Listen to this episode here: Tax Strategies You Should Consider

Welcome to our blog for TALKING NUMBERS with Paul Jansz. In this article, we share our conversation with Miles Deayton, Principal Director at Deayton Tax Consulting (DTC). DTC is a firm that works closely with tax agents and accounting firms, providing expertise in a broad range of tax-related areas – from work-related expenses to International tax, from direct compliance to case review.

Mile’s Journey to Date

For many years, Miles had been working for the Australian Taxation Office (ATO), focusing on large business compliance, managing audit teams, developing these systems for compliance, and translating that into day-to-day procedures.

More recently, Miles has been working with small to medium firms, mainly on data and tax consulting. Miles and his team provide assistance and help to accounting firms when they have complex and difficult problems.

Work on Developing Partnerships

Miles says they are moving in the ‘virtual conversation’ direction, but they are not there yet. A role like a virtual partner is not always attractive to all businesses for a range of reasons. Miles and his team are just looking to develop relationships with firms that hold similar values on an ongoing basis. They keep working and developing the relationship with the client, understanding what they do and what they need.

Based on the relationship, they will be looking at services and specific topics they can deliver, such as tax training. After that, they will look down the track to do on-the-job training. The service is not a once-off thing, and the firm is developing knowledge through the whole process.

Miles emphasises it’s not like you can go to a firm, say, “Here is the problem, and here is the answer.” It’s an ongoing process of identifying the needs. For example, when a firm might not be interested in the research and development of international tax, they have to take that out of the training.

Miles says it’s important to look at how the firms position themselves strategically. When they start working with a firm, they would recommend some services, such as accounting or accountancy insurance. They might go to a firm and offer more preparatory work so ATO won’t pick on them. If the ATO does pick a firm, they can also help through the evidentiary process.

A Recent Example

Miles took the JobKeeper and cash flow boost as examples. ATO was adopting a fairly literal approach. Many companies know that they just have to prove they are carrying on a business, and they hired people.

However, Miles thinks a lot of practitioners looked at these very literal things. They get the money in the door to keep the business afloat, but they forget to think about the actual declining turnover. Only by taking a more strategic view of the situation can a business owner start developing the right strategy.

Miles has 20% of his clients putting their hand up for a cash flow boost, but Miles pointed out he needs to make sure that these businesses can keep going if the ATO comes knocking down the track. He says, if you’re strategic about what you’re doing, you’re actually factoring that into your work without a lot of costs. And this is where Miles and his team can help, thanks to their knowledge about how ATO works.

Tax Risk Management

Miles did quite a bit of work around putting a tax Risk Management Framework together from the OHS perspective (The Occupational Health and Safety Rights of Workers). He thinks it’s important to equip all accounting firms with the risk management mindset.

For Miles, risk management always comes first, and it should cover all bases. The safety measures and the risk management plan they have in place can mitigate many costly risks.

New Changes

Miles points out that most practitioners would be seeing the ATO is starting to go back to pre-COVID times, in terms of chasing debt lodgement and imposing penalties. The ATO has just put out some guidelines on allocated profits, and professional practitioners, such as doctors, dentists, lawyers and accountants are all feeling some pressures.

Another hot topic is around international tax, which is an ongoing issue. As there’s more cooperation between OECD countries, the international tax jurisdictions are getting more complicated; it’s getting more difficult to optimise international tax.

A Piece of Advice

Miles addresses that figuring out what you want to do and achieve is the start. He suggests business owners think about some simple questions, such as: “What are you good at?” and “Where you want to reduce your stress or costs.” He and his team will be able to help once you know you are going. For instance, they probably will suggest transfer pricing for international tax purposes.