Australia's Accountants Not Adequately Consulted During Henry Tax Review Process

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A survey into the accounting industry's views on the Henry Tax Review reform. Proposed reforms expected to impact revenue and resources most within the accountancy industry.

Simplification of our tax system is an important priority that will deliver significant benefits to Australian consumers and businesses. If the final stages of the Henry Review process can be extended to incorporate more detailed feedback from the accounting industry we have no doubt the final reforms will be welcomed

Australia's accounting professionals believe they have not been adequately consulted throughout the Henry Tax Review process.

This is the key finding of a recent survey conducted by business software provider Sage HandiSoft that works with more than 6,400 of Australia's accountants and tax agents.

The Henry Tax Review will impose major reforms on the accounting and tax industry, as significant as those seen with the introduction of the GST in 2000. Proposed reforms range from changes to personal and business taxes to the introduction of road taxes and an overall simplification of the Australian tax system. Final recommendations are expected to be delivered to Treasury in December this year.

However, according to Australia's accountants and tax agents, the proposed reforms will also bring a decrease in revenue opportunities, an increase in administrative burdens and an expectation on them to educate clients about the changes.

Despite the Government's consultation process being specifically designed to elicit feedback from key industry, professional and community groups on Australia's Future Tax System, 60 per cent of accountants and tax agents surveyed said they believed they had not been adequately consulted on its impact.

Surveys, a direct approach for submissions from accountants and conduct of focus groups within the accounting profession are the preferred methods for further consultation according to the survey findings.

Nearly 80 per cent of respondents said they believe that responsibility will fall to accountants and tax agents who are already strained under heavy reporting, administration and compliance requirements imposed by the Government and Australian Tax Office (ATO).

More than half of survey respondents said they wanted to contribute to the reform process but were unsure how to go about it. The respondents believe that further consultation with accountants on the impact of proposed reforms needs to be undertaken by the review committee before final recommendations are presented.

"Given the broad reaching impacts these reforms are likely to have on the accounting profession it is a surprise that there was not more direct consultation," said Alan Osrin, Managing Director, Sage HandiSoft.

"The findings of this survey indicate that the planned final stages of the consultation process should now focus on identifying the type of support, education and training the profession will require to effectively implement these changes and educate Australian businesses on what the proposed reforms will mean for them.

"Simplification of our tax system is an important priority that will deliver significant benefits to Australian consumers and businesses. If the final stages of the Henry Review process can be extended to incorporate more detailed feedback from the accounting industry we have no doubt the final reforms will be welcomed," Osrin said.

Note to editors:

Survey methodology

  • The 'Henry Tax Review' survey was conducted online by Sage HandiSoft in July 2009
  • A total of 477 valid responses were received
  • Responses represent a cross-section of accountants (46.2 per cent of respondents) and tax agents (52.4 per cent of respondents) from across Australia

Key findings of the survey include:

Adequate consultation with accounting profession on the Henry Tax Review

  • 20 per cent strongly disagree
  • 40 per cent disagree
  • 22 per cent have no view
  • 17 per cent agree
  • 1 per cent strongly agree

Contribution to the Henry Tax Review

  • 32 per cent had no intention of contributing
  • 30 per cent had intended to contribute but didn't know how
  • 24 per cent didn't contribute but would have liked to
  • 12 per cent contributed indirectly through industry bodies or surveys
  • 2 per cent contributed directly to the Treasury

Impact of a 'simpler' business taxation system on accounting firm revenue

  • Significantly decrease revenue - 11 per cent
  • Decrease revenue - 37 per cent
  • No impact - 35 per cent
  • Increase revenue - 15 per cent
  • Significantly Increase revenue - 2 per cent

Interest of clients in the Henry Tax Review

  • Very high interest - 2 per cent
  • High interest - 8 per cent
  • Neutral - 22 per cent
  • Low interest - 23 per cent
  • Very low interest - 45 per cent

Confidence that the Government will provide adequate support, education and training on the expected tax changes

  • Very low - 20 per cent
  • Low - 51 per cent
  • No view - 12 per cent
  • High - 16.8 per cent
  • Very high - 0.2 per cent

Sydney, 6 September, 2009 - Australia's accounting professionals believe they have not been adequately consulted throughout the Henry Tax Review process.

This is the key finding of a recent survey conducted by business software provider Sage HandiSoft that works with more than 6,400 of Australia's accountants and tax agents.

The Henry Tax Review will impose major reforms on the accounting and tax industry, as significant as those seen with the introduction of the GST in 2000. Proposed reforms range from changes to personal and business taxes to the introduction of road taxes and an overall simplification of the Australian tax system. Final recommendations are expected to be delivered to Treasury in December this year.

However, according to Australia's accountants and tax agents, the proposed reforms will also bring a decrease in revenue opportunities, an increase in administrative burdens and an expectation on them to educate clients about the changes.

Despite the Government's consultation process being specifically designed to elicit feedback from key industry, professional and community groups on Australia's Future Tax System, 60 per cent of accountants and tax agents surveyed said they believed they had not been adequately consulted on its impact.

Surveys, a direct approach for submissions from accountants and conduct of focus groups within the accounting profession are the preferred methods for further consultation according to the survey findings.

Nearly 80 per cent of respondents said they believe that responsibility will fall to accountants and tax agents who are already strained under heavy reporting, administration and compliance requirements imposed by the Government and Australian Tax Office (ATO).

More than half of survey respondents said they wanted to contribute to the reform process but were unsure how to go about it. The respondents believe that further consultation with accountants on the impact of proposed reforms needs to be undertaken by the review committee before final recommendations are presented.

"Given the broad reaching impacts these reforms are likely to have on the accounting profession it is a surprise that there was not more direct consultation," said Alan Osrin, Managing Director, Sage HandiSoft.

"The findings of this survey indicate that the planned final stages of the consultation process should now focus on identifying the type of support, education and training the profession will require to effectively implement these changes and educate Australian businesses on what the proposed reforms will mean for them.

"Simplification of our tax system is an important priority that will deliver significant benefits to Australian consumers and businesses. If the final stages of the Henry Review process can be extended to incorporate more detailed feedback from the accounting industry we have no doubt the final reforms will be welcomed," Osrin said.

Note to editors:

Survey methodology

  • The 'Henry Tax Review' survey was conducted online by Sage HandiSoft in July 2009
  • A total of 477 valid responses were received
  • Responses represent a cross-section of accountants (46.2 per cent of respondents) and tax agents (52.4 per cent of respondents) from across Australia

Key findings of the survey include:

Adequate consultation with accounting profession on the Henry Tax Review

  • 20 per cent strongly disagree
  • 40 per cent disagree
  • 22 per cent have no view
  • 17 per cent agree
  • 1 per cent strongly agree

Contribution to the Henry Tax Review

  • 32 per cent had no intention of contributing
  • 30 per cent had intended to contribute but didn't know how
  • 24 per cent didn't contribute but would have liked to
  • 12 per cent contributed indirectly through industry bodies or surveys
  • 2 per cent contributed directly to the Treasury

Impact of a 'simpler' business taxation system on accounting firm revenue

  • Significantly decrease revenue - 11 per cent
  • Decrease revenue - 37 per cent
  • No impact - 35 per cent
  • Increase revenue - 15 per cent
  • Significantly Increase revenue - 2 per cent

Interest of clients in the Henry Tax Review

  • Very high interest - 2 per cent
  • High interest - 8 per cent
  • Neutral - 22 per cent
  • Low interest - 23 per cent
  • Very low interest - 45 per cent

Confidence that the Government will provide adequate support, education and training on the expected tax changes

  • Very low - 20 per cent
  • Low - 51 per cent
  • No view - 12 per cent
  • High - 16.8 per cent
  • Very high - 0.2 per cent

For more information:
Kate Hines
n2n communications
02 9213 2311

About Sage HandiSoft:
Sage HandiSoft is a leading supplier of specialist professional software to Australia's public accounting practices.

Sage HandiSoft's clients include more than 6,400 practices of all sizes, from those with 80 or more staff billing over a million dollars annually, to one-person home based practices. Sage HandiSoft's significant market share is illustrated by ATO statistics showing that between June 2008 and May 2009, Sage HandiSoft's taxation product prepared almost 37 per cent of all electronically lodged tax returns.

Sage HandiSoft is a wholly owned subsidiary of Sage Group plc, a FTSE 100 company headquartered in the UK.

About Sage HandiSoft:
Sage HandiSoft is a leading supplier of specialist professional software to Australia's public accounting practices.

Sage HandiSoft's clients include more than 6,400 practices of all sizes, from those with 80 or more staff billing over a million dollars annually, to one-person home based practices. Sage HandiSoft's significant market share is illustrated by ATO statistics showing that between June 2008 and May 2009, Sage HandiSoft's taxation product prepared almost 37 per cent of all electronically lodged tax returns.

Sage HandiSoft is a wholly owned subsidiary of Sage Group plc, a FTSE 100 company headquartered in the UK.

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Kate Hines
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