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The TPB has answered practitioners’ frequently asked questions about the controversial changes and has said they can expect draft guidance in September.
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‘Many’ practitioners already compliant with new code rules: TPB
23 July 2024
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The TPB has downplayed practitioners’ concerns over controversial changes to the tax agent code of conduct and insists “many tax practitioners will already be complying with the new requirements”.
In a web page containing 13 frequently asked questions last week, the TPB has offered practitioners several tips for compliance and laid out its consultation timeline with less than two weeks until new code obligations are set to take effect.
It reiterated its promise to take a "pragmatic approach" to implementing the obligations and said its “immediate focus” would be finalising guidance and educating practitioners.
“We will take a pragmatic approach to transition and implementation – providing education and support for those tax practitioners genuinely trying to do the right thing," the board said.
This included allowing "a reasonable time for you to understand your obligations, assess your own practice and implement changes, if required, to comply with the new obligations”.
It comes as the TPB and government face calls from the opposition and industry advocates for the legislative instrument that introduced the changes to be withdrawn and its August 1 start date to be pushed back.
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But the TPB said “many tax practitioners will already be complying with the new requirements”, in response to the question “how can tax practitioners comply with the new obligations by 1 August 2024?”
“The eight additional obligations are consistent with the existing principles of the code, including honesty and integrity, independence, confidentiality and competence.”
It said practitioners could also take several steps to ready themselves, including reading the explanatory statement to the determination issued by Assistant Treasurer Stephen Jones, which “will help you better understand the new obligations”.
Practitioners could refer to existing guidance from other bodies, such as the Accounting Professional & Ethical Standards Board, since the additional obligations “also leverage material from the work of other existing bodies”.
Other elements of the code built on well-known and understood tax and corporate law concepts on which tax practitioners would be regularly advising clients, it said.
The TPB said it had already begun to consult with professional bodies and expected draft guidance to be released in early September.
The consultation process would include the public release of all draft guidance documents, with feedback periods of four to six weeks.
Guidance would address all the new requirements and “seek to assist tax practitioners to understand your obligations under the determination and how we intend to implement and transition the new requirements”.
It would also discuss how specific code items applied to tax practitioners “on the ground”.
Meanwhile, a series of webinars would be conducted “to explain the new requirements and to consult on our draft guidance”, with the first scheduled for 7 August, one week after the rules’ start date.
The TPB said its approach to guidance would not differentiate between small practices and large firms but how practitioners met their obligations would “need to be assessed against a number of factors, including the tax practitioner’s business model, the nature and size of your client base and the type of tax services provided”.
“We recognise small practices operate differently to large firms,” it said. “How a tax practitioner meets the existing and new requirements has always and will always need to be determined on a case-by-case basis, having regard to individual circumstances.”
For the obligation to disclose all relevant matters that could influence the client’s decision to engage them, the TPB said it would provide examples of matters unrelated to a practitioner’s ability to provide tax agent services and therefore would not require disclosure.
“For example, physical and mental health issues that are irrelevant to providing tax agent services and personal, religious or political beliefs,” it said.
It added that the determination’s explanatory statement provided suggested matters that would require disclosure, including TPB sanctions and any charge or conviction relating to an offence relating to fraud or dishonesty or a tax offence.
Speculation that the new obligation to ensure tax agent services provided on a practitioner’s behalf were provided competently required staff to have formal training was also “not necessarily” true.
“The new obligations do not specify … formal training and on-the-job training will continue to be something a tax practitioner will consider in relation to each employee and each service an employee is authorised to perform.”
The TPB also allayed fears about potential conflicts with existing obligations, particularly around client confidentiality.
“The new obligations complement and do not conflict with the existing code obligations.”
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