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TPB Consultative Forum Report 20 May 2014

Tax Practitioners Board Consultative forum report – 20 May 2014

On 20 May 2014, the Tax Practitioners Board (TPB) held a Consultative Forum (forum) in Melbourne with representatives from a number of professional associations. This was the second forum held in 2014.

Board and TPB representation at the forum consisted of:

  • Ian R Taylor – Chair of the Board
  • Caroline Clarke – Board member
  • Russell Smith – Board member
  • Rosemary Holloway – Secretary
  • Janette Luu – Senior Adviser to the Chair of the Board
  • Neil Pegg – Secretariat.

Representation at this forum consisted of:

  • Australian Institute of Quantity Surveyors
  • Australian Securities and Investments Commission (ASIC)
  • Australian Taxation Office (ATO)
  • Association of Accounting Technicians Australia
  • Association of Taxation and Management Accountants
  • Australian and New Zealand Association of Chartered Certified Accountants
  • Australian Bookkeepers Association Ltd
  • CPA Australia
  • Institute of Certified Bookkeepers
  • Institute of Chartered Accountants in Australia
  • Institute of Public Accountants
  • Law Council of Australia
  • Law Society of New South Wales
  • National Tax Agents' Association Ltd (NTAA+)
  • Self-Managed Super Fund Professionals’ Association of Australia
  • Taxpayers Australia Inc. Tax Practitioners & Advisers Ltd (TAI PAL)
  • The Tax Institute.

Apologies were noted from the Association of Accounting Technicians Australia, Financial Planning Association of Australia, the New Zealand Institute of Chartered Accountants, and the Royal Institute of Chartered Surveyors.

This draft report summarises the key points discussed at the forum. In accordance with past practice, it is intended only to provide an overview of the issues that were discussed and does not represent the final views of the Board, nor is it intended as minutes of the forum.

Update from the TPB

Registrations

  • The TPB continues to meet service standards, as outlined in the TPB’s Strategic plan, in relation to Registrations processing results. As at the end of March 2014, the current year-to-date overall weighted average for processing registration applications is approximately 21 days.
  • The TPB’s ability to sustain these service standards may be impacted by budgetary constraints and increased workload. However, the TPB will continue to identify opportunities that enable streamlined processing and improve end-user experience with the registration process, including form design and reviewing instructions.
  • It was highlighted that it is important that registered agents contact the TPB in a timely manner, including when lodging renewal applications (which must be submitted at least 30 days before the registration expiry date) and restructuring practices, and for complete information to be provided with applications (particularly in relation to qualifications).

Compliance

  • In conjunction with maturity of the TPB’s proactive work program, there has been a slight decrease in the number of complaints and referrals in comparison to the previous year.
  • As at 31 March 2014 there were 474 cases on hand, of which 216 were sourced from the TPB’s projects in relation to:
    • compliance with personal tax obligations (subsection 30-10(2) of the TASA)
    • having appropriate professional indemnity (PI) insurance cover (subsection 30-10(13) of the TASA).
  • There has been a total of 222 sanctions applied year-to-date as at 31 March 2014 (noting that an agent may have two or more sanctions imposed in particular cases), demonstrating generally good compliance with the TASA when having regard to the total population of registered agents.
  • Complaints from the public continue to represent a major source of complaints (almost 40% of the total number of complaints and referrals), with many finalised without requiring further action by the TPB (determining that there has been no breach of the TASA). The main issues raised concern acting in the best interest of the client and competency of services (subsections 30-10(4) and 30-10(7) of the TASA), with the TPB keen to see these figures reduce.

Communication activities

  • The forum noted the listing of recently issued TPB information products including, among other things:
    • the TPB Tax Practitioner Service Charter (published in February), giving definition to expectations in relation to the interaction between the TPB and registered tax practitioners
    • TPB eNews, distributed in late February and on 8 May 2014, with open rates for this newsletter still well above the industry average
    • an Exposure draft information sheet in relation to Code of Professional Conduct – confidentiality of client information (released in March)
    • recent website material in relation to the Brisbane Outreach sessions being held on 10 – 12 June 2014 as part of the TPB’s continued activities to proactively engage with registered agents and comment on topical issues, with the TPB overwhelmed with interest received from tax practitioners wishing to attend.
  • It was also noted that the most recent Outreach events held in Canberra in March 2014 were a success, with a significant number of registered agents in Canberra (and surrounds) attending and the TPB receiving favourable feedback.

Regulation of tax (financial) advisers

  • The TPB has been focused on relevant preparations to ensure readiness from 1 July 2014, including continued consultation with relevant stakeholders.
  • Numerous submissions were received on TPB’s three exposure draft (ED) policy papers concerning professional indemnity (PI) insurance, continuing professional education (CPE), and what is a tax (financial) advice service.
  • A number of changes have been made to the EDs on PI insurance and CPE, however these are not substantive and it is anticipated that the documents will be released in final format in the near future. Further, the TPB is intending to issue a joint press release with the Insurance Council of Australia to highlight it is not envisaged that the TPB's PI insurance requirements will have a significant impact on insurance premiums.
  • In relation to the ED on what is a tax (financial) advice service, the TPB is continuing to work through the numerous submissions.
  • The TPB also intends to develop documents in relation to the sufficient number requirement, disclaimer requirements, and what is a fee or other reward.
  • Significant operational work is also being undertaken, including development of further videos (on when and how to notify), form design, planned release of a second letter to Australian financial services (AFS) licensees in June to explain how to notify (including on behalf of authorised representatives), and development of a separate communication in relation to those financial advisers who are already registered as tax agents.

Deregulation

In addition to streamlining online information where possible, the Board is currently considering other various options to reduce the time needed for registered tax practitioners to interact with the TPB, where appropriate, for the purpose of assisting the Australian Government in meeting its objective to cut $1 billion in red tape costs every year.

Professional practice issues

  • It was noted that an issue which has captured the Board’s attention is the use of powers of attorney, embedded loan agreements and online tax returns. The TPB is seeking to issue a relevant message and is also working with the Australian Taxation Office to provide a collective response in relation to this complicated issue.
  • The TPB’s work program has also been updated to note that the Board plans to provide further guidance in relation to what constitutes satisfactory supervision arrangements, with this question to be considered when providing guidance on the sufficient number requirement for tax (financial) advisers.

Next meeting

The next forum will be held on 12 August in Sydney (venue to be determined) and the subsequent forum is currently proposed to be held on 25 November in Melbourne.

Last modified: 24 February 2015