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TPB Financial advisers forum report - 6 March 2019

TPB Financial advisers forum report - 6 March 2019

Thank you for joining Michael O’Neill (CEO / Secretary), Julie Berry (Board member) and fellow Tax Practitioners Board (TPB) colleagues at the TPB financial adviser forum held on Wednesday 6 March 2019. We appreciate your valuable input and have produced a summary below to assist your association with communicating key messages to your members.

Board appointments

  • The Forum noted the recent Board appointments – in particular:
    • appointment of Ian Klug AM as the new Chair (in a non-executive Chair role) for a period of three years, commencing from 18 February 2019
    • appointment of a new Board member Debra Anderson on 18 February 2019 for a period of three years
    • reappointment of current Board members Greg Lewis, Dr Julianne Jaques and Jim Hawson for a period of three years.
  • It was also noted that Julie Berry, Peter de Cure, and Ria Sotiropoulos continue their existing Board appointments until July 2020.
  • The CEO/Secretary (Michael O’Neill) acknowledged the great work of former Chair Ian Taylor, noting that Ian helped guide and lead the TPB over the last six years.

TASA review

  • The Forum noted the announcement by the Assistant Treasurer (the Hon Stuart Robert MP) of a review into the effectiveness of the TPB and the operation of the Tax Agent Services Act 2009 and the Tax Agent Services Regulations 2009, with Mr Keith James appointed to chair the review and to be assisted by the Department of the Treasury.
  • The Forum referred to the copy of the media release and terms of reference, noting that:
    • submissions in response to the terms of reference (which notes six focusing questions) are due by 23 April
    • a discussion paper will then be circulated by June 2019 (once the head of the review has considered the submissions) and that stakeholders will then be provided with a further opportunity to contribute views on substantive issues raised in the discussion paper.

Operational update

Communications update 

  • The Forum noted the TPB has shifted its focus in communications to a more targeted approach, and that the TPB will continue to build on its narrative to focus on firmer regulatory action being taken and to raise the public profile of the TPB to better protect consumers.
  • The Forum noted a high-level TPB communications plan – outlining the TPB communications focus and a summary of communication strategies (consumer, compliance, practitioner support, and staff communications strategies) and objectives.
  • The TPB also confirmed its continuing commitment to a rolling schedule of webinars to support registered tax practitioners, noting that webinars continue to be well-received and that a schedule of webinars (until June) is available on the TPB website. In particular, it was highlighted that a new webinar called “Improving your online experience” will be held on 19 March to discuss changes to My Profile and the recently introduced proof of identity process, and what practitioners need to do to complete their annual declaration.

Annual declarations for registered tax practitioners

  • The TPB is taking steps to address issues with tax practitioners who fail to lodge their annual declarations on time. In particular, from late March 2019, the number of reminders sent to registered tax practitioners will be reduced and specific directives will be employed (to lodge the annual declaration) rather than an invitation or reminder.
  • The TPB is appreciative of support from the professional associations in reminding relevant members to keep contact details up to date in My Profile, to facilitate relevant requests being received and actioned on a timely basis.

Review into the compliance focus

  • The firmer compliance approach has been facilitated by fresh data analysis indicating areas of non-compliance by registered tax practitioners.  The TPB is adopting a more overt approach for dealing with unregistered service providers and will provide ongoing updates on results in due course.
  • Currently there are about 1,000 open investigations into tax practitioner compliance. Where relevant, the TPB is working with other agencies (such as the ATO, ASIC or the police) on joint strategies for investigation into tax crime or misconduct.

CPE reviews

  • As highlighted in the February 2019 TPB eNews editions, the TPB is progressing its review in relation to tax practitioner compliance with the TPB’s CPE policy requirements. This activity is now being expanded further to include tax (financial) advisers who are renewing their registration (from February 2019 onwards), as well as to members of recognised associations.
  • The TPB will continue to provide updates on the outcomes of the TPB’s CPE review program. As at 18 February 2019, CPE review results were as follows:
    • 255 CPE reviews had been completed:
      • 208 practitioners were found compliant
      • 37 practitioners received education letters
      • 10 practitioners surrendered their registration.
    • 107 CPE reviews are currently in progress, of which:
      • three have been referred for investigation
      • three have been referred to the Board for consideration of outcomes.
  • The TPB is reminding practitioners to maintain records and evidence of CPE activities completed.

Debt and lodgement strategy update

  • It was observed that following the TPB’s call to action, thousands of lodgements and millions of dollars in debt payments have been made. The TPB has been appreciative of the support from professional associations in disseminating these calls to action.
  • As at 18 February 2019, status results were as follows:
    • In terms of ATO debt, the number of tax practitioners with a debt of over $300 (with no active payment arrangements), had reduced from approximately 5,000 to 3,500, representing a decrease in total debt of approximately $23 million (from nearly $115 million to just over $90 million).
    • The number of tax practitioners who had not lodged one or more of their personal income tax returns, or for those of their associated entities, had reduced by almost half from over 2,500 to just under 1,300.
    • Those with more than one outstanding BAS, or for their associated entities, had also almost halved from over 1,000 to under 600.
    • Those tax practitioners with a combination of both outstanding debts and lodgements have reduced in number from just under 500 to under 200.  
  • The TPB media release of 28 February 2019 highlighted the positive response to the strategy, and indicated that the TPB will now initiate investigations as appropriate.
  • The TPB is now in the next phase of the project and especially focused on those higher risk practitioners who have failed to comply. On 1 March 2019, 35 notices of investigation issued to the most egregious practitioners with outstanding debt/lodgements.
  • The TPB will continue to engage with relevant stakeholders and share further key results. It was also noted that an evaluation of the project will be undertaken in mid-2019.

Proof of identity – status update

  • It was reiterated that new positive proof of identity (POI) requirements commenced from November 2018, being a one-off process that links into the Document Verification Service (DVS) to help protect a practitioner's identity and aligns the TPB with Australian government standards. It must be completed by all new individuals applying for registration, and also applies to all registered tax practitioners with annual declarations due from 1 December 2018.
  • The TPB has listened to feedback from practitioners and is currently building business rules for the purpose of improving the online experience.
  • The TPB has developed information providing useful tips about POI.
  • It was suggested that practitioners complete the new POI process at the earliest opportunity, so as to avoid any delays that may eventuate if waiting until completion of time sensitive tasks such as lodging annual declarations or submitting renewals.
  • The TPB noted its appreciation of association support in highlighting key TPB messages and tips to relevant members.

Policy matters

Review of TPB information products

  • It was noted that the TPB is seeking to undertake a dedicated review of its policy and guidance material (architecture and content) and sought feedback on an initial proposal to amend the suite of TPB policy information products.
  • It was confirmed that feedback on specific focusing questions (as included in the relevant discussion paper) could be provided out of session, noting that a relevant request will issue in conjunction with distribution of the communique.
  • It was also noted the TPB intends to develop case decision summaries on a go-forward basis.

CPE policy requirements

  • It was confirmed that the TPB is seeking Forum members input to assist in the TPB’s review of its CPE policies – in particular, it was noted that:
  • It was confirmed that feedback on specific focusing questions (as included in the relevant discussion paper) could be provided out of session, noting that a relevant request will issue in conjunction with distribution of the communique.

FASEA requirements

  • It was noted that the Financial Adviser Standards and Ethics Authority (FASEA) has recently finalised a number of legislative instruments and policies. The TPB is currently analysing these requirements in relation to the current TPB requirements and will seek further clarification as appropriate.  The Forum suggested that the TPB engage with education providers to ensure consistency in the TPB’s and FASEA’s education requirements.
  • The TPB will also progress work on developing a snapshot website document comparing how TPB guidance corresponds with FASEA guidance, and will subsequently convert this material into relevant webinar content in due course. 

Other matters

Whistleblower legislation

  • It was noted that the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 creates a whistleblower protection regime for disclosures of information by individuals regarding breaches of the tax laws or misconduct in relation to an entity’s tax affairs.
  • In particular, it extends persons who can receive a protected disclosure (eligible recipient), including a registered tax practitioner who provides services to the entity, without fear of breaching the Code of Professional Conduct (Code Item 6 – Confidentiality of client information) in accordance with having a legal duty to disclose.
  • The TPB is currently reviewing the new law in conjunction with the ATO and will issue guidance in due course to assist tax practitioners. 

Royal commission

  • It was noted that Commissioner Hayne released his final report on 4 February 2019, with the purpose of the review being to inquire into, and report on, whether any conduct of financial services entities might have amounted to misconduct and whether any conduct, practices, behaviour or business activities by those entities fell below community standards and expectations.
  • It was noted that a number of findings and recommendations will impact on the role of the regulators more generally, with the Board currently considering the impacts on the TPB. There will also be continued monitoring of any developments in relation to implementation of relevant recommendations.

Next meeting

The next meeting is scheduled to be held on 4 July 2019 in Sydney. A ‘save the date’ notification will be forwarded to participants, pending final details.

Last modified: 1 April 2019