An accounting body is considering whether the fit and proper person test approach taken by legal practitioners is suitable for tax practitioners, while noting that the recommendation presents challenges.
Challenges flagged in fit and proper test recommendation
The final report of the independent review of the Tax Practitioners Board (TPB) has recommended that tax practitioners should ensure that close associates and employees have satisfied the fit and proper person requirement under the Tax Agent Services Act 2009 (TASA).
The review noted that tax practitioners can practice in a limited area of law and not be in contravention of the Legal Profession Act 2007, and as such, argued that the rules that apply to the regulation of tax practitioners “should not be less than those that apply to lawyers”.
It has recommended that guidance be taken from the Legal Profession Uniform Law in NSW and Victoria (which imposes legislative restraints on employing certain persons) to design the legislation.
Ahead of the Accountants Daily Strategy Day – which is to be held in March 2022 in Sydney and Melbourne – CPA Australia senior manager tax policy, Elinor Kasapidis told Accountants Daily that while the industry body supports efforts to ensure strong professional standards for practitioners, the recommendations could pose challenges.
“We agree that consumers should have confidence in their practitioners and those they employ,” she said.
“However, we believe the current recommendation goes further than the requirements imposed on lawyers and could pose legal and practical challenges for practitioners, their employees, and associates without necessarily dealing with the risk of unregistered or convicted advisers working in tax practices.”
CPA Australia is now considering whether the approach taken for legal practitioners under the Legal Profession Uniform Law might be suitable for tax practitioners, Ms Kasapidis added.
Push to avoid ‘onerous’ reporting obligations
CPA Australia has also expressed concerns over recommendations to change registration requirements, which would see a shift from the current three-year registration cycle to an annual requirement.
This would replace the current annual declaration process, with fees prorated in comparison to the current three-year registration rate.
“Changing to an annual registration process can create benefits by keeping information up-to-date and having a more regular payment cycle,” Ms Kasapidis said.
“Our main concern is ensuring that it doesn’t create onerous reporting obligations for practitioners.”
Ms Kasapidis emphasised that the TPB review final report did not recommend a change in fees, adding that if the annual declaration requirements are absorbed into the annual registration process, “there should be no or only limited impact”.
“That said, a review of the TPB charging arrangements is currently underway. We’re waiting on the results of this to get a better feel for the government’s views about the current fee structure,” she said.
Commenting on the potential for increased regulatory requirements to be imposed on small practices if these recommendations are implemented, Ms Kasapidis said part of CPA Australia’s function is to monitor the impact of implementing government changes to ensure that “the right balance is maintained between ensuring practitioners operate as required by law and being able to run their practices efficiently”.
“It’s really important that practitioners make sure they’re aware of proposed changes and participate in public consultations, either through their professional associations or on their own behalf,” she said.
“This is an important way that practitioners can make sure the government gets the outcome right.”
She concluded that the TPB’s Consultative Forum and the newly established Tax Practitioner Governance and Standards Forum would play a role in enabling discussions between key stakeholders and practitioners who could be impacted by the changes.
The Accountants Daily Strategy Day will provide an opportunity to hear from speakers about a range of issues including the TPB review (from board members), updates from the ATO, as well as regulatory updates.
To hear more from Elinor Kasapidis about the changing tax landscape in Australia so you can prepare your clients and gain a deeper understanding of the regulatory environment, come along to the 2022 Accountants Daily Strategy Day, to be held on 3 March in Sydney and 9 March in Melbourne.
Click here to book your tickets and make sure you don’t miss out!