The SMSF Association has joined with a number of industry bodies to push back on claims the tax advisory sector was properly consulted on changes to the code of conduct for tax agents, adding the lack of clarity around its deferral meant it was effectively in operation.
The joint bodies said while they had provided a submission during an initial round of consultation that ended in January 2024 on the draft version of the Tax Agent Services (Code of Professional Conduct) Determination, no further industry engagement has taken place since.
“It is incorrect for the Assistant Treasurer and Minister for Financial Services, the Honorable Stephen Jones MP, to say: ‘Tax practitioners and their professional associations were consulted throughout the development of the code as it was proposed, including in the weeks before the government’s announcement to introduce the new obligations,’” the bodies said in a joint statement.
“No further consultation or engagement after January was undertaken on the determination before it was registered on 2 July 2024 – six months later.
“Only after the determination was registered did the joint bodies become aware of a new notification obligation in paragraph 15(2)(c) – not previously in the exposure draft or subject to any consultation – which requires registered tax practitioners to report clients to the commissioner if they do not correct false or misleading statements within a reasonable time.”
Tax Practitioners Board (TPB) Tax Practitioner Governance and Standards Forum (TPGSF) co-chair Matthew Addison said on behalf of the joint bodies: “While the government consulted on the original exposure draft of the determination, substantial changes have been made without consultation and some of the concerns we raised with the exposure draft have been disregarded.”
The new notification obligation is one of two key issues of concern to the joint bodies, which also objected to an obligation for practitioners to notify current and prospective clients of ‘any’ matter that may influence their decision to have a practitioner provide tax agent services.
The bodies added there was no definition of ‘any’ matter provided and no guidance had been issued on it, and they were also critical of the open-ended nature of compliance that is to be applied during the deferral of the commencement date for the changes.
“The Assistant Treasurer has acknowledged a transitional period was always intended to ensure the behaviour of practitioners meets the new standards,” they said.
“In response to an open letter from the joint bodies to the Assistant Treasurer on 15 July 2024 requesting a deferral of the commencement of the determination, the Minister recently announced firms would have until either January or July 2025 (depending on their size) to meet their new obligations and enable the TPB to finalise its guidance.
“However, the transitional period is conditional upon an undefined concept of ‘[continuing] to take genuine steps towards compliance during this period’, adding to the uncertainty.
“Without clarity around the transitional period, every practitioner is facing a commencement date of 1 August 2024.”
The joint bodies are the Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, Financial Advice Association of Australia, Institute of Certified Bookkeepers, Institute of Financial Professionals Australia, Institute of Public Accountants, NTAA, SMSF Association and The Tax Institute, and they are external members of the TPGSF.
