Accounting, Tax

Tax agent switching requires care

SMSF ATO TFN ABN Client linking SMSF Association

The SMSF Association has emphasised the need for tax agents to acknowledge a critical detail when executing a new fund authorisation.

The SMSF Association has reminded tax agents appointed as replacements to incumbent fund practitioners of the need to execute a specific procedure to ensure proper access to the records of their new clients.

Specifically, the industry body has emphasised the need for tax agents to reference an SMSF’s tax file number (TFN) and not its Australian business number (ABN) when activating a new authorisation.

“At this point it’s crucial that agents select the correct account level when linking clients to their client list,” the association stated in its daily member newsletter.

“For example, using the SMSF’s TFN allows a linkage to the income tax account and grants access to all relevant accounts and roles.

“Conversely, using the SMSF’s ABN results in the activity statement account being the only available option. Where an agent selects the activity statement account, a client will need to submit another nomination to grant access to the income tax account.”

The practitioner body also warned of an unintended consequence that may arise if the client linking process is performed incorrectly.

“Incorrect linking can also lead to the inadvertent removal of an existing agent, necessitating a further nomination for that agent to be reinstated,” it noted.

Accordingly, the association has revealed the ATO is making efforts to avert errors with this process, which could result in adverse outcomes, through targeted messaging when a tax agent is actioning a nomination, prompting them to make the correct required choices.

To this end, it referenced QC 101678 as a source of additional information on the topic available for practitioners.

It was also pointed out the regulator has provided a step-by-step infographic clients can use to assist with the process.

“While we continue to work closely with the ATO to streamline this process, we encourage you to continually refer to the [regulator’s] troubleshooting guidelines, which are being updated regularly,” the SMSF Association said.

The new procedures regarding SMSF tax agent nominations were implemented on 13 November 2023.

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