Review of private advice

Consultation stage has concluded

Review of Private Advice - Findings report reflects community feedback received between October 2015 and December 2015.


We are undertaking a review of how we provide private advice, which is the tailored technical assistance we provide clients when they request advice on how the law applies to their specific circumstances.

The feedback we received during the consultation stage will feed into recommendations in early 2016 that aim to deliver a private advice system that provides sufficient certainty through tailored, useful and timely advice with a contemporary service.

For details of the main external consultation activities that have been undertaken as part of this review - refer to the Key dates section of this page.

To be notified by email when there are updates to this review - register now

If you have any questions about this review, or would like any documents in an alternate format to PDF - email PrivateAdviceReview@ato.gov.au

Review of Private Advice - Findings report reflects community feedback received between October 2015 and December 2015.


We are undertaking a review of how we provide private advice, which is the tailored technical assistance we provide clients when they request advice on how the law applies to their specific circumstances.

The feedback we received during the consultation stage will feed into recommendations in early 2016 that aim to deliver a private advice system that provides sufficient certainty through tailored, useful and timely advice with a contemporary service.

For details of the main external consultation activities that have been undertaken as part of this review - refer to the Key dates section of this page.

To be notified by email when there are updates to this review - register now

If you have any questions about this review, or would like any documents in an alternate format to PDF - email PrivateAdviceReview@ato.gov.au

Discussion paper

Consultation stage has concluded
  • Review of private advice - Findings report

    2 months ago
    Tp054conversation.200x150

    Introduction

    This report reflects community feedback received primarily through the Review of Private Advice discussion paper process, and associated external consultation activities undertaken between October 2015 and December 2015.

    PDF download of findings report

    Overview

    The discussion paper, available on the Let’s Talk, was open for comment for four weeks. There were 2,640 unique visits to view the consultation paper. Of those, 435 visitors downloaded the paper. 36 submissions were received, including responses from peak professional bodies on behalf of their membership.

    Additional consultation activities were held to complement the external discussion paper.

    External consultation activities

    • 2640 View of discussion paper
    • 36 Email submissions
    • 30 Workshop participants
    • 184 Webinar participants
    Did you know?
    We sent bulk awareness emails to almost 121,000 ato.gov.au subscribers and tailored emails to over 3,000 consultative group members to encourage awareness and participation in the consultation process.

    Client reach

    Throughout our consultation and communication activities, we sought to engage with all of our important audience sectors, as reflected below:

    • Individuals
    • Tax practitioners
    • Excise
    • Superannuation
    • Not for profit
    • Publicly listed businesses
    • Privately owned & wealthy groups
    • Software developers

    Key themes

    • Key themes explored in the discussion paper were:exploring the current system
      • how do people seek advice from the ATO and why
      • what opportunities exist to improve the private advice system
    • key considerations impacting on the private advice system, such as service offering, timeliness and levels of certainty

    • ideas on how we might change the system for the future.
    Our desire to change…
    As the ATO follows the path of reinvention, there is no better time to change the way we provide private advice than now. Through consultation we asked our clients what they need and expect from the private advice system, shared ideas and co-designed our future framework. Together, we identified small changes and long term improvements. Deputy Commissioner Tim Dyce, review sponsor

    Findings – what you told us

    Throughout this process we have listened to the community’s views. We have summarised your key points as they relate to each consultation topic outlined in the discussion paper.

    Our current private advice system

    You like to seek advice when:

    • you can’t find information on how the law applies to your situation.
    • you don’t understand or are confused with published ATO views on how the law will apply to your particular circumstances.
    • you need assurance that you or your agent are on the right track.
    • you need certainty on the application of the law in complex business arrangements – e.g international matters, prospective arrangements of significant value or where, there are interactions between taxes.
    • you seek certainty where there is new or possible changed legislation impacting on your circumstances.
    • you wish to lower your risk exposure - it’s good governance to come to the ATO to discuss complex arrangements.
    Most commonly, you told us
    • you seek advice on tax matters when you can’t find specific answers to the questions on ato.gov.au
    • you want to do the right thing and want certainty on how the law applies to your particular circumstance.
    • you like the idea of early engagement with us when seeking private advice.

    Conversely, you told us there are times when you prefer not to seek advice, such as when:

    • it’s expensive to prepare a formal advice request
    • you don’t have the time to fill out templates
    • you don’t know what services we offer
    • you know the answer will be ‘no’, so you don’t ask the question
    • you are confident in your own interpretation of the law.
    Did you know?
    The number of private rulings completed in 2014–15 was close to 8,300 and we provided 39,200 administrative advice products directly to clients.
    Source: Commissioner of Taxation Annual Report 2014-15

    Opportunities to improve

    Overwhelmingly, you told us that the system was not broken, but that there are many things we can do (big and small) to improve.

    Some of the things you told us
    ‘There is no clear direction on ato.gov to ask for advice.’ Tax Practitioner

    ‘Our society is speeding up so the system has to be quicker.’ Tax Practitioner

    ‘Currently, some ATO officers appear hesitant to flag their areas of concern early in the process and appear risk averse.’ Workshop participant ‘The private binding ruling process is too costly for small to medium business.’ Workshop participant Small Business/ Private Group

    Did you know?

    We are currently improving our public advice services and you will see changes in the coming months; for example - changes to how we produce and communicate public advice and guidance. For more information, see ATO Advice and Guidance.

    Key considerations impacting the private advice system

    From our consultation activities, you identified a number of ‘key considerations’ impacting the private advice system.

    Factors which are always important

    In response to the feedback questionnaire on the discussion paper, you told us that there are a number of things that are always important when receiving advice, no matter what the circumstance:

    Source: Feedback questionnaire on discussion paper

    Some of the things you told us…
    On Timeliness and Certainty
    The client often wants to know today and not in a month’s time.’ Tax Practitioner

    ‘Naturally, timing would be a priority however I would rather wait to get certainty rather than quick advice that may later prove to be wrong.’ Not for Profit

    ‘I need absolute correct answers.’ Individual

    Did you know?
    You rated timeliness as the factor that could be most improved in obtaining advice. However, depending on what audience group we talk to, timeliness meant different things to different people.

    Other factors that you identified

    Factors that you told us were also important were:

    Security

    • Ensuring that interactions on these new platforms did not fall into the wrong hands e.g. TFNs.

    Commerciality

    • Commercial factors have an effect on the type and timing of advice you seek from us.
    You told us…
    ‘Transactions typically have tight commercial deadlines and the tax ruling process should not be an impediment to achieving this deadline.’ Large Industry Group

    ‘[The ATO] need to apply a commercial lens over the requests made to public listed business and explain the rationale behind why the information is needed.’ Publicly Listed Company

    Expectations of a private advice system into the future

    You have told us that a future system needs to be:

    • more client-focussed
    • less process driven
    • more tailored and responsive to client needs
    • contemporary in our communication channels
    • have a flexible product offering.

    How we might change the private advice system

    The discussion paper outlined several ideas for possible future consideration. Interestingly, all ideas were well received, attracting a fairly equal amount of positive comment and support.

    Here is what you told us about the suggested ideas.

    Contemporary advice channels

    Consultation feedback indicates that the way we currently communicate with you during the private advice process is limited and outdated. This causes several problems including a time delay in receiving the final outcome, paper based interactions cost money and results in a poor user experience.

    Some of the things you told us…
    ‘Use ‘Skype for Business’ to provide ‘face to face advice and understanding of local business issues and circumstances.Tax Practitioner

    ‘ATO Advice or Guidance should be available across modern media and communication channels such as email, SMS, myGov inboxes, BAS Agent and Tax Agent Portal Mail, specialised Chat Rooms… Professional Association

    We still have a fax machine, just because of you guys.’ Workshop Participant

    Client surveys for all client groups

    Feedback received during the consultation process conveyed your expectation that the effectiveness of our services needs to be progressively monitored and our performance measures for private advice needs to reflect what is important to the client.

    Just say it – flexible oral advice

    Obtaining certainty on tax issues in a timely and convenient manner is strongly desired by our small business clients.

    Some of the things you told us…
    ‘ …the proposal for taxpayers to draft up their own rulings should deliver efficiency dividends, especially to the SME sector.’ Publicly Listed Company

    ‘…I am capable and smart but I don’t want to read long legal documents.’ Small Business operator

    Contemporary digital self help

    Particularly with our small business and tax intermediary clients, it was evident that you had a desire for our private advice services to be more accessible digitally, i.e. timely advice that provides certainty and is readily accessible at minimal expense. These attributes were however also common to several of our other client groups.
    Most commonly you told us:
    • a digital decision support tool would save me time and money
    • it looks easy to access via the internet
    • timeliness and level of certainty for rulings that would be automated and binding would give me peace of mind

    Get the answer you need – ‘Yes’ or ‘No’

    Feedback from our consultation activities has queried the usefulness of the ‘Reasons for Decision’ section of our private binding ruling product, particularly when providing advice to our individual and small business taxpayer client groups.

    Some of the things you told us
    Providing a simple ‘Yes’ or ‘No’ answer to private ruling questions, with no or limited explanation, is desirable for all our client groups in certain circumstances, particularly if this allowed our advice to be provided to you in a more timely manner.‘Nobody has time for elaborate discussion.’ Small business owner

    I also like the idea of Get the answer you need - being a simple Yes or No. Often this is sufficient for the person seeking the advice.’ Not for Profit

    ‘For ‘No’ answers, then the existence of objection rights under the TAA would clearly require a more comprehensive answer.’ Tax Practitioner, Big 4

    Draft your own ruling

    This idea was supported by all client groups. Extensive commentary was received, especially by tax practitioners on this topic:
    Some of the things you told us
    ‘…[this] solution is the most readily applicable solution for my practice, based mainly on the type of work I do and the clients I advise.’ Tax Practitioner

    ‘This should improve the timeliness of the tax ruling if the ATO only has to review and endorse the ruling.’ Tax/Accounting firm

    ‘Tax Practitioners are highly qualified professionals who meet significant minimum education criteria. As such, they are well positioned to draft rulings for submission to the ATO for approval.’ Industry Body

      Other ideas you suggested

      • You would like better access to ATO experts.
      • You would like a process for agreeing on the facts.
      • You would like a simple ruling ‘extension’ procedure that you initiate when it is appropriate for a ruling to continue beyond its original end date.
      • You would like a broader product suite for greater flexibility.
      • Our culture could be improved by focussing on ‘service’.
      • The Register of Private Binding Rulings needs to be improved.
      • We could think about a concept of ‘shared rulings’ which would allow a client (other than the applicant) to rely on the views expressed in a private ruling. This would be relevant where several parties are involved in a transaction.

      Additional feedback

      In addition to the questions asked, other valuable comments that you made were:

      • ‘In deciding which products to offer, it is therefore critical that the ATO clearly identifies which products will be afforded these legal rights and protections and how they will operate.’ Tax Practitioner Large Firm
      • '...[we are seeing] the ATO taking steps to improve private advice and guidance through early engagement and pre-lodgment meetings...' Professional association
      • ‘It was great to see that the ATO is taking on board feedback and is prepared to keep evolving with the times.’ Webinar participant

      What will happen next?

      This feedback is being considered as part of the Review of Private Advice recommendations. We plan to share these recommendations in mid 2016.



      Introduction

      This report reflects community feedback received primarily through the Review of Private Advice discussion paper process, and associated external consultation activities undertaken between October 2015 and December 2015.

      PDF download of findings report

      Overview

      The discussion paper, available on the Let’s Talk, was open for comment for four weeks. There were 2,640 unique visits to view the consultation paper. Of those, 435 visitors downloaded the paper. 36 submissions were received, including responses from peak professional bodies on behalf of their membership.

      Additional consultation activities were held to complement the external discussion paper.

      External consultation activities

      • 2640 View of discussion paper
      • 36 Email submissions
      • 30 Workshop participants
      • 184 Webinar participants
      Did you know?
      We sent bulk awareness emails to almost 121,000 ato.gov.au subscribers and tailored emails to over 3,000 consultative group members to encourage awareness and participation in the consultation process.

      Client reach

      Throughout our consultation and communication activities, we sought to engage with all of our important audience sectors, as reflected below:

      • Individuals
      • Tax practitioners
      • Excise
      • Superannuation
      • Not for profit
      • Publicly listed businesses
      • Privately owned & wealthy groups
      • Software developers

      Key themes

      • Key themes explored in the discussion paper were:exploring the current system
        • how do people seek advice from the ATO and why
        • what opportunities exist to improve the private advice system
      • key considerations impacting on the private advice system, such as service offering, timeliness and levels of certainty

      • ideas on how we might change the system for the future.
      Our desire to change…
      As the ATO follows the path of reinvention, there is no better time to change the way we provide private advice than now. Through consultation we asked our clients what they need and expect from the private advice system, shared ideas and co-designed our future framework. Together, we identified small changes and long term improvements. Deputy Commissioner Tim Dyce, review sponsor

      Findings – what you told us

      Throughout this process we have listened to the community’s views. We have summarised your key points as they relate to each consultation topic outlined in the discussion paper.

      Our current private advice system

      You like to seek advice when:

      • you can’t find information on how the law applies to your situation.
      • you don’t understand or are confused with published ATO views on how the law will apply to your particular circumstances.
      • you need assurance that you or your agent are on the right track.
      • you need certainty on the application of the law in complex business arrangements – e.g international matters, prospective arrangements of significant value or where, there are interactions between taxes.
      • you seek certainty where there is new or possible changed legislation impacting on your circumstances.
      • you wish to lower your risk exposure - it’s good governance to come to the ATO to discuss complex arrangements.
      Most commonly, you told us
      • you seek advice on tax matters when you can’t find specific answers to the questions on ato.gov.au
      • you want to do the right thing and want certainty on how the law applies to your particular circumstance.
      • you like the idea of early engagement with us when seeking private advice.

      Conversely, you told us there are times when you prefer not to seek advice, such as when:

      • it’s expensive to prepare a formal advice request
      • you don’t have the time to fill out templates
      • you don’t know what services we offer
      • you know the answer will be ‘no’, so you don’t ask the question
      • you are confident in your own interpretation of the law.
      Did you know?
      The number of private rulings completed in 2014–15 was close to 8,300 and we provided 39,200 administrative advice products directly to clients.
      Source: Commissioner of Taxation Annual Report 2014-15

      Opportunities to improve

      Overwhelmingly, you told us that the system was not broken, but that there are many things we can do (big and small) to improve.

      Some of the things you told us
      ‘There is no clear direction on ato.gov to ask for advice.’ Tax Practitioner

      ‘Our society is speeding up so the system has to be quicker.’ Tax Practitioner

      ‘Currently, some ATO officers appear hesitant to flag their areas of concern early in the process and appear risk averse.’ Workshop participant ‘The private binding ruling process is too costly for small to medium business.’ Workshop participant Small Business/ Private Group

      Did you know?

      We are currently improving our public advice services and you will see changes in the coming months; for example - changes to how we produce and communicate public advice and guidance. For more information, see ATO Advice and Guidance.

      Key considerations impacting the private advice system

      From our consultation activities, you identified a number of ‘key considerations’ impacting the private advice system.

      Factors which are always important

      In response to the feedback questionnaire on the discussion paper, you told us that there are a number of things that are always important when receiving advice, no matter what the circumstance:

      Source: Feedback questionnaire on discussion paper

      Some of the things you told us…
      On Timeliness and Certainty
      The client often wants to know today and not in a month’s time.’ Tax Practitioner

      ‘Naturally, timing would be a priority however I would rather wait to get certainty rather than quick advice that may later prove to be wrong.’ Not for Profit

      ‘I need absolute correct answers.’ Individual

      Did you know?
      You rated timeliness as the factor that could be most improved in obtaining advice. However, depending on what audience group we talk to, timeliness meant different things to different people.

      Other factors that you identified

      Factors that you told us were also important were:

      Security

      • Ensuring that interactions on these new platforms did not fall into the wrong hands e.g. TFNs.

      Commerciality

      • Commercial factors have an effect on the type and timing of advice you seek from us.
      You told us…
      ‘Transactions typically have tight commercial deadlines and the tax ruling process should not be an impediment to achieving this deadline.’ Large Industry Group

      ‘[The ATO] need to apply a commercial lens over the requests made to public listed business and explain the rationale behind why the information is needed.’ Publicly Listed Company

      Expectations of a private advice system into the future

      You have told us that a future system needs to be:

      • more client-focussed
      • less process driven
      • more tailored and responsive to client needs
      • contemporary in our communication channels
      • have a flexible product offering.

      How we might change the private advice system

      The discussion paper outlined several ideas for possible future consideration. Interestingly, all ideas were well received, attracting a fairly equal amount of positive comment and support.

      Here is what you told us about the suggested ideas.

      Contemporary advice channels

      Consultation feedback indicates that the way we currently communicate with you during the private advice process is limited and outdated. This causes several problems including a time delay in receiving the final outcome, paper based interactions cost money and results in a poor user experience.

      Some of the things you told us…
      ‘Use ‘Skype for Business’ to provide ‘face to face advice and understanding of local business issues and circumstances.Tax Practitioner

      ‘ATO Advice or Guidance should be available across modern media and communication channels such as email, SMS, myGov inboxes, BAS Agent and Tax Agent Portal Mail, specialised Chat Rooms… Professional Association

      We still have a fax machine, just because of you guys.’ Workshop Participant

      Client surveys for all client groups

      Feedback received during the consultation process conveyed your expectation that the effectiveness of our services needs to be progressively monitored and our performance measures for private advice needs to reflect what is important to the client.

      Just say it – flexible oral advice

      Obtaining certainty on tax issues in a timely and convenient manner is strongly desired by our small business clients.

      Some of the things you told us…
      ‘ …the proposal for taxpayers to draft up their own rulings should deliver efficiency dividends, especially to the SME sector.’ Publicly Listed Company

      ‘…I am capable and smart but I don’t want to read long legal documents.’ Small Business operator

      Contemporary digital self help

      Particularly with our small business and tax intermediary clients, it was evident that you had a desire for our private advice services to be more accessible digitally, i.e. timely advice that provides certainty and is readily accessible at minimal expense. These attributes were however also common to several of our other client groups.
      Most commonly you told us:
      • a digital decision support tool would save me time and money
      • it looks easy to access via the internet
      • timeliness and level of certainty for rulings that would be automated and binding would give me peace of mind

      Get the answer you need – ‘Yes’ or ‘No’

      Feedback from our consultation activities has queried the usefulness of the ‘Reasons for Decision’ section of our private binding ruling product, particularly when providing advice to our individual and small business taxpayer client groups.

      Some of the things you told us
      Providing a simple ‘Yes’ or ‘No’ answer to private ruling questions, with no or limited explanation, is desirable for all our client groups in certain circumstances, particularly if this allowed our advice to be provided to you in a more timely manner.‘Nobody has time for elaborate discussion.’ Small business owner

      I also like the idea of Get the answer you need - being a simple Yes or No. Often this is sufficient for the person seeking the advice.’ Not for Profit

      ‘For ‘No’ answers, then the existence of objection rights under the TAA would clearly require a more comprehensive answer.’ Tax Practitioner, Big 4

      Draft your own ruling

      This idea was supported by all client groups. Extensive commentary was received, especially by tax practitioners on this topic:
      Some of the things you told us
      ‘…[this] solution is the most readily applicable solution for my practice, based mainly on the type of work I do and the clients I advise.’ Tax Practitioner

      ‘This should improve the timeliness of the tax ruling if the ATO only has to review and endorse the ruling.’ Tax/Accounting firm

      ‘Tax Practitioners are highly qualified professionals who meet significant minimum education criteria. As such, they are well positioned to draft rulings for submission to the ATO for approval.’ Industry Body

        Other ideas you suggested

        • You would like better access to ATO experts.
        • You would like a process for agreeing on the facts.
        • You would like a simple ruling ‘extension’ procedure that you initiate when it is appropriate for a ruling to continue beyond its original end date.
        • You would like a broader product suite for greater flexibility.
        • Our culture could be improved by focussing on ‘service’.
        • The Register of Private Binding Rulings needs to be improved.
        • We could think about a concept of ‘shared rulings’ which would allow a client (other than the applicant) to rely on the views expressed in a private ruling. This would be relevant where several parties are involved in a transaction.

        Additional feedback

        In addition to the questions asked, other valuable comments that you made were:

        • ‘In deciding which products to offer, it is therefore critical that the ATO clearly identifies which products will be afforded these legal rights and protections and how they will operate.’ Tax Practitioner Large Firm
        • '...[we are seeing] the ATO taking steps to improve private advice and guidance through early engagement and pre-lodgment meetings...' Professional association
        • ‘It was great to see that the ATO is taking on board feedback and is prepared to keep evolving with the times.’ Webinar participant

        What will happen next?

        This feedback is being considered as part of the Review of Private Advice recommendations. We plan to share these recommendations in mid 2016.