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The Administrative Appeals Tribunal has upheld a decision by the Tax Practitioners Board to terminate a tax agent’s registration relating to the non-payment of superannuation guarantee charge payments and liabilities.
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AAT affirms TPB’s termination of tax agent registration
30 April 2019
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In the case of Hill and Tax Practitioners Board (Taxation) [2019], the Administrative Appeals Tribunal (AAT) has rejected an application to reverse the Tax Practitioners Board’s (TPB) decision to terminate the registration of a tax agent.
The case involved Mr Hill, a chartered accountant and director of around 14 private companies.
Following an investigation that began towards the end of September 2018, the TPB decided to terminate Mr Hill’s tax agent registration, according to the court documents.
The board also determined that Mr Hill could not apply for re-registration for a five-year period thereafter. The board notified Mr Hill of its decision on 24 January 2019.
The TPB came to the decision based on its findings that Mr Hill had failed to comply with the TASA Code of Professional Conduct obligations to act honestly and to comply with taxation laws in the conduct of his personal affairs.
The specific aspects of the TPB’s findings were that by failing to disclose various overdue tax obligations, Mr Hill had made false and misleading statements to the TPB relating to his personal taxation affairs in his 31 March 2016 registration renewal application, his 11 May 2017 and 8 May 2018 annual declarations, DFK Richard Hill Pty Ltd’s 24 July 2017 and 1 August 2018 annual declarations and Forte Financial Pty Ltd’s 5 October 2018 annual declaration.
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The TPB also found that he had been personally culpable in his role as a director or tax agent in the failure of various entities to comply with taxation laws in relation to timely lodgement of income tax returns and business activity statements.
It also found that he had been personally culpable in his role as a director and tax agent in the non-remission of and non-payment relating to superannuation guarantee charge payments and liabilities across three entities.
The TPB said that it also discovered that he had failed to make PAYG instalments by RHA Associates Pty Ltd and had failed to pay to the Commissioner of Taxation a 13 August 2013 default judgment debt of $319,737.
In his defence, Mr Hill stated that the lodgement and payment defaults identified by the board did not relate to his obligations as an individual taxpayer, and that as an individual, he had never had substantial overdue tax obligations.
He also claimed that while the annual declaration that was submitted for the company DFK Richard Hill Pty Ltd was incorrect in asserting there were no outstanding taxation obligations, he had relied on information provided by his then co-director when completing it.
Mr Hill also stated that the non-remittances identified by the TPB relating to superannuation guarantee charge amounts were not his “personal tax obligations”.
The AAT determined that despite the absence of any client complaint against Mr Hill, based on the information available, it would not be appropriate to overturn the board’s decision to terminate Mr Hill’s registration as a tax agent.
“Mr Hill’s apprehensions about the potential impact on him and his practice, if the decision continues to operate, are not sufficiently substantiated to lead me to satisfaction that it is appropriate to stay either of the board’s decisions,” stated AAT senior member Peter Taylor in his decision.
“I entertain real doubt as to whether the shortcomings identified by the board can be accurately characterised as matters of inadvertence or misunderstanding.
“The apparent long-standing overdue taxation payments, primarily of Mr Hill, as an individual, and of corporate entities which it seems likely he controlled, either alone or with his wife, and the apparent nature of some components of those debts, raise a real question of Mr Hill’s underlying fitness for continuing registration.”
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