Accountants are drowning in tax reform, the profession is not winning

Alexander told Accountants Daily that small-business accountants must monitor the changes and prepare for the increased consultation moving forward.

“For accountants, as small businesses, they’re going to be subject to a range of these changes themselves, so they’ll have to think about how their business is going to work in this new world,” Alexander said.

In reality, accountants are reporting workload strain and mental burden, in the backdrop of an increase in complex tax changes to understand and explain to clients.

“While some may view tax reform as a win for accountants because it creates demand for professional advice, more work does not necessarily mean greater profitability,” Tax Invest Accounting director and accountant Belinda Raso told the brand.

“In reality, it can mean longer hours, increased pressure on teams and a greater responsibility to support clients through uncertainty, often without appropriate recognition or remuneration for the additional work involved.”

Many other accountants are saying the same thing and are also experiencing a lot more work to deal with, and very little time.

“It’s the sheer stack of change landing on one profession at the same time: Payday Super, the AML/CTF regime, the CGT discount, negative gearing, the 30 per cent minimum tax on trusts,” another accountant and Box Advisory Services founder, Davie Mach, also told the brand.

“I’ve been an accountant for more than 18 years, and I’ve never seen this volume of change at once. Five months on from the budget, the detail is still shifting. You can’t build a reliable process, or give confident advice, on rules that might be different next month. It isn’t a windfall. It’s complex, stressful and, frankly, suffocating.

“And it’s happening while the profession is already short of people. Not enough graduates want to become accountants, and experienced practitioners are retiring. There are simply too many changes for one industry to absorb at once.”

Also speaking with Accountants Daily, Lee-Ann Hayes, head of education at Accurium and TaxBanter, said that accountants are really going through it at the moment.

“I think that clients think their accountants know everything and know it instantly,” Hayes said. 

“Knowing it all is actually impossible, and so explaining that to the clients [is hard] when they just expect you to know it all.

“I think that accountants don’t feel like they’re winning, because they don’t want their clients just to be paying for stuff just because of a tax reform.”

Tax reform good for business?

“You do get pockets of accountants that say this is great for business, but most don’t actually buy into that. Most of them are just really quite concerned about making sure they’re doing the right thing for their clients, because there is just so much,” Hayes said.

She said that there is too much legislation and draft rulings to think about to properly review for all clients.

“I think initially everyone’s concerned, all business clients, all trust clients, they’re concerned about what this means for them, so they’re picking up the phone, they’re talking to their accountant, they’re emailing their accountant saying, ‘Hey, what does this mean for me.’ Is that time that we can just bill? For some, maybe we can, but when every client is asking you, ‘How does this impact me?’, how do we find the time to give that [advice] to every client?” Hayes said.

Hayes recalled speaking to an accountant who said they simply do not have time to do this work.

“He says he actually can’t do the work for every single client on restructuring or working out whether even to restructure, to make an election; he simply just doesn’t have the time with the number of trusts he’s got in his client base,” Hayes said. 

“So where do they find the time? And that on top of all the other work that they’ve got to do in ‘business as usual’.”

A profession up in arms

Other accountants agree with Hayes that the narrative that accountants are winning from the tax changes is a common misunderstanding.

“You can’t justify charging clients for advice on proposed legislation that continues to evolve and is not yet law,” accountant and founder of Make Accounting Great Again, Joe Kaleb, told the brand.

“As accountants and tax advisers, we already had enough on our plate before the budget tax changes. These reforms add another layer of complexity, uncertainty, and pressure to an already demanding workload.”

“At the end of the day something has to give, which could lead to more practitioners heading for the exits at a rapid pace.”

Accountants are facing all of this added burden, which is making the environment for practitioners really difficult to operate in, they said.

“The accounting profession is facing an incredibly challenging time, and I would liken the current environment to what we experienced during COVID,” Raso said.

“When major tax changes are announced, clients naturally turn to their accountants for clarity, reassurance and direction. Much of this support happens through phone calls, emails and informal conversations, often without any additional fee or immediate financial benefit to the accountant.”

Self education

Raso said that all the while, accountants need to study and understand the legislation, which cannot be billed.

“This requires considerable time and effort to interpret legislation, undertake professional development, review guidance and understand how the changes will affect different taxpayers. Much of this work is not directly billable, yet it is essential to ensuring clients receive accurate and reliable advice,” Raso said.

This cost is not often talked about, and can hide beneath all the other work that accountants are facing.

“Where the additional unbillable work arises is in the investment made in learning and development. We spend about two to three hours a week training up the team on the changes. That is the hidden cost, as it’s time away from helping our clients,” another accountant, James Scott, told the brand.

“The accounting profession is used to change, I started just prior to the introduction of the GST, and it’s been change ever since. But these recent reforms fundamentally alter key principles of taxation in Australia, some of which have been in place for over 100 years. Lots of learning needs to occur.”

“It also adds additional risk for accountants. We’re being asked for our opinion and to guide clients on new rules that have limited or no precedent. So despite best endeavours, advice might inadvertently be wrong or a mistake made, causing additional stress.”

Clients need accountants the most

Following this statement, Accountants Daily reached out to the shadow assistant treasurer for further comment, where he acknowledged accountants’ roles at the front line of the tax system.

“The government should be consulting them before it acts, not leaving them to clean up afterwards,” shadow assistant treasurer Hogan told Accountants Daily.

“Accountants are busy, but they’re also doing it tough … There’s too much uncertainty because the government has failed to properly consult the industry.

“While there is a lot of work, accountants tell me it’s more stressful than usual. Too often the honest answer to their clients is ‘we don’t know’ – because this whole process has been a rushed mess.”

Work is bursting at the seams for the profession at the moment, and the shadow assistant treasurer stressed that there needs to be more time for consultation.

“Canberra needs to spend more time listening to the experts [who] know how the system works,” Hogan said.

Despite these burdens, accountants still have hope for the profession.

“Continue to support one another, invest in your knowledge and expertise, and be confident in communicating the value of your advice,” Raso said.

Hayes said: “Say to your clients, I absolutely am on your side, but this is actually hard, and I’m going to have to work through [all the changes].”

Raso concluded that “accountants are not simply responding to changes in the tax system; they are helping Australians navigate them. That is something the profession should be incredibly proud of.”

Accountants Daily reached out to Treasury and ACCI for comment.