Overwork taxes agents

A SURVEY of small and mid-sized tax practices has found a sharp increase in average working hours over the past three years, from 47.4 hours a week to 54.6 hours.

The proportion of tax practitioners working more than 50 hours a week has doubled, to 54 per cent, while the number working over 60 hours has tripled, to 21 per cent.

In line with the increased working hours, the survey found that three quarters of firms had increased revenue over the past three years and two thirds had taken extra clients.

However, only 43 per cent of firms had increased profitability and 30 per cent actually experienced lower profits.

The survey also found that tax practitioners were divided over their future prospects.

While one in four tax agents said they could leave the profession during the next few years, 36 per cent said they expected their practices would grow and prosper.

The latter group was likely to have a high technological capacity, a mid-sized (rather than small) firm and to have engaged in formal planning.

The research was undertaken jointly by the Australian Tax Office and professional associations, and surveyed 454 tax agents.

It targeted smaller practices and therefore excluded the ‘Big Four’ accounting firms.

One of the biggest gripes in the industry, raised by 81 per cent of respondents, was the burden of regulatory compliance and tax administration.

This was a particular issue in smaller practices, where many partners and senior staff got caught up in low-level compliance work.

Other issues that emerged from the survey included professional indemnity insurance costs (77 per cent), the threat of penalties or enforcement action by the tax office (63 per cent) and risk of litigation by clients (52 per cent).

The industry was polarised on service standards from the ATO, with almost equal numbers satisfied and dissatisfied.

However the majority of practitioners felt the relationship with the tax office had improved over the past six months.

The dominant influence on the satisfaction rating was the tax office’s perceived flexibility (or lack thereof) in relation to lodgement requirements and deadlines.

Other influences were its approach to enforcement of penalties, acknowledgement of tax practitioners’ workloads, and the amount of advice and education provided in relation to new legislation.

The tax office has an ongoing program to improve its dealings with tax agents.

Key initiatives include the appointment of relationship managers and the establishment of a tax agent portal so that agents can interact online with the tax office.

The ATO is building on this initiative by creating a business portal.

It is inviting small and medium sized businesses (with annual turnover less than $100 million) to participate in a pilot of the business portal.

It will allow businesses to see their tax records and account history online as well as lodge and pay their BAS electronically.