Client Agent Linking – Issues & Challenges

Client Agent Linking (CAL) has been in action since 13 November 2023. CAL was created to reduce identity-related fraud attempts, including criminals taking over agents’ identities. CAL ensures that a client has authorised an agent to access his/her tax records. Before CAL, all an agent had to do was enter a client’s ABN into their Online Services for Agents portal to connect himself to the client. This connection method has become very unsafe since ABN data is easily attainable on the ABN Lookup site. This has meant that criminals could easily create a scenario where clients’ data is compromised and misused.

No one disputes that creating a process whereby clients’ data is kept secure and criminal activity is kept to a minimum, is warranted. As cybercrime increases, the more we can use technology to help us fight the war, the better! CAL is part of this technology arsenal, however, since its live delivery, both agents and clients alike are finding that from a practical perspective, CAL is less than perfect! Many issues and challenges have arisen as a result of CAL. Some of these are described below.

Issues and Challenges for Clients

• CAL requires the set up of myGovID and Relationship Authorisation Manager (RAM). Some clients find setting this up difficult and even harder to access help from the ATO.
• The process is quite complicated. It involves setting up a myGovID, linking the ABN to the myGovID in RAM, logging into Online Services for Business (OSB), nominating a new agent and finally advising the agent that the nomination has occurred.
• The above process is made more difficult if a financial structure is complicated e.g. involves trusts, self-managed super funds etc
• CAL requires some level of technological expertise and experience which is not available to all clients.
• Setting up a myGovID requires strong identification proof which includes a passport. Not everyone has a passport and applying for one is difficult, time-consuming and expensive. Currently, there isn’t any process available to clients who do not have a passport.
• For CAL to work, a client’s Australian Business Register (ABR) must be current and up to date. A client must access his/her ABR and update the details before beginning the CAL process. This means more time and more frustration.
• Setting up CAL must be done by the client only. Agents cannot assist the client for security reasons. If a client is not tech-savvy or doesn’t understand the steps required, not being able to ask their agent for help is an issue!
• Clients can ring the ATO for assistance in setting up CAL, however, this can be very time-consuming.
• If a client cannot complete the CAL, he/she won’t be able to use an agent for tax lodgements. If this occurs, lodgements will be late and tax payments will be on hold. As a result, such clients may face penalties from the ATO (even though this situation isn’t their fault!). Clients will be forced to process their lodgements via OSB themselves. Of course, some clients are capable of self-lodgement, however, the more complex their tax situation, the less likely they will want to attempt lodgements without some advice and assistance for fear of making errors etc. These are the clients who will fall through the cracks!
• If a client wants to change from one agent to another but cannot action CAL successfully, the client will be forced to remain with the original agent. This isn’t ideal if the client/agent relationship has broken down.

Issues and Challenges for Agents

• A major issue for BAS agents is losing access to current clients in Online Services for Agents (OSFA). This occurs when a tax agent uses the wrong identifier when setting up a new client for income tax lodgements. The correct identifier is the tax file number but many tax agents enter the client’s ABN instead. When an ABN is chosen, this instantly removes the BAS agent’s access to the client. This is frustrating for both the BAS agent and the client because to link to the client again, the client has to go through the CAL process even if the BAS agent and the client may have been engaged for many years! I have been told anecdotally that this is also happening between BAS agents. For example, if one BAS agent is responsible for payroll and another for BAS lodgement, each time payroll is lodged via STP or a BAS is lodged, each agent removes the other from OSFA – crazy stuff! As you can imagine, this is very frustrating for clients but can also create friction between agents. The whole tax landscape is on a slippery slope due to CAL!
• Following the above issue, if a tax agent uses the ABN as the identifier in OSFA for a new client, s/he will not see the option to add the income tax account for that client. In this case, the tax agent must ask the new client to perform the CAL process again. As you can imagine, this will be very frustrating for the new client – not a great way to begin the client-agent relationship! Tax agents need to understand that using the TFN identifier provides them access to all client accounts i.e. income tax, FBT and ICA (BAS).
• BAS agents are losing clients to tax agents as a result of CAL. The complexity of CAL for some clients is forcing them to remain with a tax agent to lodge all tax liabilities even if they would like to engage a BAS agent to assist them with BAS, bookkeeping and payroll. Clients can’t be bothered to go through the CAL process for every agent so they are taking the easy way out and asking their tax agents to do the lot!
• Some agents find that CAL is taking too much of their time (for which most are not charging). Even though agents cannot assist clients with CAL, clients are asking for help nonetheless. Until the CAL process is improved, many agents have decided against engaging new clients.
• All agents, BAS or tax are losing work because potential and current clients find CAL too complex and time-consuming. Some clients are avoiding navigating the CAL process and are instead choosing to go it alone. This is not ideal for agents wishing to build their client base or for clients who need tax assistance and advice (which is most of them!).
• When a client successfully links to a new agent, the client must contact the agent to advise him/her. From there, the agent can accept the new client in OSFA. If, however, the client does not advise the agent or the agent doesn’t receive/read the message in the current time frame (currently 28 days), then the CAL is reset and the whole process will have to begin again. A better notification system is required here.

As you can see, many issues and challenges are being met by agents and clients due to CAL. This situation has occurred because CAL was not fully tested at the time of its release. I believe more testing, research and education should have been carried out before going live. While it works on the whole, for those clients with complex tax needs or who are technology-challenged, CAL is too hard! Until these issues are resolved, I believe CAL should be removed. If this does not happen, agents will lose work, clients’ lodgements and payments will stop and the tax industry as a whole may implode! Hopefully, the ATO will review their decision to continue to implement CAL without first resolving these issues.