Line 1 · Tax
Can a business consultant do my tax?
The Tax Practitioners Board is the body that registers tax agents and BAS agents, and it states the rule plainly: if you provide a tax agent service for a fee or other reward, you must be registered with the Tax Practitioners Board. The Board also sets out a legal requirement that you must not charge or receive a fee or other reward if you provide a service which you know or should reasonably know is a tax agent service and you are not a registered tax agent. Lawyers preparing or lodging tax returns are caught too: the same page says they must register as well.
This guide answers three questions: what a consultant can properly do around tax without registration, what only a registered agent may do, and where to check who is registered. It does not decide whether your own arrangement crosses the line; the Tax Practitioners Board decides that, and its register is where a business checks an adviser before handing over records.
Any adviser
Licensed, registered, or a director
- 1 TaxApplies tax law to your own circumstances, and you rely on it, for a feeTax agent or BAS agent, registered with the Tax Practitioners Board
- 2 Financial productsRecommends which financial product to buy: shares, super and insurance among themAFS licensee, or an authorised representative of one
- 3 CreditSuggests or assists with a specific contract from a specific credit providerCredit licensee, or a credit representative of one
- 4 Legal workAdvises on, or drafts, the terms of a contractAustralian legal practitioner, holding a current practising certificate
- 5 The companyThe directors are accustomed to act in accordance with the adviser’s instructions or wishesA director in law, with no appointment needed
General information about how Australian law treats business advice. It is not tax, financial or legal advice. Check an adviser on the official register, where a line names one.
What the tax agent service test asks
One element is reliance: the service is provided in circumstances where the client can reasonably be expected to rely on it to satisfy liabilities or obligations and/or to claim entitlements that arise, or could arise, under a taxation law.
The other element is application. The Board says whether a client can reasonably rely on a service will depend on the situation. Some factors to consider include: whether you have applied your knowledge of a taxation law to a client’s individual circumstances.
Registration attaches to the fee. The Board’s page on tax agent services says that if you provide a tax agent service for a fee or other reward, you must be registered with the Tax Practitioners Board; its factsheet puts the same rule as a legal requirement on charging or receiving a fee or other reward for a service you know or should reasonably know is a tax agent service while you are not a registered tax agent.
Three pieces of work, and the element each turns on
The same test, laid against three ordinary pieces of work. The Board’s own words sit beside each one; which element is decisive in any particular engagement is a question the Board answers, and its complaint route is open to anyone dealing with an unregistered provider.
| A consultant might do this | Where the test turns, in the Tax Practitioners Board’s words |
|---|---|
| A cash-flow plan for the year ahead | Reliance: the service is provided in circumstances where the client can reasonably be expected to rely on it to satisfy liabilities or obligations and/or to claim entitlements that arise, or could arise, under a taxation law. |
| “You can claim this one” | Application: some factors to consider include whether you have applied your knowledge of a taxation law to a client’s individual circumstances. The Board adds that whether a client can reasonably rely on a service will depend on the situation. |
| Lodging the BAS | Registration and the fee: tax practitioners include tax agents and BAS agents, and they must be registered with the Board to provide tax agent services, BAS services or in some cases, tax (financial) advice services for a fee or other reward. |
Who may charge a fee for it
Tax practitioners include tax agents and BAS agents, and they must be registered with the Board to provide tax agent services, BAS services or in some cases, tax (financial) advice services for a fee or other reward.
The registration requirements are not part of the definition of tax agent services. The Board says they are set out in section 50-5 of the Tax Agent Services Act 2009, and that the definition itself sits in section 90-5 of that Act.
What the registration brings: the Board protects consumers of tax agent services by registering and regulating tax practitioners, so they meet the appropriate standards of professional and ethical conduct. Using a registered tax practitioner means they are required to comply with the Code of Professional Conduct (Code), which regulates the personal and professional conduct of registered tax practitioners.
What getting it wrong costs
The Board lists the risks of using an unregistered preparer. Listed below are some risks that you face if you use an unregistered preparer to provide you with a tax agent service (which includes a BAS or tax (financial) advice service): the unregistered preparer may not be fit and proper or have the required qualifications or experience to provide you with a competent service that meets appropriate professional and ethical standards, and may not have appropriate professional indemnity insurance cover to compensate you if you suffer loss due to an act, error or omission that results from a service they provide.
Then the penalties. If the unregistered preparer fails to lodge a tax return or statement on your behalf by the required due date or makes a false or misleading statement to the ATO (for example, by lodging an incorrect return or BAS), and this results in a tax shortfall amount, the ATO may impose administrative penalties on you.
The counterweight is the ATO’s safe harbour. Under the ‘safe harbour’ provisions administered by the ATO, you will not be liable for penalties in certain circumstances, if you engage a registered tax practitioner; but you will not be entitled to any ‘safe harbour’ protection if you engage an unregistered preparer.
One risk is about your account, not your return. The Board warns that sharing your information (such as your myGov password) with an unregistered preparer puts your personal and financial affairs at risk. It also notes that a registered tax practitioner does not require access to their client’s myGov account to act on their behalf.
Where to check an agent
The Board’s own instruction is to check the TPB Register or look for the Registered tax practitioner symbol to ensure your tax practitioner is registered.
Before handing over records, use the register, and keep the complaint route in mind: you can make a complaint to the Board about anyone advertising or providing tax agent, BAS or tax (financial) advice services for a fee who is unregistered.