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TPB Consultative Forum Report 6 April 2016

TPB Consultative forum report – 6 April 2016

On Wednesday 6 April 2016, Ian Taylor (Chair) and Tax Practitioners Board (TPB) colleagues held a TPB consultative forum in Sydney with representatives predominantly from a number of TPB recognised professional tax and BAS agent associations.

The key points discussed at the forum are summarised below. In accordance with past practice, this report 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

  • The Chair noted that a new Board has been in place since 22 January 2016 and expressed his appreciation for the contributions of previous Board members. It was also noted that brief biography information in relation to current Board members is available on the TPB website. The current Board members include:
    • Ian Taylor (Chair and registered tax agent; reappointed for 3 years)
    • Julie Berry (registered tax (financial) adviser; appointed for 18 months)
    • Jim Hawson (registered tax agent; appointed for 3 years)
    • Julianne Jaques (barrister specialising in taxation; appointed for 3 years)
    • Ian Klug (chartered accountant and professional director; appointed for 3 years)
    • Greg Lewis (registered tax agent and small business proprietor; appointed for 3 years)
    • Russell Smith (registered BAS agent; reappointed for 18 months)
    • Yvonne Sneddon (professional non-executive director; reappointed for 18 months).
  • The TPB’s strategy and direction (for the period 2016-19) will be reviewed in the near future, with an update to be provided at the next forum – in this regard, it was observed that there will be particular focus on:
    • objective(s), strategies and goals
    • key performance indicators (KPIs)
    • service standards.
  • It was also highlighted that due to budgetary issues being faced by the TPB, in particular, to process a large number of tax (financial) adviser renewal applications from July 2017, there may be a need to reconsider the future work program and service standards in due course.

Registrations

  • As at the end of February 2016, there were 75,489 registered practitioners (tax agents, BAS agents and tax (financial) advisers). As expected, there was a spike in tax (financial) adviser applications received before the notification period ended on 31 December 2015. In particular, as at 29 February 2016 there were 19,046 registered tax (financial) advisers, comprising 1,060 Australian financial service (AFS) licensees, 17,967 authorised representatives (ARs) and 19 other representatives in comparison to 16,937 registered tax (financial) advisers (comprising 846 AFS licensees and 16,091 ARs) as at the end of October 2015 (as reported at the previous forum).
  • The TPB is continuing to meet service standards as outlined in the TPB’s Strategic plan; however, it was noted that the processing times for all applications (new and renewals) may be impacted by the current resourcing constraints.
  • The known percentage of registered individual tax and BAS agents who are members of a TPB accredited recognised professional association has increased slightly since the last consultative forum – as at 29February 2016 the proportion was:
    • 87% of individual tax agents (compared to 86% at 31October 2015)
    • 61% of individual BAS agents (compared to 60% at 31 October 2015).

Compliance

  • As at the end of February 2016, 708 cases had been finalised in the financial year to date (with most finalised within service standards) and there were 439 matters on hand. There continues to be a very small proportion of registered practitioners on which sanctions are applied. There has also been a continuing trend with the Administrative Appeals Tribunal affirming the TPB’s decisions.
  • The number of complaints and referrals received year-to-date as at the end of February 2016 (from 1 July 2015) was 1,128, with this number increasing slightly in comparison to the corresponding period the previous year (1,023 for the period 1 July 2014 to 28 February 2015) in conjunction with increasing awareness of the TPB (including pursuant to Outreach activities and the June-July 2015 tax time awareness campaign). It is also recognised that there is still work to be done in continuing to build awareness of the role of the TPB and registered tax practitioners among the public community at large.
  • The recent February 2016 civil penalty judgment in the matter of TPB v Lamede Group Pty Ltd [2016] FCA 63 was highlighted, noting that the Federal Court of Australia ordered Ms Lorraine Amede of Brisbane and her company, Lamede Group Pty Ltd, to pay $81,500 in penalties for unlawfully providing and advertising tax agent services (Ms Amede was only registered as a BAS agent).

Unregistered agents

  • Registered symbol: Legal formalities have been completed in relation to extending the registered symbol to tax (financial) advisers (to be available for tax (financial) advisers registered under the standard registration option) and for updated guidelines to allow for a landscape option, with activity now being undertaken to progress implementation and delivery. Further information will be provided in due course.
  • It was highlighted that despite resourcing constraints, the TPB is continuing with a dedicated project team to undertake activity to target unregistered entities who advertise BAS agent services while unregistered. In this regard, it was noted that the TPB will be seeking relevant information from recognised association members in relation to unregistered entities and expressed appreciation to associations for their offers of support with this activity. Further, it was observed that there is a relevant education element involved (including noting the distinction between a bookkeeping and BAS agent service).

Annual declarations for registered tax and BAS agents

  • It was noted that the Annual declaration process commenced from late 2015 for registered tax and BAS agents (with the annual declaration due on the anniversary of the practitioner’s registration renewal date, other than in the year that registration needs to be renewed). There has been extensive communications activity to highlight the requirement for registered tax and BAS agents to now complete an annual declaration to demonstrate they are meeting their ongoing obligations.
  • There has been a good response rate to annual declaration requests and the TPB is appreciative of associations supporting key messages, including reinforcing that annual declarations are a formal request from the TPB that requires a timely response.

Communication activities

  • The forum noted the listing of recently issued TPB information products and observed that a range of material continues to be developed, including:
  • Webinars and Outreach: The TPB is continuing to present Webinars and to be involved in ATO Open forums, with these events being well received and witnessing a good level of attendance and interaction. It was also reiterated that:
    • these sessions are free and count towards continuing professional education
    • details and registration for upcoming Webinars are available via the TPB website
    • there will continue to be a rolling schedule and ongoing development of Webinars pursuant to feedback (including suggestions for topics).
  • It was also noted that, subject to funding, the TPB plans to undertake another public awareness campaign in 2016 specifically focusing on small business owners to facilitate further awareness of the need to use a registered tax practitioner.
  • In addition to ongoing communications activity, the TPB is also continuing to progress work on reviewing and improving website content for the purpose of enhancing the user experience and reduce the time taken for processes, with usability testing informing this work.

Regulatory reform agenda update

  • It was reiterated that the Regulatory Performance Framework (RPF) assesses one aspect of regulatory performance, concerning the administration of regulation, with regulators to report on performance against six outcomes-based KPIs covering a range of issues (including communication, risk-based and proportionate approaches, transparency, reducing regulatory burden, and continuous improvement).
  • It was noted that the first reporting period for the annual self-assessment metrics is for the year ended 30 June 2016 and that the TPB will be undertaking this activity parallel with the requisite Annual report requirement. It was also noted that self-assessment report information will be referred to the forum for validation prior to publication on the TPB website and that a sample metrics document (noting 2014-15 year data) is currently published on the TPB website.
  • It was observed that the metrics document was developed having regard to current available TPB reporting (including the Annual report), relevant RPF requirements and previous forum feedback in 2015. It was also highlighted that out-of-session comment is expected to be sought from forum members on a 2015-16 year self-assessment report in due course.

Policy matters

Code of Professional Conduct guidance for tax (financial) advisers

  • The TPB is currently considering submissions received in relation to the Exposure draft information sheet TPB(I) D31/2015 Code of Professional Conduct – Confidentiality of client information for tax (financial) advisers (Code item 6 of the Tax Agent Services Act 2009), before determining next steps.
  • It was also noted that the TPB is progressing the development of guidance on other Code items for tax (financial) advisers, having due regard to feedback received from the Financial adviser forum , in particular:
    • Code Item 9 – Reasonable care: You must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client.
    • Code Item 10 – Reasonable care: You must take reasonable care to ensure that taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client.
    • Code Item 5 – Managing conflicts of interest: You must have in place adequate arrangements for the management of conflicts of interest that may arise in relation to activities undertaken in the capacity of a registered practitioner.
    • Code Item 4: You must act lawfully in the best interests of your client.

    The TPB is currently considering the Financial adviser forum feedback and guidance, incorporating further changes as appropriate, prior to any release of public exposure draft documents in due course.

BAS services legislative instrument

  • It was noted that the TPB is continuing to progress work in relation to providing for a BAS services legislative instrument, including liaising with the office of the Minister for Small Business and Assistant Treasurer, responding to relevant enquiries and making further changes as required.
  • It was confirmed that the TPB will advise of any further developments and is seeking registration of the legislative instrument at the earliest opportunity.

Cloud computing and the Code of Professional Conduct

  • It was noted that a number of submissions (including late submissions) have been received in relation to the Exposure draft (ED) TPB(I) D30/2015 Cloud computing and the Code of Professional Conduct, with the submissions containing a range of views.
  • It was also noted that one of the themes raised in the submissions is that further consultation should occur.
  • It was confirmed that the TPB is currently considering submissions in relation to the ED, including suggestions in relation to further consultation, before determining the next steps.

Other business

Regulatory Assurance complaints management and TPB internal review process

  • The forum noted an overview of the complaints management and independent internal review processes. It was also noted that each complaint is risk assessed and that complainants are encouraged to contact the TPB in the first instance if seeking to ascertain and/or provide further information in relation to any complaint they may have lodged with the TPB. It was also highlighted that complaint finalisation letters are being reviewed for the purpose of providing further clarity and information where possible (being mindful of privacy and secrecy requirements).
  • It was noted that further information, including in relation to the TPB’s role and complaints handling process, is available on the TPB’s website. The TPB will also continue to reinforce relevant messaging as appropriate, including noting that the TPB takes all complaints seriously (with administrative processes ensuring complaints are dealt with properly and impartially).

Payroll service providers

  • It was confirmed that the TPB is still working to determine and facilitate an acceptable qualification and will follow-up with the relevant stakeholder for the purpose of progressing this activity in due course.

Next meeting

  • The Chair thanked forum members for their attendance and continuing feedback.
  • It was observed that the next meeting dates were currently proposed for July 12 (Melbourne) and November 9 (Sydney).

Last modified: 17 May 2016