The National Tax Clinic program was launched by the government in 2019 with the intention to provide pro-bono tax advice to disadvantaged or vulnerable taxpayers, while providing practical experience to students looking to enter the tax profession.
The pilot program saw 10 universities across Australia selected to establish a tax clinic in each state and territory, with its successful rollout prompting the government to extend the program for an additional four years in December 2019.
CPA Australia’s senior manager of tax policy, Elinor Kasapidis, said that while the profession was initially concerned around the potential for tax clinics to compete with them in the market, their fears have since been largely unfounded.
However, she believes a framework is needed to guide tax clinics in determining vulnerable taxpayers to prevent them from unintentionally disrupting the market for tax services in the future.
“The trial phase of the program allowed participants to define the criteria and who they would serve, and we’re just calling for a little bit more rigour around that,” Ms Kasapidis said.
“But we also acknowledge that the clinics do need flexibility to assess who is vulnerable. What we don’t want to see is that they start to crowd out the market for tax services.”
CPA Australia has called on the ATO — administrator of the program — to consider the Melbourne Law School Tax Clinic criteria, which stipulate that the individual should have an annual income of less than $60,000, have low financial literacy, come from a non-English-speaking background, or be involved in an ATO dispute.
The professional body, however, continues to hold reservations around small businesses approaching tax clinics for advice, noting that such services should be reserved for the profession.
“We draw attention to small businesses who often have ongoing and complex tax advice needs, and we really recommend that they engage with a professional tax agent as part of good business management,” Ms Kasapidis said.
“However, we also understand that sometimes when they are starting up, or when they find themselves in difficulty with the Tax Office with non-lodgement, then the tax clinics may have a role to play.
“But we need a framework where the profession can see the value and the benefit of the tax clinics and how they are not competing on a commercial basis with those in the profession.”
Dr Connie Vitale, who heads up the Western Sydney University tax clinic, had previously told Accountants Daily that the clinics were meant to serve unrepresented and vulnerable taxpayers who are unable to afford seeing an accountant.
“It needs to be clear that we are not trying to take work away from other accountants. This is clearly designed to provide services for unrepresented, low-income taxpayers that are individuals, sole traders or partnerships,” Dr Vitale said.
“Tax clinics are more than happy to refer on anything that falls outside of the scope of what we can deal with.”
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.