Australia’s peak accounting and bookkeeping organisations are calling on Assistant Treasurer Stephen Jones to renegotiate a set of fresh industry rules, arguing tax practitioners will struggle to meet the August 1 compliance deadline.
On July 1, the Assistant Treasurer signed a legislative instrument outlining eight additional obligations for tax and accounting professionals under the Tax Agent Services’ Code of Professional Conduct.
The changes, designed to minimise misconduct and enhance confidence in the tax system, came as a surprise to industry participants.
Now, leading industry groups say the new obligations, which come into effect August 1, could impose significant compliance burdens on tax practitioners who already adhere to the Code.
“A professional practice is probably meeting 99% of the intent behind this determination, which is that tax agents should be professional, competent, and have honesty and integrity in their behaviour,” Institute of Certified Bookkeepers (ICB) executive director Matthew Addison told SmartCompany.
“But what this determination does is put various practical behaviors in place to prove that.”
The legislative instrument underscores eight key changes to the Code, strengthening a set of pre-existing principles that tax professionals must follow.
Some of the changes are relatively straightforward, requiring tax professionals to avoid any behaviour they know, or ought to know, could undermine public trust in the tax profession.
Yet some elements have proven particularly contentious, prompting a joint letter to the Assistant Treasurer.
The letter, sent Monday, counts organisations like CPA Australia, the Institute of Public Accountants, and the Institute of Certified Bookkeepers as signatories.
It calls for the Assistant Treasurer to withdraw the current legislative instrument, reopen consultation over the rules, and push back their start date by six months.
The joint signatories “welcome more robust and effective regulation of the tax system and the tax profession,” the letter said.
“However, rules that create inconsistencies and uncertainties work against compliance and good governance.
“In practice, tax practitioners, many of them in small businesses, will find it difficult to comply with certain aspects of the [legislative instrument] in its current form.”
Of particular concern is a rule change requiring tax practitioners to highlight “any matter” that could significantly influence a client’s decision to engage the accountant or bookkeeper.
Accountants and bookkeepers are “very concerned” by the change, with the groups calling for the rule to exclude “matters unrelated to a tax practitioner’s ability to provide tax agent services as a fit and proper person”.
That rule also covers matters stretching as far back as July 1, 2022.
The retrospectivity “places a significantly onerous and impracticable requirement on tax practitioners,” the signatories said.
Updated rules around confidentiality provide another challenge, the letter said.
The legislative instrument includes a requirement for tax professionals to flag any false, incorrect, or misleading statements made to the Tax Practitioners Board (TPB) or the Commissioner of Taxation.
But the measure “could be considered to operate inconsistently” with other elements of legislation, and the onus for accountants to maintain client confidentiality, the letter said.
This means the chance will cause “unnecessary disruption and confusion for tax practitioners acting in their clients’ best interests,” according to the industry groups.
In general terms, the organisations are also concerned the August 1 deadline will challenge professionals already dealing with tax-time workloads.
“As a minimum, a six-month period should be allowed before the commencement of the [legislative instrument] to enable an effective implementation,” they said.
The TPB is currently consulting on draft guidance pertaining to the legislative instrument, with that information expected in the coming weeks.
For now, the joint groups fear accountants could be left in the lurch.
“It is unreasonable that tax practitioners are expected to comply with their new obligations without any available guidance from the TPB,” the letter said.
Speaking for the ICB, Addison backed reforms that will protect the sector’s professional integrity.
There is support for “where the Assistant Treasurer is going, that professional tax agents should be acting as professionals in all manners,” he said.
However, to counter “some of the devil in the detail”, the sector needs real clarity about disclosures to clients.
“Disclosing ‘all matters’ is a very broad term… The chair of the TPB, Peter de Cure is coming out clarifying some of that,” Addison said.
“But we will need some fairly detailed guidance about what we consider is relevant and not relevant.”
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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