If you’re an ABN holder, you’ve probably come across the Australian Tax Office (ATO)’s client-agent linking process since it was rolled out in November 2023.
While the client-agent linking process can be extremely challenging to navigate (and has caused plenty of frustrations for clients and tax agents alike), we can’t deny that it serves an important purpose: protecting your sensitive business information.
We’ve been guiding clients through the process for over a year now, so in this article, we’ll share some of the key things we’ve learned and our top tips for making it easier.
What is client-agent linking?
Essentially, client-agent linking puts you in control of who can access your tax information. If you have an ABN, you now must explicitly nominate which tax agents, BAS agents or payroll service providers can act on your behalf. It’s important to note that this doesn’t apply to sole traders yet, but it will in the future.
You must complete the tax agent nomination process when you engage a new agent or change the authorisations given to an existing agent. For example, if you’ve engaged an agent to complete your BAS, but now you’d also like them to do your tax returns, you’ll need to go through the client-agent linking process again to authorise them to access your income tax information and complete that work on your behalf.
What are the benefits of client-agent linking?
The new system is very different from the previous one, where agents could connect themselves to your ATO records without your explicit permission. The new process helps prevent unauthorised access to your information and reduces the risk of identity theft.
The client-agent linking process puts the power in the client’s hands. You now have far greater ownership over who can view and access your sensitive data.
How does client-agent linking work in practice?
Only you, the taxpayer, can complete the linking process. Unfortunately, as the tax agents, we can’t do it for you.
Here are the steps you need to follow to complete the client-agent linking process:
- Set up your digital identity on myGovID.
- Link your myGovID to your ABN using Relationship Authorisation Manager (RAM).
- Authorise others to act on your behalf in RAM, if necessary.
- Log in to Online Services for Business.
- Find your chosen agent using their registered agent number (RAN) and nominate them.
- Alert the agent that you’ve completed the process, after which the agent has seven days to act on the nomination.
While this all sounds pretty simple, there are a few potentially frustrating hurdles, which we’ll discuss below.
Common client-agent linking challenges and how to overcome them
We’ve helped many clients through this process. Here are some common issues we’ve experienced:
Technical hurdles
The client-agent linking process requires you to access multiple apps and websites. You need to have a digital identity (myID) linked to your Australian Business Number (ABN) in Relationship Authorisation Manager (RAM) – that’s a lot of acronyms! For those who are less tech-savvy, this may present a challenge.
Solution: Give yourself plenty of time, especially if you need to get a myID or haven’t accessed some of these systems before.
Outdated Australian Business Register details
This is one of our most frequently encountered issues.
In step 2 of the linking process, you must link your MyGovID to your entity via Relationship Authorisation Manager (RAM). If your ABN details differ from those recorded in the Australian Business Register (ABR), this part of the process won’t work, and you won’t be able to move forward. Even minor discrepancies can cause delays.
Solution: Before you start the client-agent linking process, review your ABN details on the ABR and update them if necessary.
Confusing processes for complex business structures
Trusts, partnerships and companies with multiple directors may require additional steps, such as authorising specific individuals through RAM, or manual intervention by the ATO.
Solution: Know your business structure and have all relevant ABNs, TFNs and director details on hand. For complex structures, be aware that you may need to call the ATO directly, and the wait times can be lengthy.
Our top client-agent linking tips
While the system is imperfect, there are some things you can do to make things easier:
1. Know who can complete the process: Only directors listed on the ABR can complete the client-agent linking process. Make sure the right people are listed before you get started.
2. Know your structure and have your details ready: Familiarise yourself with your company structure, ABN, TFNs and who is listed as a director or trustee. If you’re unsure, ask your current accountant to provide this information.
3. Check ABR details before you get started: This is crucial. Log into the ABR, ensure everything is current and print your ABN extract for reference.
4. Allow enough time: Don’t wait until the last minute, especially if you need to contact the ATO for support. Phone wait times can be lengthy.
Need help nominating us as your tax agent?
While the client-agent linking process can be frustrating and time-consuming, its purpose – protecting your sensitive business information – is vitally important.
While we can’t complete the process for you, we can guide you through it. If you’re having trouble, we can schedule a phone or in-person meeting to walk you through the steps.
You can reach out to us by:
- calling us on 03 5221 6399
- emailing via info@davidsons.com.au.
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This article was written by Tax and Business Services Director Kylie McEwan.
Disclaimer: The information provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.