Speaking to Accountants Daily, CPA general manager of external policy Paul Drum said public practitioners now face a number of costs to running a practice, with ASIC’s industry funding affecting auditors, Australian financial services licensees, and registered liquidators.
Fees for SMSF auditor registration have risen from $107 to $1,927, while applications to cancel an SMSF auditor registration costs $899.
AFSL licensees that provide general advice only will have to fork out $592 as a flat levy to the corporate regulator.
Registered liquidators will see a minimum levy of $2,500 plus $77 per appointment and notifiable event.
Tax and BAS agents have also seen a fee hike this financial year, with tax agent registration rising to $675, with tax (financial) advisers paying $540, and $135 for BAS agents.
Mr Drum believes the accumulative costs will lead to market concentration and reduced competition, reflected by ASIC’s latest licensing and registration assessment, which showed a decline in applications across the board.
“Many tax practitioners undertake other regulated roles such as SMSF auditors and/or provide financial advisory services, and they are already facing very large increases in regulatory charges from multiple sources. It is essential that this cumulative impact of higher regulatory charges on professional accountants offering services beyond tax services be considered,” said Mr Drum.
“Further, as many practitioners are holders of other licences and registrations, a focus on looking to harmonise legislative frameworks and obligations – to avoid duplication in compliance costs and obligations should also be considered. The government needs to consider how competing legislative frameworks can be harmonised.”
The TPB review, announced by the government last week, should the impact of increasing regulatory costs and compliance burdens, says Mr Drum.
Fund the regulator
Mr Drum has also called for the government to increase its funding for the TPB, noting that the regulator can only weed out “agents of concern” and level the playing field if it has the appropriate resources.
“The ATO is undertaking several large projects, such as its tax agent visitation program, to improve the integrity of some tax practitioners. It is very likely that these projects will lead to an increase in the number of tax practitioners being referred to the TPB by the ATO,” he said.
“Therefore, it is important that the TPB receives appropriate funding to carry out this expected increase in work flow.”
The Institute of Public Accountants general manager of technical policy Tony Greco has also called for the TPB to be better funded, noting how the board has been “screaming for resources” in recent times.
While it was given a $20 million funding boost this year, it was fully paid for by an increase in practitioner registration fees.
Mr Drum is adamant that any additional funding should come straight from the government.
“Given that a well-functioning and regulated profession is critical to the tax system and is therefore of benefit to the broader community, such an increase in funding should primarily come direct from the public purse,” he said.
“The primary function of the TPB is to regulate tax practitioners to protect consumers – it is therefore consumers that primarily benefit from the work of the TPB; and so, it is inappropriate for tax practitioners to be the main source of funding for the TPB.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.