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Tax Practitioner Governance and Standards Forum - 11 August 2022

Tax Practitioner Governance and Standards Forum - 11 August 2022

Thank you for joining Ian Klug (TPB Chair), Elinor Kasapidis (Tax Practitioner Governance and Standards Forum Co-Chair), Janette Luu (Acting TPB CEO/Secretary) and Nadja Harris (Acting TPB Director of Policy and Legislation) at the Tax Practitioner Governance and Standards Forum (GSF) held on Thursday 11 August 2022. We appreciate your valuable input and have produced a summary of the key messages from the meeting, below.

Opening remarks and introductions

The Co-Chairs welcomed everyone to the GSF. The following organisations were represented:

  • Association of Accounting Technicians Australia
  • Australian Bookkeepers Association
  • Chartered Accountants Australia and New Zealand
  • Corporate Tax Association
  • CPA Australia
  • Financial Planning Association of Australia
  • Institute of Certified Bookkeepers
  • Institute of Public Accountants
  • Law Council of Australia
  • SMSF Association
  • The Tax Institute
  • The Australian Taxation Office (ATO)
  • The Professional Standards Councils and Authority, and
  • Tax Practitioners Board (TPB).

Representatives from Treasury were also present for the first 2 items of discussion relating to the Recommendations of the Review of the TPB and the Tax Agent Services Act 2009 (TASA) (James Review). 

James Review Recommendations 

The GSF noted the letter provided by external GSF members collectively to the Assistant-Treasurer, dated 5 July 2022, highlighting the importance of the James Review Recommendations, and the desire to commence consultation in relation to outstanding Recommendations as soon as possible.  

Treasury representatives thanked external members for providing the letter and noted that discussions with the Assistant-Treasurer’s office in relation of the James Review are ongoing.

Australian Business Registry Service (ABRS)

An update in relation to the ABRS was provided to the GSF from the ATO’s MBR team, as follows:

  • the first component of the Modernising Business Registers (MBR) program was the delivery of director ID
  • the MBR team is now working with Treasury and the Australian Securities and Investments Commission (ASIC) in designing the remaining components of the MBRprogram
  • one aspect of this work is the companies release, which will be a corporate register incorporating ASIC’s catalogue of registers and the associated companies ABN information that is currently on the Australian Business Register (ABR)
  • work is being undertaken to identify all the users of these registers and their roles within the environment, noting that the intent of the new platform is that there will be a single access/entry point for all users, who will have varying accesses and permissions within the system
  • scoping is being undertaken in relation to what the agent registration requirements should be for those who access ABRS online, and that myGovID will be used as the authentication mechanism for transacting on the register
  • feedback has been received in relation to the lack of rigour around the current ASIC agent framework
  • it is acknowledged that there are a number of registered tax practitioners and BAS agents who perform duties in relation to the ABR and ABNs currently
  • the MBR team will continue to work closely with the TPB and Treasury to develop a model that has the appropriate rigour but is also consistent with the deregulatory purpose of the MBRprogram
  • further consideration is underway in relation to how the onboarding framework should apply to other regulated professionals, for example insolvency and legal practitioners. 

In considering the ABRS update, the GSF noted as follows:

  • in coming up with a model, it is important that the right professionals get the right permissions within ABRS Online
  • there is a current tried and tested infrastructure under the TASA framework that could be expanded to incorporate ABRS agents, to ensure that the appropriate registration and compliance mechanisms are in place for this new category of agents
  • the new model should not require additional registration by registered tax practitioners and they should be able to use their current credentials to access the ABRS online as they have to access Online Services for Agents (OSfA)
  • the MBR team thanked the GSF for its input and confirmed that it will consult with the GSF further when a proposed model has been developed. 

TPB Education Review 

The GSF noted the briefing paper included in the GSF agenda papers and the following update by the TPB:

  • the recommendations made by the Education Working Group include the TPB having the flexibility to accept micro-credentials for the purposes of the primary qualification requirements in Schedule 2 to the TASR
  • it is expected that the Education Working Group, Subgroup and GSF will continue to have a role, particularly in relation to additional consultation regarding Recommendation 4.1 of the James Review
  • the TPB will commence the drafting of amended requirements for Board approved courses, which it will consult upon with the Consultative Forum in the first instance. 

TPB and ATO draft Engagement Plan 

A general update was provided to the GSF in relation to the draft TPB and ATO Engagement Plan, which is still under development. The TPB and ATO confirmed that the GSF will be provided with the updated draft in due course for feedback. 

Working Group updates 

The GSF noted the following updates in relation to the Charter Working Group, Relevant Experience Working Group and Sanctions Working Group. 

Charter Working Group

  • Work is currently being undertaken internally to provide proposed content within the Charter outline structure that was approved by the GSF in May 2022.
  • In addition, this work is also being undertaken in conjunction with the development of the draft TPB and ATO Engagement Plan, as the 2 documents will need to be consistent and aligned.
  • Once a preliminary draft is ready for consideration, this will be shared with Working Group members, following which a Working Group meeting will be called to discuss feedback and settle an approach to drafting going forward.
  • Once settled by the Working Group, a draft Charter will be presented to the GSF for review before public consultation is commenced.

Relevant Experience Working Group

  • A draft position paper has been prepared and settled by the Working Group.
  • This position paper will be provided to the GSF for consideration and discussion at the next meeting, before it is provided to Treasury to assist in the consultation process for Recommendation 4.3 of the James Review.

Sanctions Working Group

  • A draft position paper will be provided to the Working Group for out-of-session consideration shortly.
  • At the last Working Group meeting, members suggested the TPB have discussions with other regulators in relation to sanctions. This has now occurred and is reflected in the paper.
  • A Working Group meeting can be held to discuss the position paper further if needed, before it is presented at the next GSF meeting for endorsement.
  • Once endorsed, the position paper will be provided to Treasury to assist in the consultation process for Recommendation 6.1 of the James Review. 

ATO update

The ATO provided the GSF with the following updates. 

Operation Protego

  • The ATO confirmed that its work in relation to Operation Protego is ongoing.
  • While this is not the first time the ATO has seen GST and BAS fraud, the brazen nature of the misconduct, as well as the use of social media to promote the scheme is unprecedented.
  • The ATO provided early insights into behaviour, noting it is predominately client driven. However, there is a need for agents to have sufficient appropriate controls. While many agents have good controls, there have been some instances where an agent has not identified fraudulent claims that should have been apparent.

In response to the update provided, the GSF noted as follows:

  • there appears to be a disconnect between the ATO and TPB’s position regarding reasonable care
  • a joint ATO/TPB webinar, particularly in the context of Operation Protego behaviour would be beneficial for tax practitioners
  • there should be further consideration by the GSF at a future meeting of tax practitioner responsibilities in relation to this kind of behaviour (for example, exploring what is expected of tax practitioners in meeting the reasonable care requirements). 

The ATO and TPB agreed to consider this feedback and report back to the GSF at the next meeting. 

New integrity measures for agents linking to clients

  • The ATO is currently running a pilot in relation to client and agent linking, which involves the top 100 and 1,000 taxpayers.
  • This group was identified for the pilot as these taxpayers generally do not move between registered tax agents frequently.
  • In summary, the pilot involves the client nominating the tax agent through online services for business, after which the agent has a short period of time to link the client.
  • This new model is hoped to provide an extra layer of security and address mischief that the ATO has seen where there is inappropriate linking of individuals and businesses to agents’ client lists.
  • After phase 1, the ATO will consider feedback before consulting on the next phases. At this stage the ATO is not looking at rolling the measure out to individual taxpayers in the short term. 

PSC update 

The PSC updated the GSF in relation to roundtable discussions that the PSC is holding in the next week in relation to the impact that professional standards schemes has on the availability and affordability of professional indemnity insurance. 

The PSC invited GSF members to contact Roxane Marcelle-Shaw if they would like to attend these roundtables. The PSC was asked to circulate a report summarising the discussions and outcomes of the roundtables with the GSF in due course. 

Other business

The following items of other business were raised by GSF members:

  • the TPB and ATO were asked to consider public messaging that recognises the activities of the vast majority of tax practitioners that do the right thing
  • the TPB to work with ASIC to clarify and use consistent language regarding the operation of the Qualified Tax Relevant Provider (QTRP) framework. meaningful to financial advisers
  • further consideration and messaging about what tax practitioners’ responsibilities are when providing services that are not tax agent services (for example, advising in relation to State-based revenue laws or certain COVID-19 measures).

Concluding remarks

It was noted that a date for the next GSF will be decided and communicated to members as soon as possible, to allow sufficient time for agenda planning. 

 

Last modified: 19 September 2022