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TPB Consultative forum report - 1 November 2017

TPB Consultative forum report - 1 November 2017

On 1 November 2017, Ian Taylor (Chair), Peter de Cure (Board member) and fellow Tax Practitioners Board (TPB) colleagues held a TPB consultative forum with representatives predominately from a number of TPB recognised professional tax and BAS agent associations.

In accordance with past practice, this report provides an overview of key issues; it is not intended as minutes of the forum, nor does it represent the final views of the TPB.

Update from the TPB

Operational matters

Registrations and compliance update

  • The forum noted a summary snapshot of registrations and compliance activity and observed that current resourcing constraints are impacting on the TPB’s ability to meet operational service standards, noting that there are now almost 79,500 registered tax practitioners (representing more than 3 times the number of practitioners registered when the TPB first commenced operations in 2010).
  • As expected, there has been an increase in the number of tax (financial) adviser registration applications received, with the spike in transitional tax (financial) adviser applications received prior to the 30 June 2017 cut-off having an impact on the weighted average processing times for processing new registration applications.
  • While the TPB has now made large inroads into the transitional applications on hand, the TPB is conscious that a tranche of approximately 2,000 tax (financial) adviser renewal applications were due at the end of October and a large influx of approximately nearly 13,000 applications (in a final tranche) is due by the end of January 2018.
  • The TPB is continuing to focus on processing new applications, noting that registered tax practitioners who lodge registration renewal applications on time (at least 30 days before registration expires) will remain registered until the TPB notifies them of the outcome of their renewal application even if past the expiry of registration date.
  • The TPB also continues to look for ways to improve and streamline processes, and reallocates resources as appropriate, including progressing work on:
    • implementing ongoing improvements to online forms to provide a more streamlined and consistent user experience;
    • the qualifications advice service, with final testing currently underway before expected delivery by the end of the year;
    • changes to the Contact Us page (including new online contact forms) to facilitate resolution of most enquiries online, with final testing in progress before delivering this service by the end of the year; and
    • improving search and display functionality of current information on the TPB Public Register.
  • The number of complaints and referrals for the September 2017 quarter was slightly higher than in the same period the previous year (425 compared to 411); however, there continues to be a very small proportion of registered practitioners on which sanctions are applied, while awareness of the TPB continues to increase. Further, there continues to be a small number of requests for internal reviews of complaints.
  • The Board is taking a graduated compliance approach to appropriately address the small number of instances where there is recurring late lodgement of annual declarations.

Communications activities

The TPB has continued to increase its communication and awareness activity, including continuing to raise awareness of registration requirements. The broad-based approach to Outreach involves a rolling schedule of webinars, speaking engagements, eNews and social media, media releases, and involvement in ATO Open Forums as appropriate. The TPB continues to welcome any opportunities to speak at national and state conferences of associations.

Legislative instrument for tax (financial) advisers

The TPB will progress work on preparing a draft instrument and a draft explanatory statement for consultation, having regard to previous Consultative Forum and Financial Adviser Forum feedback, with specific feedback expected to be sought at the next Forum meetings before issuing for wider consultation and feedback.

Regulator Performance Framework

  • The Forum considered a 2016-17 self-assessment report providing an overall summary on the TPB’s performance against the six outcomes-based Regulator Performance Framework (RPF) key performance indicators (KPI) metrics, to provide feedback and validation of the report (including whether the assessment and conclusions are reasonable and objective).
  • It was noted that the draft 2016-17 self-assessment metrics report was considered at the last forum, and that information and evidence to support the metrics is contained in the TPB’s 2016-17 Annual Report and the associated Annual Performance Statement.
  • It was noted that the TPB is on track to show continuous improvement in enhancing the regulatory environment, including through a continuing drive to be consultative and interactive with key stakeholders and registered practitioners. It was also observed that the proposed final report notes that there has been a small decrease in service standards, with this occurring within the context of a large increase in the volume of work.
  • No issues were raised, and it was noted that the final report would be provided to the relevant Minister for information and subsequently published to the TPB website.

Policy matters

Professional associations – annual declaration process and governance related arrangements

  • It was noted that the TPB released the high-level principles-based Exposure Draft Information Sheet on 3 October, to provide guidance to professional associations in relation to the TPB’s interpretation and application of the requirements for recognition of recognised professional associations (under the Tax Agent Services Regulations 2009) that relate to corporate governance, operational procedures and accountability.
  • It was confirmed that submissions close on 17 November and that the TPB will consider all submissions received prior to finalising the document. It was also noted that this guidance will be a reference point when considering future rounds of annual declaration responses from recognised professional associations.

Outsourcing, offshoring and the Code of Professional Conduct

  • The Forum noted that comments closed on 12 October for the Exposure Draft Practice Note on outsourcing, offshoring and the Code of Professional Conduct.
  • It was confirmed that the TPB received several submissions which contained a range of views, with these submissions currently being considered before determining next steps.


The TPB continues to work with the ATO and Treasury regarding foreign resident capital gains withholding, with the ATO reviewing forms to ensure that completion does not constitute a tax agent service. In particular, it was noted that the Purchaser Payment notification form has now been amended to remove the questions that would meet the definition of a tax agent service and that there would no longer be a need for the ‘carve out’ beyond 31 December 2017.

Exemption from providing financial product advice

The forum noted that the TPB has worked with and provided guiding principles to the Australian Securities and Investments Commission (ASIC) in relation to the operation of section 766B(5) of the Corporations Act (the exemption that advice given by a registered tax agent or BAS agent, within the meaning of the Tax Agent Services Act 2009, in the ordinary course of activities as an agent and that is reasonably regarded as a necessary part of those activities).  The TPB has provided input to ASIC on this point.

BAS agent educational qualifications review by PwC (Skills Australia)

  • The Forum noted that the TPB has been part of a PwC Skills Australia Working Group which has been reviewing competency units where content is outdated or not fit for industry standards. It was also observed that PwC Skills Australia has recently released draft training products for final consultation. The next step is to develop a Case of Endorsement for changes to the Financial Services Training Package, which is to be provided to the Financial Services Industry Reference Committee for approval and submitted to the Australian Industry and Skills Committee.
  • Key recommendations regarding the bookkeeping and accounting training products include:
    • developing a single new qualification to supersede the Certificate IV in Bookkeeping and Certificate IV in Accounting;
    • introducing an entry requirement (prerequisite) for both the Diploma of Accounting and Advanced Diploma of Accounting
    • reviewing units of competency to reduce duplication
    • updating the GST/BAS course skill set for currency.
  • Key recommendations regarding the payroll training products include:
    • developing a Diploma of Payroll Services
    • supplementing the qualification with a payroll skill set, comprising 6 units (5 of which are brand new and relate specifically to payroll);
    • adding the payroll skills to the elective units list for the Diploma of Accounting and Certificate IV in Accounting and Bookkeeping.
  • The TPB has had discussions with PwC Skills Australia around the suitability of the Diploma of Payroll Services as meeting the requirements for “at least a Certificate IV in bookkeeping or accounting” which is part of the educational qualification requirement for registration as a BAS agent.

Black Economy Taskforce

It was confirmed that the TPB made a submission and provided further input in relation to the Black Economy Taskforce interim report and consultation paper outlining additional policy ideas. The Forum noted that it is important to ensure appropriate resourcing to achieve results, including in relation to handling appropriate referrals from the ATO. It was also observed that a final Taskforce report was scheduled to be released to government at the end of October.

Inspector-General of Taxation review of the Future of the Tax Profession

It was confirmed that the TPB had also made a submission in relation to this review, which is forward-looking and seeks to raise awareness about the risks, challenges and opportunities affecting tax practitioners due to technological, social, policy and regulatory change. The Inspector-General of Taxation’s office has recently noted that they will update the TPB and other stakeholders on the review, including the direction they are likely to take particularly in respect of the discussion on regulatory matters.

Cyber security

  • The TPB will continue to raise awareness of this emerging risk and monitor developments, including in webinars and other avenues as appropriate (including Open Forum discussions).
  • The TPB will be running a specific Webinar in December about protecting practices from cyber-attacks, with early registration encouraged.
  • The TPB recognises the emerging threat of cyber-attacks and the importance of tax practitioners proactively protecting themselves, their practice and their clients. It was noted that the July previous eNews edition referred to:
  • The Explanatory Paper on PI insurance incorporates an appropriate reference to first and third-party coverage, and include a recommendation that tax practitioners assess their cyber risk and consider taking steps to ensure that there is appropriate coverage in the context of first party costs (either as an add-on / extension or as a standalone policy).
  • While not mandating requirements, the TPB’s approach to PI insurance will be reviewed in 12 months’ time, recognising that the market will mature and that any changes to requirements that may arise from future reviews will require appropriate lead-in time.

Notifiable Data Breach Regime

  • It was noted that the mandatory data breach notification scheme, which applies to entities that are regulated by the Privacy Act (including tax file number (TFN) recipients to the extent that TFN information is involved in a data breach) will commence on 22 February 2018. An eligible data beach refers to unauthorised access, loss or disclosure of ‘personal information’ held by a relevant entity that a ‘reasonable person’ would conclude would be likely to result in serious harm to any of the individuals to whom the personal information relates.
  • The Office of the Australian Information Commissioner (OAIC) has relevant jurisdiction of the Privacy Act and will provide guidance about the scheme, noting that a tranche of draft guidance materials has already been released to provide greater clarity as to the OAIC’s expectations. The OAIC has recommended that affected entities review practices, procedures and systems for securing personal information; and to prepare or update data breach response plans.
  • It was also observed that most registered practitioners are already required to comply with the Privacy (Tax File Number) Rule 2015 (which requires TFN recipients to protect TFN information from misuse and loss, and from unauthorised access, use, modification or disclosure) and the Taxation Administration Act 1953 (which contains offence provisions relating to use and disclosure of TFNs).
  • The TPB will continue to monitor developments and raise awareness in relevant communications, including in conjunction with being a member of the Cyber-Security stakeholder group (chaired by the ATO and Chartered Accountants Australia and New Zealand) and a relevant reference in December’s general eNews edition. Ultimately, determining if a registered agent has complied with their obligations requires each situation to be considered on a case-by-case basis.

Whole of practice transfers

  • It was reiterated that a relevant message was included in the July eNews edition, with the TPB noting that:
    • if a practitioner is planning to sell their practice and transfer clients to a new owner, they must obtain positive consent from their clients to disclose their information to the new owner;
    • the Code states that unless you have a legal obligation to do so, you must not disclose information relating to a client’s affairs to a third party unless you have obtained their permission.
  • Relevant webinars have been updated with additional example material as appropriate.

Next meeting

The Chair thanked forum members for their attendance and continuing feedback. The next meeting is scheduled to be held in March 2018 (date to be confirmed but tentatively scheduled for 13 March).

Last modified: 5 December 2017