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The Tax Practitioners Board has been told to slow its plans down to expand the remit of tax financial advisers.
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TPB called to rethink expansion of tax financial adviser services
12 November 2020
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10 minute read
The regulator had earlier issued a draft legislative instrument proposing to expand tax (financial) advice services, including allowing such advisers to apply for tax file numbers, represent an entity in their dealings with the Commissioner of Taxation and the ATO, and apply for an ABN in the establishment of an SMSF.
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A joint submission by Chartered Accountants Australia New Zealand, CPA Australia, the Institute of Public Accountants, the Financial Planners Association, and the SMSF Association has now put a damper on the TPB’s plans, urging for further discussions before the proposal is finalised.
While recognising that clients often rely on tax (financial) advisers to manage the administration and compliance of their financial affairs, the joint bodies note that such advisers have not been able to interact with the ATO to date and that the plans would mark a significant shift from the status quo.
The TPB has been told that representing clients in relation to tax reviews, audits, disputes and objections should remain in the realm of tax agents because of the legislative complexity and administrative knowledge required to deal with such issues.
Instead, the joint bodies believe tax (financial) advisers should only have read-only access to a client’s ATO superannuation accounts via Online Services for Agents.
“We are therefore supportive of the elements of the draft LI that enable tax (financial) advisers to access ATO held information about a client’s superannuation affairs, to the extent that this information assists the tax (financial) adviser to provide customised advice or explain an ATO-issued notice to a client,” said the joint submission.
The joint bodies also believe further discussion is required regarding the proposal to allow tax (financial) advisers to apply for an ABN, with two opposing views being presented to the TPB.
The first argues that information required to determine the rights and obligations of ABN holders, and to determine whether the fund should be registered for GST, goes beyond what would normally be collected for the provision of licensed financial advice.
The other view notes that because an ABN registration is compulsory for an SMSF, it is an integral part of the financial advice service an SMSF adviser offers. It also argues that the vast majority of SMSFs do not need to register for GST.
The joint bodies also believe that any move to expand the range of tax (financial) advice services may require amendments to the education and experience requirements.
“The legislative instrument should strike the right balance between workability and equity for all categories of registered practitioners, consumer needs, cost-efficiency, adviser competency and the integrity of the tax and superannuation system,” said the joint submission.
“It is our view that the draft LI should be refined to include only a more targeted set of services that have clear consumer and efficiency benefits (i.e. access to ATO-held information) and that the scope of ‘representing an entity’ be more appropriately defined.”
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