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

Review of private advice

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

    4 months ago
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    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

    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.



    • Discussion paper is now closed for comment

      9 months ago

      Review of private advice discussion paper (PDF, 331 KB)

      To obtain this discussion paper in an alternate format, email PrivateAdviceReview@ato.gov.au

      Review of private advice discussion paper (PDF, 331 KB)

      To obtain this discussion paper in an alternate format, email PrivateAdviceReview@ato.gov.au

    • Review of private advice - Discussion paper is now closed for comment

      10 months ago

      Request for feedback and comments

      We are considering how we might change the way we provide private advice across all client groups to make it easy for our clients to get things right. We would like to provide a more tailored experience for our clients, with excellent service delivered in the most effective and efficient way, while being fair and respectful in our dealings.

      Through consultation, this administrative review will provide an opportunity to:

      • develop a future vision for the provision of private advice.
      • design an advice framework that will guide our future culture, business processes, products and services.... Continue reading

      Request for feedback and comments

      We are considering how we might change the way we provide private advice across all client groups to make it easy for our clients to get things right. We would like to provide a more tailored experience for our clients, with excellent service delivered in the most effective and efficient way, while being fair and respectful in our dealings.

      Through consultation, this administrative review will provide an opportunity to:

      • develop a future vision for the provision of private advice.
      • design an advice framework that will guide our future culture, business processes, products and services.
      • explore ideas and solutions that will improve the whole-of-client experience.

      In line with our program of Reinventing the ATO, we are looking to improve our advice services, both public and private. Recently we concluded the Review of Public Advice and Guidance and we now seek your input into how we can reshape our private advice system to better meet expectations across all client groups. Together these two aligned reviews can profoundly reshape our advice system.

      Note: This administrative review is not seeking suggestions for legislative change and does not cover the provision of general information published on ato.gov.au, public rulings, position papers or general business process questions.


      Background

      The ATO has the primary responsibility of administering the taxation and superannuation systems. Our mission is to contribute to the economic and social wellbeing of Australians by fostering willing participation in these systems. When taxpayers willingly participate in a self-assessment environment, on occasion they may still require assistance from us to get things right and seek certainty about how the law applies to their circumstances.

      Bearing in mind the legal and operational framework in which we operate, we want to explore ways in which we can be responsive to, and reflect, the changing commercial environment, and community and government expectations in the provision of private advice.


      Our current private advice system

      To us, private advice is tailored technical assistance we provide clients when they request specific advice on a one-to-one basis (an individual client), or one-to-many basis (a class of clients); that is, how the law applies to the client's specific circumstances. We provide this advice either directly to the client(s) or through their advisor or other intermediary. Different levels of protection apply depending on the advice product provided.

      Products we currently provide include:


      See also:

      Consultation questions

      1. Under what circumstances would you seek advice from the ATO?

      2. What private advice product(s) do you/would you request and why?

      3. What opportunities are there to improve the existing private advice system?


      Key considerations impacting the private advice system

      Below are some key considerations impacting our operating environment:

      Levels of certainty

      We understand that clients and their advisors seek private advice for both routine and complex matters. At times, they seek absolute certainty through binding rulings for matters that are complex or of significant value or consequence; for more straightforward matters, they may only require reassurance or confirmation. In some situations, clients may be prepared to accept that the advice we provide has a lower level of protection (for example, indicative advice) where timeliness is a concern.

      Service offering

      As part of our Reinvention program, we now have a stronger focus on reducing the need for clients to seek private advice for routine matters by improving our general advice products and other service offerings. Where private advice is still needed, we will work with our client to determine the best service offering to achieve the right outcome. Our traditional advice products may be broadened to include other forms of assurance that provide a level of certainty that meets our client's needs.

      Timeliness

      We are exploring ways to provide advice in a more timely manner. We understand that many clients and their advisors have been concerned that we take longer than they would like when providing written advice.

      Our ability to provide a timely and quality decision is centred on having access to all the necessary information to enable us to apply the law appropriately. At times, we need to seek further information, including statements from intermediaries on factual matters; this may come at the cost of timeliness.

      Tailored advice

      The advice and guidance we provide covers a wide range of topics and complexities. While we acknowledge that there are cases that require a full explanation of our position, there are many other situations where a client is simply seeking a practical answer and does not require a lengthy explanation, or any explanation at all. For example, an individual seeking advice about a routine capital gains tax issue is not likely to need a detailed legal explanation; a simple yes or no may suit their needs.

      Interactions tailored to reflect client's behaviour and choices

      We are committed to designing services for the majority of taxpayers who try to comply and aim to achieve fair and reasonable outcomes given a client's behaviour and choices. For example, it may be possible to issue advice to a 'low risk' client on the basis of less information when compared to a client who is 'high risk'.

      Contemporary communication channels

      In the past, we have preferred to use post or fax to communicate finalised private rulings and other ATO products to clients, due to concerns about possible risk to the privacy of the applicant through internet transmissions. However, the way we communicate with clients and intermediaries should be contemporary and flexible. Therefore, we are considering introducing a broad range of communication channels where advice can be delivered in a way that is tailored to you and the type of advice sought.

      Reducing costs and user-friendly system

      While we plan to tailor services to meet client needs, we want to keep it simple and not overcomplicate the system with too many products. We are passionate about delivering contemporary and digital self-help tools in providing private advice and helping clients get things right at a time that meets their needs. These tools may help reduce compliance costs for you and the ATO.

      Early engagement discussions

      The ATO is committed to early engagement when dealing with complex or high value transactions and when discussing prospective arrangements being considered by our larger client groups. We appreciate the value of early discussions to support business outcomes and to provide a level of certainty as soon as practicable.

      Consistency in how we apply the law

      We strive to apply the law consistently, while taking into account a client's specific circumstances and tailoring advice accordingly. In the absence of all the facts, it may sometimes appear to clients and their advisors that our application of the law has been inconsistent. Transparency in our decision making and a sense of fairness are critical features of our advice system.

      Measuring our performance

      We monitor our performance through a range of corporate benchmarks – for example, timeframes and quality assurance. Through this review, we are also seeking to determine how best to measure community satisfaction with our administration of the private advice system.

      Consultation questions

      4. In considering the factors above, are some more important to you than others?
      If so, in what circumstances?

      5. Which of these factors will always be of primary importance to you?

      6. Are there any other factors that may impact the private advice system that have not been covered above? If so, what are they?

      7. Considering these factors, what are your expectations of a private advice system in the future?


      How we might change the private advice system

      We would like to share with you some preliminary ideas that have already been suggested for some client groups. We are interested in community feedback on these ideas and are keen to consider other suggestions:

      Contemporary advice channels across all client groups

      Expanding the range of channels through which we provide private advice, enabling contemporary and flexible communication.

      For example: You may choose from text messaging, emailing, click to chat, specialised chat rooms, social networking, the Tax Agent Portal, the Business Portal, the myGov inbox and the ATO app.

      Client surveys for all client groups

      Ensure we measure and frequently evaluate our improved private advice service to the community including undertaking simple client surveys to ensure we are meeting client expectations.

      For example: Surveys could be supplied each time we provide advice or periodically. They could be completed over a number of channels including by email, through the portals or over the phone.

      Just say it - flexible oral advice for small business

      Increased availability of binding oral advice and the option to have it recorded and stored on the client's ATO file.

      For example: Recording face-to-face meetings, video conferencing services, in-bound telephone calls (for simple matters) or scheduled out-bound telephone calls.

      Contemporary digital self-help service for individuals, small business and intermediaries (tax agents)

      Offer an innovative 24/7 internet-based service providing clients with binding advice that is streamlined and easy to access, understand and use.

      For example: Through a self-help online tool, automated private rulings are available on specific tax topics.

      Get the answer you need - "Yes" or "No" will do for individuals and small business

      Provide short, sharp responses that contain only what is required by the client when seeking advice from the ATO.

      For example: A client is provided with a simple answer to their query without a full explanation of the reasons for the decision. A right to seek an explanation is maintained, but may involve a negotiation of timeframes. Further, the level of detail in the reasons could be tailored to the needs of the particular client.

      Draft your own ruling for privately owned and wealthy groups, publicly listed business and intermediaries (tax agents)

      Currently, significant time and effort is placed into drafting ruling applications by clients or their intermediaries. Instead, this time and effort could be used to draft the ruling for submission to the ATO for consideration, ensuring shorter turnaround times.

      For example: An option for clients to draft their own ruling to be reviewed and endorsed (if correct) by us.

      Consultation questions

      8. Of the above suggestions, which do you prefer and why?

      9. Do you have any ideas to suggest that are not already listed?

      10. Do you have any further feedback on the current or future private advice system?


      Consultation principles

      We are committed to consultation as a means of improving the administration of Australia’s tax and super systems in ways that benefit the national interest. The consultation on this review is being run in accordance with the ATO consultation framework and the ATO consultation protocol.

      See also: