Tax agents who handle only a few SMSFs each year should consider if they have the skills and experience to continue doing so, while keeping in mind the ATO is examining the ability and performance of practitioners operating in the sector.
Deloitte national SMSF leader Liz Westover said while there has been a focus on the action of auditors in regards to SMSFs, given 22 per cent do less than five audits per year, or 0.3 per cent of all audits, similar scrutiny from the ATO is likely on tax agents who also work with low numbers of funds.
“About 99 per cent of SMSFs use a tax agent to lodge their annual return, but the average number of clients per agent is 31 and the median number of clients is nine,” Westover said in a recent webinar hosted by The Auditors Institute.
“So we’ve got similar sorts of issues in some respect as to whether or not tax agents doing these low numbers should necessarily be doing it.”
She noted ATO statistics highlight that 67 per cent of tax agents who lodged SMSF annual returns lodged less than 20, while 0.3 per cent of agents who lodged SMSF annual returns lodged more than 500.
As such, she said tax agents doing low numbers of SMSF returns had to ensure they were able to understand and sign off on them.
“We’ve got professional obligations to make sure that we are experienced and knowledgeable in what we sign off on as tax agents and if you are not, then you should not be signing off on these types of entities,” she said.
“We all have professional obligations that absolutely need to be taken seriously and the ATO has made it very well known they do hold professionals to a higher standard.”
She did, however, question whether the ATO figures factored in the use of tax agent numbers because unlike auditors, who operate using a single SMSF auditor number, tax agents could use more than one number within a firm depending on the work completed.
“What I do find interesting about some of these statistics is how accurate they actually are,” she said.
“For example, where you have a personal tax agent registration you might be signing off under the tax agent number for your firm and then the firm can have potentially multiple tax agent numbers.
“So where someone is reported as a tax agent and there is a low number in a band, it might be higher than that because you’re signing under a number of different tax agent numbers.”
