SMSF practitioners who owe money to the ATO have been encouraged to settle their debt to sidestep the risk of disciplinary action from the Tax Practitioners Board (TPB) in the event they are also registered as a tax agent.
The warning was given by TPB board member Julie Berry, who said data analytics of the board’s membership during the past year found 2700 tax practitioners who were also trustees of their own SMSF had outstanding annual returns for their fund.
Berry also said the data revealed 5000 tax practitioners had a collective ATO debt of $300 each and had no active payment plan in place.
The numbers were part of a presentation of the TPB’s work given by Berry at the SMSF Association 2020 National Conference on the Gold Coast last week.
During the presentation, she urged tax practitioners who had outstanding tax returns, SMSF annual returns and debts to the ATO to lodge those documents and make those payments, but to also disclose any breaches to the TPB as part of their registration requirements with the board.
“Don’t be afraid to disclose you have a debt or outstanding tax obligation. Do be afraid if you don’t disclose and we find out,” she said.
“It is much better to disclose and have a conversation around how that might have occurred than not to disclose because that then becomes dishonest behaviour which leads to a breach of [the TPB’s] code of ethics and leads us down a very different path.”
She said the board also found more than 3500 tax practitioners who had not lodged personal income tax returns or business activity statements with the ATO and was concerned with the size of this group.
“I urge you to seek help if you are struggling to do your own returns. The reason we usually get is because the agent says ‘I am focusing on my clients’, which is a bit like a builder who has not finished their own house,” she noted.
“So, I say to you ‘get a builder’ because it is a requirement of your registration that you maintain your obligations and it is not good enough to say clients come first. Be a client of someone else if you are unable to manage for yourself.”
The data analytics program led to an information campaign with TPB members and after 12 months that project had reduced tax agent debt from $114 million to $64 million and resulted in 6600 late lodgements of documents with the ATO.