‘Strap yourselves in’: accountants headed for extremely ‘busy but exciting’ period

Lennon noted that many accountants were still trying to work out how to charge for the extra compliance work associated with these changes. 

The implementation of the tranche 2 AML/CTF reforms is expected to increase operational overheads for businesses and the accountants managing them, with Lennon acknowledging the difficulty and hesitation of accountants to pass on fees to clients. 

“It’s a very big piece of legislation and it’s going to affect us in a very significant way,” she said. 

“I think there’s been a lot of discussion around whether we just put everybody through the AML onboarding and charge them that fee so that later on down the road, if a designated service arises and we have to deal with it, there’s no roadblock to put them through the AML checks.”

“But from what I’ve been looking at, I think I’m going to go the other way and only put the clients through the AML checks that we’re going to need for the designated services. Because we’re a small firm.”

Lennon expects the AML/CTF laws will actually be relatively manageable for smaller firms, labelling the situation as “a bit of a storm in a teacup”.

“I feel like [for] the average smaller firm … it won’t be as difficult to deal with.”

“I think if you’re in a bigger firm, you need to have a more strict procedure because there’s many layers of management and team members that need to make sure that they’ve had the checks and balances done before they give that advice”.

“If you haven’t worked it out yet, it’s ok.”

And much like compliance with the upcoming Payday Super legislation changes, “they’re going to give us a bit of a grace period”.

The major changes to CGT, trusts and negative gearing in the budget mean accountants are also dealing with a raft of inquiries from clients alongside preparing for AML/CTF changes and Payday Super.

Regarding the federal budget, Lennon said many changes supposedly geared towards young people, middle-income earners and small businesses wouldn't be as effective in practice.

On the 39 per cent minimum tax on capital gains, she said: “It’s not just about punishing the rich people that have trusts and try to dodge tax and do dodgy things. It’s actually coming for the mums and dad, business owners, and then it’s sort of layering on top with a 50 per cent discount.

In contrast, Lennon praised the instant-asset write off: “That actually encourages spending, it encourages businesses to purchase assets”.

“They should increase it, though”.

For accountants and advisers concerned about the impact of these various changes, Lennon called for calm.

“A lot of this stuff’s not coming in for a whole year.”

“The government has said there’ll be a grace period for like two years or three years, actually, to restructure. So you’ve got time to restructure.”

“There’s going to be an election just before some of this stuff kicks in”.

With accountants dealing with multiple policy and compliance changes all at the same time while also trying to support clients, Lennon said accountants would need to “strap themselves in”. 

“I think communication with clients is key,” she said.

”Put your prices up because costs are going up. And if we don’t put our prices up, then we’re essentially working for free, which then causes more financial pressure, more stress, that then filters down to your team and your clients”.

“Compliance is not dead. We’re going to have a lot of compliance work to do with this budget.”

“It’s going to be a wild ride, not going to lie.”