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The ATO has announced that its independent review service for tax disputes will be available permanently to eligible small businesses.
The Australian Taxation Office (ATO) has said that following a multi-year pilot program, its small business independent review service will be offered permanently as a tax dispute resolution option for eligible small businesses.
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The service is available for eligible small businesses with an annual turnover of less than $10 million in relation to disputes about income tax, GST, excise, luxury car tax, wine equalisation tax and fuel tax credits.
However, disputes about employer obligations like superannuation and fringe benefits tax are not eligible for the independent review service, the ATO said.
According to ATO deputy commissioner Jeremy Geale, every independent review will be conducted by an officer from a different part of the ATO who was not involved in the original audit of the small business.
He also clarified that taxpayers can request in-house facilitation at any stage of a dispute with the ATO, and that the independent review would occur prior to the ATO issuing an amended assessment and any resulting debt being raised.
The ATO stated that since the pilot program began in 2018, more than 1,200 small businesses have been offered the service, and more than 180 small businesses have taken up the ATO’s offer.
Commenting on the service, Mr Geale said that it would ensure that eligible small businesses would have an additional opportunity to resolve a dispute with the ATO in a “cost-effective and time-efficient” manner.
He also said the service is aimed at providing small businesses with an opportunity to reach an “independent, fast, free and fair resolution” when they disagree with the ATO’s audit position.
“Independence is critical when handling a dispute, so we ensure each and every independent review is done by an officer from a different part of the ATO who was not involved in the original audit,” Mr Geale said.
“Small businesses who participated in our pilot told us they found the process to be fair and independent, irrespective of the independent review outcome, so this is a great result, and is a big part of why we are locking this service in permanently.”
According to the ATO, Australia is the only jurisdiction that provides multiple dispute resolution options to small business taxpayers, which it said allows small businesses to be heard at audit, independent review, objection, court or tribunal (with appeal rights and tribunal funding).
It added that the independent review service is available to eligible small businesses in addition to other dispute options, including lodging an objection, in-house facilitation, or by taking the matter up with the Inspector General of Taxation and Taxation Ombudsman or the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).
ASBFEO welcomes ATO’s permanent service offering
The ATO said that its decision to transition the pilot to business-as-usual is consistent with recent recommendations made by the ASBFEO.
Newly appointed ASBFEO Bruce Billson has welcomed the ATO’s decision to turn the review service into a permanent offering, stating that it would provide small businesses with a timely, free and fair dispute resolution pathway.
“The ATO has acted quickly to implement a key recommendation in our recently released report, A tax system that works for small business, which will help support small businesses when they disagree with an ATO audit position,” Mr Billson said.
“This ATO decision is a substantial step in the right direction in ensuring small businesses are given a fair go. More than 180 small businesses who participated in the pilot program reported the process was fair and independent, irrespective of the outcome, so we welcome the ATO’s move to lock in this service permanently.”
Mr Billson added that the review service forms a “crucial part” of ASBFEO’s vision of a tax systems that works for the small-business sector “so businesses can achieve greater productivity, return to profitability, and grow employment”.
He concluded: “This ATO service marks an important contribution to a supportive environment, which is needed now more than ever as small businesses recover from an incredibly tough 12 months.”
[Related: Calls for overhaul of ATO’s SME dealings]
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