Some clients may be aware that the ATO have had some computer issues for the past 6-8 months. Firstly, in relation to the changeover of computer programs, and then on issue of the 2010 tax refunds in July and August 2010. Below are some statistics and reasons for the delays released by the ATO. The Professional bodies and the Inspector General of Taxation are all trying to ensure the ATO brings their systems back up to normal speed.
The statistics provided by the ATO as at 15 August 2010 are as follows:
- 3.7 million 2010 individual income tax returns have been lodged;
- 3.1 million Notices of Assessment have issued;
- Of the balance (ie 620,000) approximately 200,000 are being held for review, 270,000 are undergoing processing and verification checks and 150,000 are awaiting finalisation to issue;
- The ATO is receiving approximately 100,000 returns each day;
- 77% of finalised 2010 income tax returns were completed within 14 days;
- More than 99% of finalised 2010 income tax returns were completed within 30 days; and
- Refunds to the value of approximately $2 billion were paid between 16 and 18 August 2010.
The ATO have also advised:
- The use of their risk, potential overpayment and potential fraud models has resulted in a number of returns being held back for further examination and this includes forms lodged by tax agents.
- The previously advised delay impacting some 88,000 returns with Eligible Termination Payment's (ETP's) has been resolved and they were released over last weekend, although they are now holding approximately 1,800 returns containing ETPs which still need to be reviewed for other reasons.
- The ATO is processing HELP and SFSS returns but a small number of amended returns (less than 2,000) are still being held. It is anticipated that this issue to be resolved by end of August.
- There appears to be an issue in relation to accessing Payment slips for companies and superannuation funds - the ATO is working to rectify the issue but advise that payment slips can be printed from the Portal.
- Companies newly registered in 2010 have an incorrect due date set. The correct due date is 15 May 2010 and we are working to rectify this issue.
This little known about piece of legislation was passed on 14 December 2009 and will come into place in May 2011. This legislation will make wholesale changes to the registration of security interests in regards to personal property and will change the thinking of who actually has legal title over goods.
Personal property is defined as property except land and includes such things as goods, crops, livestock, motor vehicles, paintings, machinery and debtors. It also covers intangible assets such as licences and intellectual property.
This Act will also cover such things as leases where the term is greater than 1 year and commercial assignments, including retention of title arrangements.
The Act requires these types of personal property to be registered on an online PPS register from May 2010.
Clients should review their businesses to see if they need to register an interest over property especially manufacturers and those that lease and hire goods out. Review your trade agreements, speak to your financiers and possibly put into place procedures for administration staff to register these property interests.
If in doubt about the impact of this on your business, you should contact us or your lawyer.
Below is an example of a NZ legal case on this issue:
Company A leased portable buildings to Company B under standard terms. Company A did not register the lease on the register. Company B then took out a loan with HSBC which was registered on the register and then went into receivership. HSBC registered interest had priority over Company A’s unregistered interest which allowed the receivers to sell the portable buildings that Company A actually owned and leased to Company B.
Fixed Price Agreements
By now, a lot of business clients of LBW have been contacted by staff in relation to fixed price agreements. For those of you that have not been contacted yet, you will be in the next couple of months. As a teaser for those that have not been contacted, these agreements take the place of the engagement letters previously issued and are effectively the same except for one major difference. We are now asking you what you would like us to do for you over the next twelve months and we are undertaking to perform that scoped work at a fixed price under certain service level performance benchmarks.
These service level benchmarks are based on certainty of service in relation to turnaround times of work, response times to client contact and increased communication with our clients.
Because of these guarantees, our clients have absolutely nothing to lose by entering these fixed price agreements. Our clients are asked to provide prices and warranties for products or services before they are provided. We are now doing the same.
Generally the response to discussions with clients surrounding the development and implementation of fixed price agreements has been one of “what a great idea – why didn’t you think of this sooner?”
We are endeavouring to roll this out to all business clients in the near future, but if you have not yet been contacted, please contact your LBW representative if you would like to discuss a fixed price agreement that is specifically tailored to your needs.
