EOFY planning would be easier if advisers were given ATO portal access

Specifically, director and financial planner at Northeast Wealth James O’Reilly raised the point in regard to allowing advisers access to the portal during the financial year in order to ease and streamline services for clients.

Speaking to The ifa Show, O’Reilly highlighted that access to the ATO portal would help ease services financial advisers provide to clients, especially when it comes to tax time and the EOFY.

“Can financial advisers just get bloody access to the ATO portal? Can we just jump that hurdle yesterday? This whole process would be astronomically easier,” O’Reilly said, adding, “not just for us, but more importantly for financial advice clients all over the country”.

Currently, only tax agents and BAS agents can access ATO information on behalf of a client.

Steps have been taken by Treasury, who in January released a consultation paper, Review of Tax Regulator Secrecy Exceptions, which sought feedback as to whether registered financial advisers should be allowed access to ATO-held information.

However, according to Treasury, giving financial advisers access would mean creating a platform, which “would be a significant cost to taxpayers for granting access to a relatively small cohort of financial advisers”.

Concerns relating to cyber security and further implementation costs have also been raised by Treasury.

Despite Treasury reluctance, many within the industry have argued that cost of implementation is outweighed by the potential benefits offered to clients and that cyber security concerns are misplaced.

The Financial Advice Association Australia stated earlier this year that by allowing access to the portal, the government would “reduce unnecessary delays and costs, ultimately supporting better outcomes for Australian consumers seeking financial advice”.

“We don’t even need access to the entire portal either,” O’Reilly argued on the podcast. “We would only need read access to very limited data, just the basic [information].”

O’Reilly explained that while access to the portal is absolutely a top priority for advisers, a softened stance from the Tax Office in recent years if a client goes over their contributions cap has provided some relief.

“There was a time in the past where if you went over, then it was just full whack of non-concessional contributions and there was nothing more that you could do,” he said.

“They’ve become a lot more lenient to the extent where the vast majority of Australians will get that letter saying, ‘Hey, you’ve over-contributed, do you want to take the money back out or do you want to leave it in there?’ And obviously the tax will square itself up.”

He added that from a client perspective, taking the risk that an employer has made an additional contribution to their super that puts them over the cap and receiving a letter from the ATO is worth getting the “maximum tax deduction possible”.

“It’s just about setting the expectation that ‘please note if your employer makes inconsistent contributions or if they’re not exactly on the schedule that has been indicated here, you might go over and the consequence is that you’re going to have some money effectively locked inside the superannuation environment until such a time as that’s reconciled by the ATO’,” O’Reilly said.

“Typically, you would then have the ability to get the money back.”

To hear more from James O’Reilly, tune in here.