Q&As

How Does the 2018/19 Federal Budget Affect SMEs with Amber Agustin

Monday May 28, 2018

Amber Agustin is a Partner in the Tax Practice of Clayton Utz, specialising in preventing, managing and resolving contentious tax matters. 

Amber Agustin

We had the pleasure of sitting down with Amber recently to discuss key challenges and opportunities facing the industry today. You can read the full Q&A below.

Can you tell us a little bit about yourself?

I am a Partner in Tax at Clayton Utz.  I act for a broad range of clients from major multinationals and ASX-listed companies to SMEs, privately-held groups and high-wealth individuals, providing strategic advice on the regulatory, investigative, administrative, litigation and commercial contexts of the tax system. I also act in matters involving multi-agency investigations, ATO access visits (raids), statutory notices and challenging ATO decisions, as well as R&D tax matters, tax agent disciplinary matters involving the Tax Practitioners Board, the accounting professional bodies, ATO and ASIC and tax professional negligence claims.

Your topic focuses on ‘How Does the 2018/19 Federal Budget Affect SMEs?’. Why is it important for practitioners to attend your session?

There are many commentators in this space talking about the technical changes for SMEs after the Budget, and this is of course essential and important. However, advisers also need to be able to see broader trends, predict emerging issues and understand how the broader structural and cultural issues within the ATO are likely to affect how the ATO will engage with taxpayers and their advisers. This will help advisers come away with not just the knowledge to advise reactively, but also to advise proactively. Of course, in my session, I will also cover the key proposed technical changes and where we expect to see potential for uncertainty and risk from these changes.

What are some of the big trends and developments you see ahead for the area?

At the system level, it's possible we will see:

  • structural change of the ATO;
  • decreased outsourcing and increased funding for more ATO staff; and
  • increased or strengthened oversight

At the operational level, it's possible we will see:

  • significantly increased focus on tax advisers;
  • increased focus on SMEs, privately-held groups and high-wealth individuals, once the ATO feels that their focus at the multinational level has yielded results;
  • increased use of data analysis and matching techniques;
  • continuing increased use of broad signals and taxpayer behaviour focused measures such as alerts and law companion rulings to seek to achieve broad changes in taxpayer behaviour;
  • an increased role for the Tax Practitioners Board; and
  • possible increased funding for IT systems

What are some of the issues for SMEs, privately-held groups and high-wealth individuals that may attract ATO attention?

We know that the ATO looks out for warning signs that there may be issues with a taxpayer. Where these issues are present, the ATO may look more closely:

  • benchmarking tax or economic performance against similar businesses shows significant variation;
  • low transparency of tax affairs;
  • large, one-off or unusual transactions, including transfer or shifting of wealth;
  • prior compliance history and previous engagements with the ATO;
  • tax outcomes inconsistent with the ATO's understanding of the intent of the legislation;
  • intentional non-compliance;
  • regularly taking controversial interpretations (according to the ATO) of the law;
  • lifestyle not supported by after-tax income;
  • tax-free personal use of business assets; or
  • limited or no governance and risk management systems

What are some of the areas of proposed technical/legislative changes announced in the Federal Budget?

At this session, we will cover the following specific issues:

  • removing tax deductibility for non-compliance;
  • tax specific measures coming out of the anti-phoenixing work of the Black Economy Taskforce;
  • extension of the instant asset write-off for small businesses for assets up to $20,000;
  • R&D tax incentive changes; and
  • changes for Div 7A, trusts and partnerships

What do you see as some of the key takeaways and benefits for practitioners for their practice from attending your session?

A good understanding of:

  • rapidly changing ATO engagement expectations for SMEs;
  • current areas of ATO interest in SMEs;
  • where we see the ATO moving over the next year; and
  • specific technical changes proposed in the Federal Budget

Amber is one of the few tax disputes lawyers with a breadth of experience in the litigation, commercial law, evidential, procedural, regulatory and administrative contexts of the tax system. This allows Amber to see tax disputes in their broader framework and develop resolution strategies that may not be visible from a narrower perspective. Amber's particular professional experience includes tax dispute resolution, multi-agency investigations, Part IVA, promoters penalties, complex debt matters, fraud and evasion, disciplinary matters, ATO (and state revenue) powers including raids/access and notices, complex document management, R&D (AusIndustry) and tax corporate governance for tax managers and Boards.

Learn more from Amber at the conference Tax Intensive for SME Advisers in the Royce Hotel Melbourne, on Wednesday June 20.

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