Study of Tax Practitioners’ Costs arising
from Small Business CGT Concessions
The Survey
This survey is being conducted by Atax (Australian Taxation Studies Program) at The
University of New South Wales, on behalf of the Board of Taxation. It has been cleared for
release by the Statistical Clearing House (Australian Government Statistical Clearing House
Approval Number XXXXXX). The Australian Taxation Office (ATO) is helping by sending
out the survey forms to randomly selected tax practitioners. Please return completed survey
forms to Atax in the provided reply paid envelopes by dd Month 2005.
Scope of the survey
The Board of Taxation is interested in your views about the compliance costs of Small
Business CGT Concessions contained in Division 152 of the Income Tax Assessment Act
1997. These concessions provide some relief to small businesses by reducing their capital
gains tax provided that certain conditions are met. The aim of this study is to identify the
extra costs (referred to in this survey as compliance costs) you as a practitioner may have
incurred, as a result of the CGT concessions, (whether out-of-pocket expenses or because of
the time you have had to spend) and to determine whether you have been able to pass any or
all of these costs on to your clients.
Confidentiality
The mail out will be done by the ATO (neither the Board of Taxation nor Atax has access to
participants’ addresses). All responses received by Atax will be treated as strictly confidential
and the ATO will not have access to individual replies. Please note that all responses are
anonymous unless participants voluntarily identify themselves for a post-survey data
verification exercise. In any case, the confidentiality of your reply will be preserved with only
statistical summaries of the survey data being made available to the Board of Taxation.
Completing the Questionnaire
You can answer most questions by ticking the appropriate boxes provided. Answering the
survey should take about 15 to 20 minutes.
Need help?
If you have any questions about this survey, please contact Binh Tran-Nam at Atax by phone
on 02–9385 9361 or by emailing <b.tran-nam@unsw.edu.au>.
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A.
BACKGROUND DETAILS OF PRACTITIONERS
Please tick an appropriate box.
1.
Are you?
A sole trader ......................................................... 
A partner ............................................................... 
An employee ......................................................... 
Other (please state) ............................................... 
2.
2
3
4
In rough terms, please indicate the turnover of your practice.
$100,000 or less .................................................... 
$100,001 – $500,000 ............................................ 
$500,001 – $1,000,000 ......................................... 
$1,000,001 – $10,000,000 .................................... 
$10,000,001 or more............................................. 
3.
1
1
2
3
4
5
In rough terms, please indicate the number of clients for whom your practice provides
tax services per year.
20 or less ............................................................... 
21 – 100 ................................................................ 
101 – 500 .............................................................. 
501 – 1,000 ........................................................... 
1,001 or more........................................................ 
1
2
3
4
5
4.
Estimate, for a typical year, the number of clients of the practice who obtain advice on
the Small Business CGT Concessions.
_________ clients
5.
Of those clients in Question 4, how many obtain advice in respect of an actual CGT
transaction.
_________ clients
6.
Of those clients in Question 5, how many actually qualify for the Small Business CGT
Concessions.
_________ clients
7.
Please indicate the value of your chargeable rate per hour (approximately).
$50 or less ............................................................. 
$51 – $100 ............................................................ 
$101 – $200 .......................................................... 
$201 – $300 .......................................................... 
$301 – $400 .......................................................... 
$400 or more......................................................... 
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2
3
4
5
6
2
B.
TRANSITIONAL COSTS OF SMALL BUSINESS CGT
CONCESSIONS
This section is about initial, one-off costs that you may have incurred as a result of the
introduction of the Small Business CGT Concessions in 1999, and whether or not you have
been able to pass any or all of these costs on to your clients.
8.
Estimate the number of hours you personally spent on learning about the operation of
the Small Business CGT Concessions.
Reading & self learning ........................................................................
Discussing with colleagues...................................................................
Attending internal training ...................................................................
Attending external seminars (including travelling time) ......................
Other (please state) ...............................................................................
9.
Did you instruct your colleagues about the Small Business CGT Concessions?
No ......................................................................... 
Yes ........................................................................ 
10.
________ hrs
________ hrs
________ hrs
________ hrs
________ hrs
1
2
If you ticked Yes to Question 9, please estimate the time you spent on internal training
as an instructor (excluding external seminars).
________ hrs
11.
What value per hour would you consider as appropriate for the activities you
performed in Questions 8 and 10?
$ ________ per hour
12.
Did you incur costs (other than your time) to attend a seminar or other training session
to learn about the Small Business CGT Concessions?
No ......................................................................... 
Yes ........................................................................ 
13.
1
2
If you ticked Yes to Question 12, what were those costs? (If the seminar also covered
other topics, please allocate costs according to the percentage time spent on the Small
Business CGT Concessions)
Registration fee
Travel/accommodation costs
14.
Do you think you will need further training on the Small Business CGT Concessions?
No ......................................................................... 
Yes ........................................................................ 
15.
$________
$________s
1
2
If you ticked Yes to Question 14, please briefly indicate on which aspects of the Small
Business CGT Concessions you would require further training.
______________________________________________________________________
3
16.
Did the cost of your practice’s tax return preparation software increase significantly at
the time of the introduction of the Small Business CGT Concessions and other new
legislation introduced at the same time?
No, it did not increase more than usual ................ 
Yes, it increased more than usual ......................... 
I cannot recall noticing any significant increase .. 
17.
1
2
3
If you ticked Yes to Question 16 (Box 2), please indicate the approximate increase in
the software cost.
$________
18.
Have you had any problems with the manner in which your tax return preparation
software has handled clients with Small Business CGT Concessions?
This would include time spent by you in sorting out the problems or discussing them
with software representatives.
No ......................................................................... 
Yes ........................................................................ 
19.
1
2
If you ticked Yes to Question 18, please estimate your time spent because of these
problems.
________ hrs
20.
Are there other transitional costs which you incurred as a result of the Small Business
CGT Concessions that you do not believe have been incorporated into the above
questions?
No ......................................................................... 
Yes ........................................................................ 
21.
1
2
If you ticked Yes to Question 20, please indicate the nature and estimate of these costs.
Nature: ________________________________________________
22.
$________
Estimate the percentage of your total transitional costs of the Small Business CGT
Concessions that you have not been able to ultimately pass on to your clients?
______ %
23.
Did the Small Business CGT Concessions persuade any of your clients to change their
business structure?
No ......................................................................... 
Yes ........................................................................ 
24.
1
2
If you ticked Yes to Question 23, please estimate the number of affected clients.
________ clients
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C. ONGOING COSTS OF SMALL BUSINESS CGT CONCESSIONS
This section is about ongoing (recurrent) costs that you may have incurred as a result of the
Small Business CGT Concessions and whether or not you have been able to pass any or all
of these costs on to your clients.
25.
For the clients for whom you have had to specifically consider the application of the
Small Business CGT Concessions, would you say it had any effect on your fee charged?
No ......................................................................... 
Yes ........................................................................ 
26.
1
2
If you ticked Yes to Question 25, please estimate the average fee increase per affected
client.
$________
27.
28.
For clients where you specifically considered the CGT concessions but who you
advised not to or who did not claim Small Business CGT Concessions, what percentage
would you put into each of the following categories?
Basic conditions were not met ..................................................................
______ %
Costs of pursuing the claim did not make it worthwhile
compared to the value of the deduction ....................................................
______ %
A number of factors have been identified as potentially leading to high Small Business
CGT Concessions compliance costs in terms of time spent. A list of these factors is
below. On a scale of 0 to 10 (where 0 implies no impact, 5 implies a moderate impact
and 10 implies significant impact) please score each of these factors as a ‘driver’ of
Small Business CGT Concessions compliance costs.
SCORE
(0 to 10)
(a) The complexity of the legislation..........................................................
____
(b) The length of the legislation .................................................................
____
(c) The maximum net asset value test ........................................................
____
(d) The active asset test ..............................................................................
____
(e) The controlling individual test ..............................................................
____
(f) The CGT concession stakeholder test ...................................................
____
(g) The need to advise clients to change their business structures .............
____
(h) Lack of clear guidance from the ATO ..................................................
____
(i) Other (please state) ..................................................................................
____
_____________________________________________________
29.
Please identify from the list in Question 28 the three most significant factors that lead to
high Small Business CGT Concessions compliance costs. Are there particular
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improvements you consider would make compliance costs (ie, time spent) lower for
each factor?
Factor (eg,(c),(a),(f) etc)
30.
Do you now routinely advise clients about compliance with the Small Business CGT
Concessions (where appropriate) as part of advice on business structuring?
No ......................................................................... 
Yes ........................................................................ 
31.
Suggestion
1
2
If you ticked Yes to Question 30, please estimate your average time spent on this aspect
of the advice.
________ hrs
32.
In advising clients about Small Business CGT Concessions, do you often have to seek
advice from other tax specialists?
No ......................................................................... 
Yes ........................................................................ 
33.
1
2
If you ticked Yes to Question 32, please estimate for a typical year:
(a) the number of clients requiring specialist advice
________ clients
(b) the average specialist cost per client
34.
Are there any ongoing costs which you incurred as a result of the Small Business CGT
Concessions that you do not believe have been incorporated into the above questions?
No ......................................................................... 
Yes ........................................................................ 
35.
$ _____________
1
2
If you ticked Yes to Question 34, please indicate the nature and estimate of these costs.
Nature: ___________________________________________________
___________________________________________________
36.
$________
Keeping the above answers in mind, estimate the annual recurrent hours of your time
spent on issues relating to the Small Business CGT Concessions (irrespective of
whether these hours are chargable or not).
________hrs
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37.
Estimate the percentage of those costs that you can charge your clients.
________ %
D. FURTHER COMMENTS
Please use the scale below to indicate your attitude to the following statements. Please
circle the appropriate number.
strongly disagree
1
38.
disagree
neutral/don’t know
2
3
agree
4
strongly agree
5
The Small Business CGT Concessions are easy to understand and apply.
1----------2----------3----------4----------5
39.
The explanation of the Small Business CGT Concessions in the ATO’s tax return
instruction booklet is clear.
1----------2----------3----------4----------5
40.
My practice’s transitional costs (eg, initial learning or administrative costs) arising
from the Small Business CGT Concessions were significant.
1----------2----------3----------4----------5
41.
If you circled the agree (4) or strongly agree (5) option in Question 40, please
estimate your practice’s transitional costs.
$________
42.
My practice has been able to pass on all of its transitional costs of the Small Business
CGT Concessions to its clients.
1----------2----------3----------4----------5
43.
If you circled the disagree (2) or strongly disagree (1) option in Question 42, please
estimate the percentage of your practice’s transitional costs that have been passed on
to its clients.
______ %
44.
The Small Business CGT Concessions affect the tax affairs of most of clients of my
practice every year.
1----------2----------3----------4----------5
45.
As a result of the introduction of the Small Business CGT Concessions, my practice
has to spend more time on my clients’ tax returns every year.
1----------2----------3----------4----------5
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46.
If you circled the agree (4) or strongly agree (5) option in Question 45, please
estimate the average additional number of hours your practice has to spend on clients
affected by the Small Business CGT Concessions.
________ hrs
47.
For those clients who have been affected by the Small Business CGT Concessions,
my practice has been able to charge them for all of the extra time.
1----------2----------3----------4----------5
47.
If you circled the disagree (2) or strongly disagree (1) option in Question 47, please
estimate the percentage of time that your practice has not been able to pass on to
clients.
______ %
49.
The Small Business CGT Concessions are easier to apply now than five years ago.
1----------2----------3----------4----------5
50.
Please add any other comments you may have about the Small Business CGT
Concessions, particularly suggestions as to how they can be improved to reduce your
clients’ compliance costs.
Please provide an estimate of the time taken to complete this form:
____ hrs ____ mins
To improve the integrity of the data, the research team is proposing to conduct a post-survey data
verification exercise. If you are willing to participate in this data verification exercise, please provide
us with your name and contact telephone number or email address. Providing this information is
entirely voluntary and the information will remain confidential to the University.
Name: ______________________ Tel: (0 ) _______________ Email: ________________________
Thank you very much for completing this form. The data you have provided
will be very useful and will remain strictly confidential.
Please return this form in the enclosed reply-paid envelope by XXX 2005.
Office Use Only
Date received: ____/____/____ Date checked: ____/____/____
Date verified: ____/____/___
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