“Businesses just give up”: Government considers simplifying ATO dispute resolution process

The federal government is considering reforms which would make it easier for small businesses to resolve disputes with the Australian Taxation Office (ATO).

As part of a range of small business matters currently being considered by the government, Assistant Treasurer Stuart Robert is working on a way to streamline the relationship between small business and the ATO.

It comes after tax commissioner Chris Jordan told Senate estimates last Wednesday he wanted to “draw a line in the sand” with small business over criticism of the ATO’s conduct so the conversation can be “reset”.

Scrutiny over the ATO’s dealings with smaller firms has intensified following a Four Corners investigation revealed allegations of “bullying” by the ATO earlier this year.

“We’re looking at how the ATO can resolve disputes more amicably,” Robert said in a statement provided to SmartCompany.

The Australian Financial Review also reported on Monday morning Robert had directed the ATO to behave with “grace” towards small business.

Headaches with the ATO were singled out by small business and family enterprise ombudsman (ASBFEO) Kate Carnell during estimates last week when she was asked about issues raised with her over the last three months.

The Assistant Treasurer did not provide further detail on the plans, but reform has been welcomed by Tony Greco, general manager of technical policy at the Institute of Public Accountants.

Greco said businesses struggled with barriers to resolving disputes with the ATO, such as cost and time.

“A lot of small businesses just give up, saying its a cost of doing business,” he tells SmartCompany.

Greco says small business disputes are often different in nature to those involving larger firms, and dispute resolution should reflect this.

“We’d like a flexible approach to penalties that take into account the level of expertise a small business owner has versus someone that’s a larger entity,” he says.

“Fault on both sides”

Accountant Lisa Greig of Perigee Advisers says the system “needs to improve” for businesses which are trying to do the right thing but are falling victim to a complex system.

“There’s fault on both sides … the ATO also has to understand where they haven’t communicated effectively as well,” she tells SmartCompany.

Greig says she’d like to see the government look at adding more flexibility to the system which would promote dialogue between businesses and the ATO.

“Once there’s a potential dispute it would be fantastic if somehow the playing field is levelled again,” she says.

“As soon as the dialogue opens up, let’s clean the slate and have an open conversation about what we need to do.”

There are existing avenues for small businesses with complaints, including mediation, the inspector-general of taxation and an independent review pilot, which was set up in the wake of the Four Corners investigation.

Jordan said last Wednesday he wanted to have a relationship with small business which was effective for both parties.

“As the commissioner, I’m committed to a small business experience where we listen to and understand their individual circumstances, we simplify processes and offer streamlined pathways to resolve concerns and we differentiate our approach and offer tailored support,” he said.

“But of course we still have a job to do, and as custodians of the tax system we know that every market, including small business, will require our attention and our compliance efforts.”

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