Concern, confusion skyrocket among accountants post-budget

The AuditCover Practitioner Survey, titled ‘The Budget Reality Check’, surveyed 99 accounting practitioners between 10 and 29 June 2026 on what they expect the 2026 federal budget reforms could mean for their clients as well as their practices.

The survey asked practitioners about the capital gains tax (CGT) and negative gearing changes and discretionary trusts (which have not been legislated yet).

Huge impacts expected on clients

Alongside holding significant concerns about the impact of these changes on their clients, 56 per cent of the respondents said more than half of their clients will be materially affected by at least one reform.

Indeed, 86 per cent of those surveyed said they expect at least a quarter of their clients to be materially affected by the reforms, while only 3 per cent said under 10 per cent of their clients will feel the impacts.

When asked how much additional compliance work they expect to land on their plates as a result of these reforms, not one respondent selected the no-increase option. Instead, nine in 10 respondents said they expect a double-digit lift in work. While 56 per cent of the accountants said they expect over 20 per cent more work, almost a third said they expect their work to increase by 10–20 per cent.

AuditCover CEO Gil Snir said that while he was unsurprised that accountants are concerned, the responses were starker than he expected.

“When tax legislation becomes more complex, it becomes more exposed to errors and mistakes,” he told Accountants Daily.

“But also inevitably, the compliance workload increases, and it requires educating clients on that rising compliance workload. Those findings were pretty significant.”

The CGT changes were at the top of the list of reforms expected to create the most work for practices, with 92 per cent selecting this option. Discretionary trust reforms were not far behind with 85 per cent selecting this, while three-quarters of the respondents selected negative gearing changes.

Some accounting practices provided comments on what client concerns they are hearing the most. One noted that the noise around the reforms is doing significant damage despite the fact that their clients currently do not need to act on anything yet.

Another respondent said clients are concerned about how to deal with changes to structures that have been in place for decades while complying with all the Tax Office requirements and guidance for many years. A third respondent said clients are anxious about the lack of clear ATO guidance and are seeking answers they cannot provide yet.

Questions raised on who carries the cost of rising ATO activity

Respondents were also asked if they believe these reforms will increase the likelihood of ATO reviews, audits, or inquiries. An overwhelming 88 per cent said this was more likely, while almost half (46 per cent) said it is much more likely. Only 3 per cent said ATO activity would fall.

Snir underscored that there is a strong correlation between growing tax complexity and audit activity as the likelihood of errors from the client and practitioner side increases in relation to substantiating any claims or lodgements.

“Inevitably if you’ve got a tax environment that’s becoming more complex, things are going to get missed. The ATO is going to pick up anomalies, and that’s what’s going to trigger a review or an audit,” Snir said.

“Certainly, from this survey, the sentiment is that there’s a perceived risk that these are going to increase and quite substantially.”

This prompted questions around what typically happens to the professional fees incurred (a question that was asked for the first time in this survey). More than three-quarters (77 per cent) stated that they give up some audit-related fee revenue. Within that, 31 per cent either discount frequently or absorb the fee entirely, while less than a quarter recover their fees in full, the survey found.

Almost half (45 per cent) said the client pays most of the fees, while the accountant offers partial discounts.

Snir said accountants may choose to fully or partially absorb these fees because the audit work could be considered as “out of scope” work.

“Because it’s out of scope, and to avoid disrupting the client relationship and impacting the tenure with that client, they’ll feel it necessary to discount and ultimately, they shouldn’t. These are costs that they incur, but it’s a choice that they make to perhaps soften the blow,” he said.

Snir urged practitioners to monitor whether the reforms have been legislated and avoid providing advice until they have become law.

“Know who in your book of clients is more affected. Once these changes come into effect, await the guidance and commentary from industry bodies. They will be working closely with the practitioners on enacting these changes,” he said.