TPB Consultative forum report — 7 May 2020
Thank you for joining Ian Klug (TPB Chair), Michael O’Neill (CEO/Secretary), Board member Julie Berry and fellow Tax Practitioners Board (TPB) colleagues at the TPB joint Consultative forum held on Thursday 7 May 2020. We appreciate your valuable input and have produced a summary below to assist your association with communicating key messages to your members.
Update from the Chair and the Board
- The TPB Chair provided the forum with an update in relation to areas of strategic focus for the Board.
- The forum noted that the Board meets approximately every 6 to 8 weeks — with meetings held face to face in Sydney, Melbourne or Brisbane. However, in light of COVID-19, meetings are taking place via video conference.
- The forum noted that the meeting is usually a one-day meeting and allows the Board to discuss matters of strategic importance and to receive an operational update from the Secretary.
- It was noted that matters considered at the most recent Board meetings have been in relation to:
- TASA Review
- TPB Corporate Plan 2020-21
- TPB Culture Review
- New business systems for the TPB
- Refining the TPB’s end-to-end compliance process.
Items raised by forum members
TFNs and emails
- The inclusion by practitioners of a client's TFN in an email was raised as a matter for discussion at the forum.
- The TPB advised that it would prepare a Practice Note setting out the matters that it would expect practitioners to take into account in relation to the inclusion of TFNs in emails, which will be provided to forum members for feedback out-of-session, prior to publication on the TPB’s website.
Review of the R&D tax incentive
- The forum considered an issue raised in relation to the findings in relation to a review conducted by the Australian Small Business and Family Enterprise Ombudsman (ABSFEO) in December 2019.
- The forum noted that the findings of the review focused on the administrators (ATO and AusIndustry) and small business, and that most recommendations in the report were for ATO and AusIndustry, but the TPB was mentioned in relation to five recommendations.
- The TPB confirmed that 194 practitioners are currently registered with an R&D condition (compared with 118 tax practitioners registered with an R&D condition as at end-February 2019). The TPB further advised that it has received a list of higher risk R&D advisers from the ATO, a number of which are the subject of enquiries or investigations by the TPB. It was noted however that in some cases, TPB action is contingent upon findings being made by the ATO and/or AusIndustry.
TPB guidance on labour hire firms
- A query was raised in relation to the TPB’s information sheet on labour hire/on-hire firms, published in 2016, which assists labour hire/on-hire firms involved in the provision of tax related services to determine whether they need to register with the TPB.
- The TPB will seek feedback out-of-session in relation to the TPB’s information sheet and position on labour hire/on-hire firms generally.
The TPB provided an update in relation to the measures it has implemented to support tax practitioners through the COVID-19 pandemic.
Board approved course assessments
- The forum was advised that where supervised assessments cannot be conducted in line with the TPB’s requirements for Board approved courses, the TPB will accept assessments conducted under three different options:
- remote or online invigilation
- software driven invigilation
- alternative arrangements on a case by case basis.
- The forum noted that to date, six alternative arrangements have been approved, with two further proposals currently being considered.
Continuing professional education
- The forum noted that the current 25% cap for relevant technical / professional reading activity is temporarily being removed immediately for the next six months (until the end of September 2020). However, to take advantage of the removal of the cap a tax practitioner must:
- first and foremost, explore and undertake online CPE offerings (as these online activities are becoming more readily available)
- keep a CPE log detailing all the CPE activities undertaken.
Resilience and dealing with challenging times
- The forum raised whether the TPB would consider attendance of a webinar in relation to resilience and dealing with challenging times as appropriate CPE in these extraordinary times.
- The TPB acknowledged that during this difficult time it is important for tax practitioners to manage their mental health and wellbeing in order to continue to provide services to clients. Therefore, the TPB advised that it will temporarily be accepting a small amount of educative health and wellbeing activities, such as attending webinars about how to manage stress and self-care, as being a relevant CPE activity that will count towards CPE hours for TPB purposes. However, the TPB expects that the vast majority of CPE activities completed by tax practitioners must still be relevant to the tax (financial) advice, tax agent or BAS services they provide that maintain, develop or promote their skills, knowledge or attributes.
Annual declarations for tax practitioners
- The TPB advised that tax practitioners who have an annual declaration due on or before 31 December 2020 will not be required to submit that annual declaration. This means that these tax practitioners will next need to complete their annual declaration in 2021 or 2022 (if they are required to renew their registration in 2021).
- The forum noted that in April, 5% of enquiries to the TPB’s call centre still related to practitioner annual declaration requirements and sought assistance from the associations to notify their members of the TPB’s concessional approach.
- The forum was advised that affected tax practitioners (including transitional tax (financial) advisers) with a renewal application due in the coming months and that are unable to lodge their renewal application before their registration expires, are invited to contact the TPB so that their situation can be discussed and appropriate arrangements can be made if required.
- The forum noted that 7% of enquiries received by the TPB relate to renewals, and that there is an assumption that appropriate arrangements, such as extending a practitioner’s registration period, will be automatic. The TPB emphasised that this is not the case, and that it can only extend a registration period for a tax practitioner upon initiation and discussion with the practitioner.
- The TPB advised that compliance activity might be disrupted because practitioners have other priorities and because of other conditions such as social distancing, office closures, and travel and system access restrictions.
- The forum noted that the TPB will be contacting practitioners in relevant circumstances to determine the best way to proceed and make relevant accommodations where appropriate, such as exercising a discretion to extend the 6-month investigation period, due to matters beyond the control of the TPB.
- The TPB has contacted approximately 70 tax practitioners to let them know that if they are experiencing difficulties in relation to ongoing compliance matters as a result of COVID-19, to contact the TPB. The TPB has only received a minimal number of enquiries from tax practitioners in this regard.
- The forum was advised that if a tax practitioner is concerned about whether they will meet the renewal requirements they should contact the TPB to discuss their situation.
- The TPB noted that should someone contact the TPB to say that they are going to fall short of the required amount of relevant experience, the TPB would ask:
- why they are going to be short
- by how much they are short by
- when they think they will be in a position to meet the relevant experience requirements.
- The TPB advised that it will assess the information provided to determine what is the best course of action.
Annual Declaration for recognised associations
- The TPB advised that it will continue the annual declaration process with recognised associations but allow further time for associations to respond to its annual declaration request (i.e. two months).
- The forum noted that if an association needs additional time to submit their response to the TPB, they may send a request for an extension of time to the TPB (which includes a brief explanation of the reason for the extension). The TPB will consider requests on a case-by-case basis, considering the particular circumstances of the association.
BAS services legislative instrument
- The forum noted that on 15 April the TPB registered a legislative instrument, which took effect on 16 April to extend the services that BAS agents can legally provide to include advice in relation to the JobKeeper Payment and the cash flow boost initiative (because the definition of what is a BAS service or BAS provision in the TASA do not include the new laws).
Specific Code guidance
- The TPB noted that it has received a number of queries relating to tax practitioner obligations when advising in relation to JobKeeper and Cash flow boost. The forum noted that the TPB will provide a pragmatic approach to compliance action associated with the JobKeeper and Cash flow boost measures.
- The TPB also noted that it is in the process of developing FAQs for tax practitioners to provide more practical guidance.
- The forum noted that the ATO systems for making JobKeeper and Cash flow boost claims on behalf of clients are different and this is also having an impact on tax practitioners. It was also noted that in order to lodge amendments to claims made under these measures, tax practitioners are required to telephone the ATO’s call centre, rather than making the amendments via the ATO’s systems.
- The forum noted that the TPB’s compliance investigation approach will continue to support the majority of tax practitioners while also adjusting to target highest risk practitioners who may inappropriately take advantage of stimulus measures.
- The TPB advised that its compliance approach, in conjunction with the ATO, will be modified to focus on the Government’s COVID-19 stimulus measures, in order to safeguard the integrity of the new measures.
- The forum noted that the TPB is working closely with the ATO to develop a strategy to treat and stop inappropriate tax practitioner behaviour.
- The TPB advised that it has commenced two investigations into two entities that may be providing tax services in relation to the Government’s stimulus relief measures whilst unregistered.
- The TPB noted that it has prepared two COVID-19 specific webinars, with the first webinar being presented by the TPB and had 1,000 attendees and second webinar will be jointly presented with the ATO on 12 May.
- The ATO’s forum representative briefly outlined the matters facing the ATO, particularly in relation to the COVID-19 stimulus measures, including:
- On 5 May, the ATO exceeded one million early release of superannuation applications which are to the value of over $10 billion dollars in release.
- Some clients who have applied for early release of Super through MyGov may start receiving calls from the ATO to confirm eligibility.
- The ATO is aware that there are practitioners who are using clients’ myGov accounts to apply for measures on behalf of their clients. The ATO does not consider this to be appropriate.
- Measures designed to protect the integrity of the early access to superannuation scheme have helped detect a small amount of fraudulent activity associated with the program, although the ATO confirmed that its systems were not hacked.
- A small number of people appear to have had personal details unlawfully used in a bid to defraud the program. This has been stopped and the impacted individuals are being contacted. The matter is currently under investigation by the AFP.
- The ATO will work with tax professionals and employers to avoid and overcome genuine mistakes. However, the ATO reiterated that it has a low tolerance for people doing the wrong thing. As such the ATO has setup a number of programs to protect the integrity of the system at this time around all three measures – Cash Flow Boost, JobKeeper and Early Access Super.
- The ATO has a compliance and risk program in place in relation to those registered practitioners and unregistered preparers making illegitimate claims.
- The forum suggested that it might be timely for the ATO and TPB to publish messaging to the public in relation to the benefits of using a registered tax practitioner.
- The forum also raised the immense pressures facing tax practitioners at present, and the TPB noted that it would review the current website messaging in relation to mental health support.
- The TPB advised that new and renewal application numbers remain steady.
- The forum noted that the TPB updated its website to include some general information about the Board’s approach when determining period, of not more than five years, during which the practitioner may not apply for registration. This guidance can be found here.
- The TPB advised that the new TPB register will improve transparency for the general public, including more details of practitioners who have been sanctioned for misconduct, and for others who have resigned or surrendered their agent’s registration.
- The forum noted that to assist tax practitioners who have received a sanction order to undertake a course of education, the TPB is implementing a formal process aligned with the current approach for Board approved courses. This issue has arisen as some tax practitioners had difficulty locating an appropriate course. The forum noted that a new guidance document will be drafted on what is required for a course that is being undertaken for the purposes of an education order.
- The forum was advised that in order to enhance the working relationships between the TPB and the professional associations, the TPB is currently in the process of finalising a memorandum of understanding (MOU) with one of the professional bodies. Forum members are invited to contact the TPB if they are interested in formulating a MOU with the TPB.
- The ATO’s forum representative briefly provided the following general update:
- The ATO is well positioned to support those who need to transition from AUSkey to myGovID and RAM.
- The ATO is preparing and progressing well for another busy tax time.
- The ATO is still focussing on bushfire support for tax practitioners and their affected clients.
Forum feedback on survey
- The forum noted that the feedback received from forum members in the survey on the TPB’s consultative measures will assist the TPB in improving the ways in which it consults with stakeholders.
- The Forum noted a suggestion that Combined Consultative forum meetings could be held over a full day. The TPB noted that it will continue to be responsive in organising the frequency and duration of forum meetings to ensure there is adequate time to discuss key items.
Draft Corporate Plan 2020-21
The Forum noted the TPB’s Corporate Plan is due for release in June 2020, and provided the TPB with feedback in relation to the Corporate Plan.
Strengthening the TPB culture
- The forum noted that the TPB underwent a culture review at the end of 2019, which involved a survey of TPB staff and feedback from a range of external stakeholders, including seeking association feedback.
- The TPB is currently reflecting upon the report’s findings and recommended areas for improvement.
Review of the TPB and TASA
- The forum noted that the TPB continues to await the Government response, with the timeframe still unknown, noting that the May budget has been deferred to October.
- The TPB advised that it is undertaking, at the request of Treasury, a charging review of the TPB framework.
Banking Royal Commission
- The forum noted that on 31 January 2020, Government released draft legislation for consultation in relation to 22 recommendations and two additional commitments from the Financial Services Royal Commission.
- The TPB advised that it made submissions to Government in relation to the draft legislation, which were generally supportive of proposed law changes.
BAS services legislative instrument
- The forum noted that on 17 January 2020, the TPB released a discussion paper concerning the proposed expansion of the BAS services legislative instrument to include additional services (in particular, representing clients to the Commissioner of Taxation) relating to the superannuation guarantee contributions that BAS agents ought to be lawfully permitted to provide. A number of associations indicated that they were supportive of what was contained in the draft instrument.
- The TPB would be seeking out of session feedback from the Forum, before seeking to finalise the legislative instrument.
- The forum noted that the TPB has reviewed the Explanatory papers on Professional indemnity (PI) insurance policy requirements, as part of the overall program of policy guidance review.
- The forum noted that the outcome of the review has resulted in minimal changes to the TPB’s PI insurance policy requirements.
- The forum noted that the TPB will issue a media release and proceed to develop a legislative instrument.
- The forum noted that a public discussion paper in relation to the TPB’s review of its CPE requirements was released on 19 February, with the 28-day comment period ending 18 March 2020.
- The TPB advised that there has been significant interest in the discussion paper, with about 50 submissions received.
- The TPB is mindful of COVID-19 impacts and will time our review of CPE accordingly.
Education legislative instruments
- The TPB noted that as part of its ongoing review of its information products, it is undertaking the conversion of existing Proposed Guidelines and Explanatory Papers to legislative instruments.
- The TPB advised that it has drafted legislative instruments in relation to the following education requirements for registration:
- a course in basic accountancy principles that is approved by the Board
- a course in commercial law that is approved by the Board (for tax agents)
- a course in Australian taxation law that is approved by the Board (for tax agents)
- a course in basic GST/BAS taxation principles that is approved by the Board
- The TPB will seek feedback from members in relation to the legislative instruments out-of-session, noting however, that the TPB is not proposing to change the underlying requirements in relation to the Board approved courses.
- The forum noted that FASEA’s CPD requirements do not align with the TPB’s CPE concessions as a result of COVID-19. The TPB advised that it would contact FASEA to re-notify them of the TPB’s CPE concessions.
- The forum noted that it would provide an update at the next forum meeting in relation to the behaviors and trends underlying the TPB’s compliance figures.
The next meeting is scheduled to be held in August. A ‘save the date’ notification will be forwarded to participants, pending final details.
Last modified: 14 May 2020