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Newsletter from the Tax Practitioners Board
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Issue 28 | December 2018 - General edition

Message from the Chair

As we approach the end of another year, I am pleased to reflect on the considerable progress made by both the TPB and registered tax practitioners in 2018.

Since the commencement of the Tax Agent Services Act 2009 (TASA) and the legislated Code of Professional Conduct (Code), the registered tax practitioner population in Australia has tripled from around 26,000 registered tax practitioners to 78,460 as at 30 November 2018.

During 2018, the TPB continued to protect consumers by ensuring tax practitioners met the registration and renewal requirements and were supported to respond to the challenges of rapidly evolving business practices and demanding client expectations.

The year in review

Our Annual Report 2017-18 was tabled in Parliament on 26 October. In my summary, I highlight:

  • our work with tax (financial) advisers to process the significant volume of registration and renewal applications for some 19,000 tax (financial) advisers
  • a 16% increase in our registration and renewal workload compared to the previous financial year. We prioritised new practitioner applications over renewals to allow applicants, once registered, to commence their business with minimal delays
  • an improved online experience and the introduction of enhanced online services to greatly improve the registration and renewal process
  • further guidance we provided on emerging issues such as cyber security and outsourcing and offshoring.

You can read more in our annual report.

The year ahead

Looking forward to 2019, we will continue working to uphold the standards of the tax profession, however we are increasingly facing challenges in regulating practitioners.

Research suggests a connection between a small number of tax practitioners and high-risk tax behaviour, which is supported by referrals from the Australian Taxation Office (ATO), and complaints from the public and other practitioners.

We are concerned by the emerging evidence suggesting a small number of registered tax practitioners are not meeting appropriate standards. To address these issues, we have acted to:  

  • establish a black economy investigations team, working closely with the ATO to investigate, prosecute and potentially terminate registration of tax practitioners found to be aiding client or dealing in the black economy
  • increase our investigations and legal staff to manage additional referrals from the ATO for tax practitioners who are incorrectly managing their own tax affairs, and the affairs of their clients
  • share information with other agencies and use data analytics to identify and target practitioners who pose the highest risk. We are also using this information to identify and act on entities providing tax agent services who are not registered with the TPB
  • increase visibility of the outcomes of our investigations and will be ‘naming and shaming’ tax practitioners found to be failing to comply with their obligations
  • apply the full range of sanctions available to impose, including termination of registration. Where relevant, we are working with other agencies such as the ATO, ASIC and Federal and State police on joint strategies for investigation into tax crime or misconduct
  • undertake a strategic review of our internal operations to drive innovation, improve efficiencies, and leverage our technology and data analytics
  • implement our CPE review strategy to ensure practitioners remain up to date. 

As we move into the new year, we are launching a new strategy in relation to tax practitioners’ personal tax obligations. ­Moving forward, our business will have an increased focus on targeting professional and ethical misconduct and applying appropriate sanctions. We also acknowledge that the vast majority of tax practitioners do the right thing and we encourage you to keep up the good work.

We wish you a safe and enjoyable break, and look forward to continuing our work with you in the new year.
 

Ian R Taylor
Chair, Tax Practitioners Board

Office closure

Our offices close from 5pm (ADST) on Friday 21 December 2018 and re-open on Wednesday 2 January 2019. You can still use our online applications through My Profile and website during this time.

It's time to settle your outstanding personal tax obligations

We have launched a new compliance strategy calling on registered tax practitioners to settle their outstanding personal tax obligations. New data from our analytics service shows about five per cent of practitioners have late lodgments with the ATO, including activity statements and tax returns. Seven per cent of tax practitioners have outstanding ATO debts, totalling nearly $115 million, without arrangement to repay these bills.  Over 2,500 tax practitioners have not lodged one or more of their personal income tax returns or for those of their associated entities, and over 1,000 have more than one outstanding BAS or for their associated entities. Of these numbers, nearly 500 tax practitioners have a combination of both. 

We’ve issued a call to action to all practitioners to ensure that your tax affairs, and those of all related entities, are fully compliant.

Read more

Streamlining our complaints process

A large percentage of complaints received by the TPB are unable to be resolved or addressed by us directly. To better tailor our approach to complaints, we have reviewed our internal processes, and have updated the information on our website about complaints we can and cannot address. The types of complaints we can’t act on may include:

  • services not considered to be tax agent, BAS or tax (financial) advice services
  • behaviour of tax practitioners that does not breach the TASA 
  • fee and commercial disputes.

We also find many complaints can be resolved mutually between a tax practitioner and their client without TPB involvement. We encourage clients to try to resolve any issues directly with their tax practitioners first, whenever possible. When we receive a complaint, we’ll ask what steps you have taken to come to a resolution.

Streamlining our complaints process will enable us to focus our attention on complaints relating to high risk issues.

Read more about our complaints process.

Is your CPE up to date? 

Our work on reviewing selected tax practitioners’ continuing professional education (CPE) records is continuing with 76% of tax practitioners reviewed found to be compliant with our CPE policy.

So far, 609 tax practitioners have been randomly selected for a review. Of those who were found to be non-compliant (146):

  • 109 were issued with educational make up requirements
  • 21 surrendered their registration
  • 13 are currently under investigation.

A further 101 CPE reviews are in progress.

Don’t forget you must maintain records and evidence of CPE activities, including the details and hours completed. Failure to comply with this policy may lead to the commencement of a formal investigation that could result in an administrative sanction.

Learn more about our CPE requirements

Registration suspended, and order imposed

We recently investigated a tax agent company after being notified by the ATO they were conducting an audit into the company’s lodgments. The ATO made adjustments to 15 clients, with a tax shortfall of $101,653, penalties of $20,576, and an average adjustment to assessable income of $17,669 for each client.

After an investigation we found the company had breached the Code by failing to:

  • comply with the taxation laws in the conduct of its personal affairs
  • ensure a tax agent service it provided, or was provided on its behalf, was provided competently
  • maintain knowledge and skills relevant to the tax agent services provided by its sole director and supervising agent
  • take reasonable care in ascertaining a client's state of affairs and to ensure the taxation laws were applied correctly.

It was also found the company had disclosed information relating to their clients’ affairs without their permission or a legal duty to do so.

We suspended the company’s tax agent registration for a period of 12 months and ordered it and/or the sole director to:

  • bring all lodgments up to date by a set date
  • either pay its outstanding liabilities in full, or enter into a formal payment arrangement with the ATO
  • complete and pass a course in relation to the Code.

If the company does not comply with the order, further action can be taken, and the company director’s fitness and propriety may be taken into consideration in relation to their individual registration as a tax agent.

For the latest compliance updates follow us on Twitter and LinkedIn

Federal Court upholds TPB decision

We have welcomed the Federal Court’s decision to uphold our determination to reject the tax agent registration of Mr Philip Ham. Mr Ham was sued by a former client for breaches of ‘fiduciary obligations’ after he personally derived millions of dollars from the sale of land in which his former client had an interest.

In 2017, the Administrative Appeals Tribunal affirmed the TPB decision. Mr Ham pursued his case with an appeal to the Federal Court which has been dismissed.

The Federal Court’s decision confirms the high ethical and professional standards expected of a trusted adviser like a tax practitioner and serves as an important reminder for all members of the tax profession to act with competence and integrity, to ensure the community can have confidence that services are provided with professionalism. We take these matters seriously and will be continuing our strong focus on tax practitioner compliance.

Read more in our media release

TPB providing greater security and user experience

We achieved a significant milestone in our digital journey recently with the successful launch of our online services project, further improving and securing your online interaction with the TPB.

A stronger username (instead of your publicly available TPB registration number) and password, two-factor authentication and proof of identity (POI) checks for individual practitioners are all part of the enhanced security measures we have implemented to protect your information.  These changes are part of a whole-of-government initiative.

Our online services also integrate new and improved online registration, renewal, annual declaration and complaint forms, following extensive user-testing research. While reducing the average time it takes to complete these forms, the forms also include new features such as pre-filling of data, data validation, automatic saving of data and the ability to complete the forms over one or several sessions.

So far, we’ve received over 1,200 registration applications, 2,950 annual declarations, 4,260 updates in My Profile and 280 complaint forms through our enhanced online service. About 88% of tax practitioners completing their annual declaration or registration application online successfully completed their POI verification.

Update your username and password in My Profile

Free webinars

Start planning your CPE for 2019 and register for our free webinars. We have a range of topics available that will help you maintain your knowledge and skills relevant to the tax practitioner services you provide. These sessions are free and may count towards your CPE. Some of our new topics for 2019 include:

  • Improving your online experience
  • Tax practitioner compliance update
  • Privacy and securing personal information.
Register now

New payroll qualification meets Board requirements

The new Diploma of Payroll Services FNS50417 will help meet the education requirements to register as a BAS agent. If you’re already registered and provide payroll services, you may consider undertaking this course or component units to keep up to date with payroll technology or further increase your knowledge in payroll services. This course will also contribute to your ongoing CPE.

Visit training.gov.au for full course details

Show you're registered

Join the 31% of registered tax agents and 58% of registered BAS agents who have downloaded their free TPB Registered tax practitioner symbol. The symbol shows you’re registered with the TPB and helps promote consumer confidence. Our guidelines show various ways you can use your symbol to promote your services. Remember you must include your TPB status and registration number when you display your symbol.

Download your symbol now

Make sure your details are up to date

You must ensure your contact details are up to date in My Profile so you don’t miss out on important reminders and updates from us. With the recent introduction of two-factor authentication, we will also use your email address or mobile phone number (depending on your preference) to send a code to confirm your identity, should you forget your username or password. So, it is even more important for you to promptly update any changes to your details.

Update your details in My Profile

Your feedback

We invite your feedback on topics or issues you would like us to address in future editions of TPB eNews.

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About the Tax Practitioners Board
The Tax Practitioners Board (TPB) was established to regulate tax practitioners in order to protect consumers. The TPB assures the community that tax practitioners meet the appropriate standards of professional and ethical conduct.
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