chorus of disapproval echoed through the industry and even reached the ears of politicians on both sides of the house.

To many, it was a declaration of war on family trusts and tore up years of tacit understanding about how they would conduct their affairs. The PCG raised as many questions as it answered, with four confusing coloured risk zones and a set of examples that left most scratching their heads about where they fitted, if at all.

Critics accused the ATO of too little, too late after years of requests for guidance or of jumping the gun by failing to wait for a key legal decision in the pertinent Guardian AIT case. Others said the ATO had moved the goalposts on what was acceptable or had stepped beyond its remit in extending the purpose of 100A and, in effective, rewriting the law. There were concerns about  retrospective application and the threat of promoter penalties.

The ATO did its best to avoid appearing defensive and responded with an extension to the consultation period, additional examples and dropping one of the zones.

But in its final ruling, released in early December, it stuck to its guns and even introduced fresh concerns, such as whether accountants would be viewed as party to an agreement that was subject to 100A. And the core of the matter, what constitutes an “ordinary family or commercial dealing”, seems no closer to resolution.

For Accountants Daily and our readers, there’s no question it was the single most significant tax story of 2022. Here’s a small sample of the coverage:

7 March https://www.accountantsdaily.com.au/tax-compliance/16745-accountants-give-ato-100a-draft-the-thumbs-down

14 March https://www.accountantsdaily.com.au/tax-compliance/16775-mum-and-dad-businesses-blindsided-by-ato-trust-ruling-says-ntaa

5 May https://www.accountantsdaily.com.au/tax-compliance/16957-weaponised-100a-needs-a-rewrite-ca-anz

  1. Call that a scandal? Now this is a scandal

There’s no shortage of frustration with the professional bodies among those in public practice and the KPMG exam scandal, in which hundreds of its staff are acknowledged to have cheated, proved the catalyst for the year’s angriest reader comments. In responding to the scandal, CA ANZ waited for the result of a US investigation and then sanctioned just eight unnamed members.

That delay and seemingly light reproach drew accusations that CA ANZ was overly beholden to the big four, with one rule for them and another for everyone else. It had turned a blind eye to exam cheating for years, it was alleged, and now let the culprits off with slapped wrists.

Some viewed it as a failure of CA ANZ’s leadership team, which defended itself robustly first by answering every question by reference to its byelaws and then by calling in the lawyers themselves. That put paid to one member’s declared goal of unseating the board at the October AGM. However, it failed to prevent a surprising defeat for an AGM move to increase directors pay by almost 16 per cent.

Another story that ran and ran in Accountants Daily, we will look forward with interest to developments next year.

19 July https://www.accountantsdaily.com.au/regulation/17306-ca-anz-defends-handling-of-kpmg-case

20 July https://www.accountantsdaily.com.au/regulation/17313-angry-members-slam-shameful-ca-anz-discipline-secrecy

22 July https://www.accountantsdaily.com.au/regulation/17322-outraged-ca-anz-member-plans-agm-assault-on-board

25 October https://www.accountantsdaily.com.au/regulation/17724-ca-anz-pay-vote-a-chance-to-channel-frustration

1 November https://www.accountantsdaily.com.au/regulation/17755-ca-anz-members-decisively-reject-pay-rise-for-directors

 

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

You can email Philip on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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