After weeks of frustrated clients and equally frustrated team members trying to onboard new clients, we decided to run a trial on one of the team’s own funds. Luckily, our ecosystem has a number of Tax Agents that we were able to run the test on. The following is the test we ran and what we experienced along the way.
New Client has agreed to use our services
The first step in this process was to insert the Client-Agent Linking step into our comprehensive implementation process for our takeover funds. We added the following paragraph to the email that goes out with our Fund Implementation Checklist.
Client-Agent Linking:
Previously, when taking over an existing SMSF, we could simply add the SMSF to our Tax Agent List once we received back our signed Engagement Pack. Recently, the ATO have decided to change this process and the SMSF Trustee is now required to link us as the Tax Agent for the SMSF first. We are unable to add the SMSF to our Tax Agent List until this linking is completed by the client. Your client will need to follow the steps outlined here - https://www.ato.gov.au/tax-and-super-professionals/digital-services/in-detail/client-agent-linking-steps. The Tax Agent details are: Keep It Simple Super Pty Ltd – Tax Agent Number xxxxxxx
At this stage there is nothing else that we can do but wait for the client to complete the linking process and notify us.
Sorry we can’t help you
The first thing our Accountant and Adviser referrals ask us is if we can help the client with the linking process. Unfortunately, as the process is completed via MyGov, we can’t assist the client. So, the client is left to try to make sense of the ATO’s step by step guide.
The process commences – Possibly Step 1 & 2 but most likely start at Step 3
Our test was to move one of teams’ funds from one of the Tax Agents in our ecosystem to another. Luckily the SMSF Trustee already had access to online services so we could skip Steps 1 and 2.
But Step 1 and 2 might just be where your client frustration begins….
Firstly, before you start Step 1 & 2, the instructions tell clients they need to the Principal Authority. If they click through to the definition, they will see a long list of who might be the authority (for a business) so here is where the confusion begins because nowhere on this page does it mention SMSFs.
For SMSFs, the Principal Authority can be any individual trustee or corporate trustee director.
The client then moves onto Step 1 which is to set up myGovID. It is likely the client has myGov but they may not have myGovID. Given the names are so similar, is there any wonder that the client might skip to Step 2 thinking they’ve already done Step 1.
Nowhere on the instructions does it make it truly clear to the client that myGov and myGovID are two vastly different things.
The client needs to make sure that they end up with a Strong identify strength, otherwise they have to call the ATO when they get to Step 2. They can’t get Strong identity strength without a passport (so maybe they have to get one of those).
At Step 2, the client has to log into the ATO’s Relationship Authorisation Manager (RAM) using their myGovID and check if they can see the SMSF. If they can’t they have to select “Link my business” (even though it is an SMSF they are trying to link) and if they still can’t see the SMSF then they need to call the ABR to update the SMSF’s ABN details.
OK, so we are not even at Step 3 and the client has had to:
have access to a computer with an internet connection
find the ATO instructions online
set up their myGovID
If they don’t have a passport, get one so they have Strong identity strength (NOTE getting a passport can take 6 weeks or more) OR
Remember that they will need to call the RAM Contact Number at Step 2 if they only have Standard identity strength
Log into the RAM page with their MyGov ID if they have Strong identity strength OR call the RAM Contact Number
Follow the eight steps on the RAM instructions page to link their SMSF
If they can’t find their SMSF via RAM, call the ABR to update their SMSF’s details
Is anyone reading this thinking, wow what a nice easy, simple process for our client to complete!!
Step 3 – Log into Online Services
So back to our test, at Step 3, we had to log into Online Services (so another government system, so far we’ve had: MyGov, MyGovID, RAM, ABR, Online Services….)
This step was simple enough as the Trustee had MyGovID set up with a Strong identity strength. Once logged in, they just clicked on the SMSF and landed on the following screen.
Step 4 – Nominate the Agent
The ATO’s steps here all made sense and were simple enough to follow. Click on Profile and then Tax Agents Details. The page that opened looked like this:
Then it was a simple case of clicking Add beside Agent nominations. We provide the client with the name of the Agent and the Tax Agent number to make it easy enough for our clients to find us and we suggest you do this too to save yourself another phone call. Once the details of the new Tax Agent were added to the search box, they were found, and the Tax Agent details were displayed as below:
It was then just a case of ticking the declaration and clicking submit. Off the nomination request went to the ATO and the page displayed (below) advises the SMSF Trustee that the nomination will stay active for 28 days and that they “may” want to advise the Tax Agent that they have made the nomination.
When you give your potential new clients information about Client Linking be sure to tell them to let you know ASAP.
What does the Agent need to do?
In our test the SMSF Trustee was successful in making the nomination. But you can see from the details above just how onerous this process might be for a Trustee, particularly, if they don’t spend their days on a computer.
The ATOs guide to Agents - https://www.ato.gov.au/tax-and-super-professionals/digital-services/in-detail/agent-checklist-for-client-to-agent-linking-process - is clear that we can guide them through the process but we “can't ask your client to share their myGovID for you to use or share their log in code with you to complete the nomination process for them”.
And if you think the client might have had a difficult time, it is not all a walk in the park at the Agent end either.
MOST IMPORTANTLY, if you are nominating yourself as the Tax Agent for Income Tax AND Activity Statement purposes YOU MUST DO THIS USING THE SMSF TFN (NOT THE ABN):
Log into Online services using MyGov ID
Select My Practice/Add Client
Select non-individual
Select TFN and input the TFN (DO NOT INPUT ABN)
Enter Client Name (DO NOT INPUT ABN)
Click Search
Select Income Tax
If Activity Statement shows a link AND YOU WANT TO BE THE AGENT FOR ACTIVITY STATEMENT PURPOSES, tick this box
Update for your communication preferences
Check the Summary and Submit
In this test case we were successful, but it did highlight to us very clearly just how many ducks needed to be in a row for it to be a smooth process.
Our sister business Best Practice SMSF has produced a quick video to assist with this process. We also send new takeover clients to the following link if they are interested - https://www.bestpracticesmsf.com.au/client-to-agent-linking-tutorial.
Keep It Simple Super provides wholesale SMSF Administration services that rely on simple workflows that remove complexity and give you back your time. For 15 years, these workflows have helped Financial Advisers and Accountants build and grow services for their clients. Get in touch now.