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TPB Consultative Forum Report 23 June 2011

Report Tax Practitioners Board Consultative Forum – 23 June 2011

On 23 June 2011, the Tax Practitioners Board (Board) held its seventh Consultative Forum (Forum), at the Board’s Canberra premises with representatives from a number of professional associations.

  • Dale Boucher – Chair of the Board
  • Russell Smith – Board member
  • Mark Maskell – Secretary
  • Janette Luu – Senior Adviser to the Chair

Professional representation at the Forum consisted of:

  • Association of Taxation and Management Accountants
  • Australian Institute of Quantity Surveyors
  • CPA Australia
  • Institute of Certified Bookkeepers
  • Institute of Chartered Accountants in Australia
  • Law Council of Australia
  • National Institute of Accountants
  • Royal Institute of Quantity Surveyors
  • Self-Managed Super Fund Professionals Association
  • Tax Institute of Australia

The following Board members and professional associations sent their apologies:

  • Professor Gordon Cooper – Board member
  • Professor Cynthia Coleman – Board member
  • Australian and New Zealand Association of Chartered Certified Accountants
  • Australian Taxation Office
  • Chartered Institute of Management Accountants
  • Taxpayers Australia

This draft Report outlines the key points that were discussed at the Forum. This draft Report is only intended to provide an overview of the issues that were discussed. They do not represent the final views of the Board and are not intended as detailed minutes of the Forum meeting.

1. Update from the Chair

The Chair welcomed all attendees and provided the Forum with a brief overview of the key updates since the Forum meeting on 31 March 2011. In particular the Chair noted the following:

  • The work that had been undertaken to further articulate the Board’s approach to education requirements for tax and BAS agents. Further details are contained in a later section of this report.
  • The Board issued a letter, on 29 April 2011 to all registered agents that from 1 July 2011, requiring them to maintain professional indemnity insurance (PII). Further details are contained in a later section of this report.
  • The Board is looking to develop a committee to act as a clearing house and priority setter in relation to professional practice matters. The Board will be seeking assistance from Forum members to bring any issues that they think needs to be addressed to the Board’s attention. The topics that are currently under consideration include managing conflicts of interest, the taking of reasonable care and reasonable steps, out sourcing/off shoring and the management of personal tax obligations. A number of Forum members expressed their concern that was a lack of understanding of reasonable care by tax practitioners and that it would be useful for the Board to provide further guidance in this area.  In addition guidance on the meaning of relevant experience would be of assistance. The Chair noted both of these suggestions.
  • The Board has been undertaking a number of activities to communicate the tax agent services regime to the tax practitioner community. These activities have included a number of speaking engagements, procuring a webinar capability and participating in the ATO’s nation BAS agent road shows in August and September.
  • The Chair gave a brief update of the work that the Board are undertaking in relation to regulation of financial planners who provide tax advice. In particular, the Chair noted the following:
    • Board are continuing to work with Government and Treasury on the regulation of financial planners who provide tax advice (Category 2)
    • Financial planning tax advice continues to be carved out, with a Regulation recently being made to extend this carve out until 30 June 2012.
    • The Board will continue to progress working on the financial planner competencies

A Forum member asked for further details about how a Category 2 financial planner would demonstrate relevant experience. The Chair advised that without any legislative direction, he would be unable, at this time, to advise further. However, he did note that a new definition of relevant experience may need to be developed.

  • The Board is close to finalising its Strategic Plan for 2011-2013 – the Plan articulates that the Board’s overarching aim is to bring all registered tax practitioners together under an effective regulatory framework for the benefit of the Australian community. The Strategic Plan details the Board’s plans for achieving this, outlines the key business priorities we should be focusing on and the principles that should guide our behaviour. These have been distilled into seven values which are:
    • Independent, fair, consistent, and practical in our endeavours
    • Collegiate in our approach to our work with our stakeholders
    • Accountable and open in all of our actions with key stakeholders
    • Accurate in our work
    • Practical in the way in which we deliver our services
    • Agile in our decision making
    • Prompt and responsive in all of our work

2. Update from the Secretary

The Secretary advised the Forum that the Board is making good process on processing registration applications and renewals. As at the date of the Forum there are approximately only 600 new tax agent applications and 400 new BAS agent applications on hand. There are approximately 2,000 tax and BAS agent renewal applications currently being processed.

The Secretary also provided the following updates:

  • Since the Board commenced operations on 1 March 2010, the Board have received approximately 2,400 complaints. Of these, there are about 360 applications on hand – 170 are low risk, 180 are medium risk and 10 are high risk.
  • As a result of the letter sent to all agents notifying them of the Board’s PII requirements, the Board’s website crashed for a short period of time. As a result of the PII letter activity on the website during May generated the second highest level of total visits, with nearly 55,000 recorded visits. This was an increase of over 100% form the preceding month. Call volumes also significant rose, with approximately 260 calls received per day. This was an increase of approximately 100 calls per day.
  • During the month of May, the Board published a number of key publications on their website. This included the online PII notification form, information on what the relevant experience requirements for BAS agents, BAS agent education requirements.

A Forum member asked the Secretary about the registration process and time taken to process an application. The Secretary noted that the Board are seeking to achieve a 1 month turnaround time to process all complete applications (that is, where all the information has been provided). However, currently, the Board are processing applications in 2 to 3 months. This is largely due to insufficient information and evidence being supplied by the applicant. The Forum suggested that it would be useful for the Board to communicate the applicant process and why applicants may be experiencing delays.

3. Update on education requirements for tax and BAS agents

The Chair provided an update on the progress the Board had made in respect of educational requirements for tax and BAS agents. Key updates included:

  • The Board had issued a number of key information sheets, these included:
    • TPB(I)) 04-2011: BAS agent educational qualification requirements
    • TPB(I)) 05-2011: Information regarding the assessment aspect and requirements of an approved course in basic GST/BAS taxation principles
    • Educational qualification requirements for tax agents and BAS agents – the mix and match approach to Board approved courses
    • Approval process for courses which are referred to in Schedule 2 of the Tax Agent Services Regulations 2009
  • The Board has created a qualifications advice service. This service has been articulated in the Board’s mix and match information sheet. This service is for applicants who have not completed a course, but they are seriously contemplating undertaking a particular course of study.  This service is not meant to be an application pre-approval process; rather it is to provide applicants with assistance where they are already studying, are concerned that their qualifications may fall short of those required by the Board and want to know whether to study one subject or another.

    To use this service, applicants must email details of the courses they have completed, those they are studying and those they are proposing to study.  Applicants need to include copies of academic transcripts, certificates, course outlines and any information or results from continuing professional education courses they have undertaken through a registered training organisation or professional association.  Provided all necessary information is submitted, the applicant should expect to hear back from the Board within three months. However, this is not considered part of a formal registration application.
  • The Board have finalised its requirements in relation to course providers. The Chair noted that the Board have already received submissions from organisations seeking approval and aim to assess these as quickly as possible. The Board are also in the process of compiling a list of Board approved course providers
  • The Board have published a number of submission templates for course providers seeking approval of Board approved tax agent courses (commercial law, Australian taxation law and basic accountancy principles).

4. Tax and BAS agent renewal strategy

The Board is currently developing a BAS agent renewal strategy to deal with the 16,000 BAS agent notifiers who may seek to renew their registration in February 2012. This approach will assist to avoid potential backlogs and delays in processing applications and to give those early renewing BAS agents certainty.

The Chair advised that in developing the BAS agent renewal strategy, the Board conducted a small survey of BAS agents. The purpose of the survey was to gauge awareness of the renewal requirements that will apply to BAS agents who notified the Board to become registered, the likelihood that BAS agent notifiers will renew their registration and to test whether certain messages and incentives will encourage agents to renew early.

The Chair noted the following findings from the survey:

  • the general BAS agent renewal awareness, in terms of when to renew, how and what was required, was higher than expected;
  • the majority of agents intended to renew, and those who could renew now were keen to renew now;
  • more agents were already studying or had completed study than expected; 
  • agents were generally positive about having to do study to renew their registration, with many seeing it as beneficial in increasing their knowledge and professionalism;
  • the possible of additional registration time for those who renew early was seen as an added bonus but was not the primary motivation to renew early;
  • agents wanted simple and easy to understand instructions to assist them in renewing their registration; and
  • awareness about the remaining transitional registration option and the available of recognised prior learning was low.

5. Continuing professional education

The Chair noted that the Board are looking to issue a CPE exposure draft for public comment at the end of July. The Chair thanked Forum members for their comments on the draft exposure draft and also encouraged further feedback during the formal public consultation stage.

In developing the exposure draft, the Board held focus groups in Sydney, Melbourne and Brisbane with BAS agents who were not members of an association. The feedback received from the focus groups was largely positive as a way to lift standards within the profession. However, costs and time pressures were noted.

6. Professional indemnity insurance

The Chair and Secretary of the Board gave an update of Board’s recent professional indemnity insurance (PII) activity.

On 29 April 2011, the Board issued written notice to approximately 55,000 registered agents. As at 14 June 2011, approximately 19,363 tax practitioners (15,615 tax agents and 3,748 BAS agents) had notified the Board of their PII cover arrangements.

The Chair noted that there was some confusion amongst agents as to whether or not they needed to have PII cover and if they needed to notify the Board. To address this confusion, the Board issued further information on the website to address these areas of confusion.

Consultative Forum members supported the Board’s initiative and agreed that such a step was a positive step towards protecting consumers of tax agent services.

The Board have received a number of requests for exemption on the basis of low turnover. The Chair noted that this was scenario was specifically considered by the Board and a decision was made that those in this category would still need to have PII cover as it is an important consumer protection measure. A number of Forum members indicated that their associations had received similar requests for exemption.

7. Disclosure of Board information to the professional associations

The Chair addressed the question of disclosing Board information to professional associations. This question had arisen at previous Forum meetings.

The Chair advised that the Board can notify a professional association when the Board:

  • imposes an administrative sanction (other than a written caution) on a registered agent who is a member of that professional association; or
  • terminates the registration of a registered agent who is a member of that professional association (exception in circumstances where the agent has surrendered their registration)

While the Board is restricted in what information it can provide to the professional associations, the Chair encouraged the associations to notify the Board of any member agent conduct that may be of interest or concern to the Board. In particular, the Board would welcome information when an agent decides to surrenders their association membership.

8. Website redesign

The Board is undertaking a refresh of its website. The purpose is to enhance the user experience through improved navigation and content, greater clarity and to achieve a more effective and efficient outreach. The Chair sought feedback from Consultative Forum member as to what features they would like to see incorporated into the new website.

The Chair noted that the update to the look and feel of the website had already taken place and that he was seeking feedback from Forum members about how the website could be better improved.

The following suggestions were provided by Forum members:

  • New section up front
  • Include a RSS feed
  • Create a discussion board for agents to utilise

9. Close of Meeting

The Chair thanked everyone for attending the meeting.  The Forum agreed to meet again on 28 September in Sydney. The venue will be confirmed closer to the meeting date.

A tentative date for the end of year Forum meeting was scheduled for 14 December in Canberra. This meeting date would be confirmed at the next Forum meeting.