Institute of Certified Bookkeepers

What can a BAS Agent do?

And what can they do about the things they can't do?

In the below we, ICB, have described how a bookkeeper and BAS agent must apply the law according to the law the way it is written and therefore should be applied. We, ICB, do not necessarily believe the law has been structured 100% correctly in relation to some of the below, nor has it, or the implementation of it, necessarily been a good reflection and implementation of an efficient business system to aid compliance by business with the intention of the law.

We continue to suggest to government that aspects of the law need to be changed.

However;

  • There remains a role for a bookkeeper who is not a registered agent.
  • There remains a role for a BAS agent who is not a tax agent.
  • There remains a role for a tax agent who is not a BAS agent.

Much has been said and the debate remains that it “seems strange” (that is the generous term) that someone who may qualify as a tax agent would not be able to qualify as a BAS agent, especially when being a registered Tax Agent permits you to do everything a BAS agent does. We, ICB, are comfortable that the tax agent and BAS agent primarily operate in different spheres with different roles in the application of different laws for business.

A tax agent has not, normally, studied the practical application and gained an understanding of how GST law applies to day to day business as this type of knowledge is not “normally” included in degree level courses.

It is not a fair comment to say that because someone has studied at degree level, which according to the education framework is above a Certificate IV level, means that they are more qualified. They may be qualified to a higher education level but that does not mean they have studied or gained knowledge in the same content.

If you wish to apply and advise on GST law to a business, then it is a requirement that you have competence in that law (TASA 30-10(7)). That competence may or may not be gained by any study, but the Certificate IV “BAS Agent Skill Set” units of; the Establishment and Maintenance of Payroll and the Preparation of Activity Statement, provide education in the actual application of GST law and PAYG Withholding law respectively, therefore they are a good requirement for someone who wishes to provide BAS services. The “strange” component of the law is that a tax agent will meet the education requirement for being a tax agent without having studied the content of the BAS agent skill set (i.e., not undertaken the education in the application of GST and PAYG W), yet is specifically allowed to provide those services.

Note

It is argued that no registered agent should be providing any service for which they are not “competent” to do so. So if they have no qualification, education, experience, skill in a tax or BAS service that they are permitted to do, then they should still refrain from providing such service under the TASA Code of Conduct.

We believe every professional bookkeeper, accountant, BAS agent, tax agent must be professional enough to act on the basis that; just because they are allowed to do something doesn’t mean they should. Every professional should only perform services they are competent to do (noting the restriction on services they are legally allowed to perform).

BAS agents should not provide tax services that they are not “licenced” to provide but more importantly that they have not had experience in, nor if they have not gained competence in, nor if they have not undergone “education” in. Tax services should be provided by those that are educated, experienced and competent in providing tax services. We, ICB, are “interested” in the future requirement for tax agents to have significant law subjects (3) included in their education requirement. For many tax agents who perform tax services for many individual clients it is an interesting position of education.

We, ICB are also interested in the ability for someone to become registered as a tax agent which also includes providing all BAS Services, by being a member of a Recognised Tax Agent Association and providing appropriate services for 8 in the last 10 years. I suppose the “test” requirement is that the 8 in 10 years of service has to be “relevant experience”. How is that going to be checked? But the override is “competence”. A registered agent (whomever that is) must be competent in the services they wish to provide. How does one test competence? How will the TPB check competence before an agent provides the service? The answer is that we expect they wont. It seems the only way to do so is wait for a complaint to come in and then assess whether they were competent to provide that service or not, did their behaviour demonstrate competence or an attempt to be competent.

We, ICB, are also interested in the tax agent requirements going forward are so high that some advisors who are experts in areas of tax will not necessarily meet the requirements of being a tax agent. We are not sure 8 in 10 should be their primary means of becoming registered, surely specific education and experience and expertise should be considered

ICB is about Bookkeepers, Bookkeeping and BAS Agents: Some Specifics

Bookkeepers can:

  • Process transactions
  • Operate a system
  • Even implement a system

They can't:

  • Design a system
  • Advise how the tax laws apply to a business

BAS agents can advise, ascertain (provide certainty) and represent a client to the commissioner on BAS services which means they can:

  • Design a system, in respect to business and the BAS provisions
  • Advise a business, in respect to business and the BAS provisions
  • Do everything a bookkeeper can do
  • Review reports to verify their accuracy for the correct application of BAS provisions (GST, WET, LCT, FTC, PAYG W, SGC, TPAR and the payment of PAYG I and the payment of FBT instalments)

They can't:

  • Advise, ascertain and represent a client to the commissioner in other tax matters
  • They cannot interpret the income tax provisions and advise a client how that is to apply to them (they can implement advice or a system prescribed by either the external tax agent or maybe the business themselves but not if the business “relies” on them for the advice and certainty

A BAS agent can be relied on for the advising, certainty and representing a client in relation to BAS provisions. A tax agent can be relied on for the advising, certainty and representing a client in relation to tax matters (which includes BAS provisions). A bookkeeper can operate the systems and provide reports.

Super Guarantee Law

A BAS agent can:

  • Advise in relation to the application of SGC to payroll and contractors
  • Advise which components of a remuneration package (pay) have SGC applied to it and which don’t
  • Determine and report the superannation guarantee shortfall amount and any associated administrative fees
  • Deal with superannuation payments made through a clearing house
  • Lodge and pay superannuation obligations including SGC Statement

A BAS agent can and should:

  • Ask the relevant questions
  • Advise the owner and the tax advisor what is being calculated and how
  • Gain authority from business owner to lodge SGC Statement with ATO

A BAS agent cannot:

  • Advise what the default fund for an employer can be
  • Advise in relation to the benefits of superannuation, the effect of contributions into superannuation or
  • Advise in any respect in terms of financial planning or the income tax consequences of superannuation or Superannuation Guarantee

A BAS agent may complete the calculations of SGC based on the system advised. A BAS agent may complete the forms for imposition of the SG Charge and based on the TPB's press release they have changed the law to allow BAS agents to be relied upon for the advice or certainty or in making representations / statements to the commissioner in relation to SGC. The legislative instrument is still on its way that gives legal authority to their announcement.

Employee / Contractor Decisions

A BAS agent cannot be the advisor in relation to the decisions of who is an employee and who is a contractor. It is not part of the PAYG Withholding divisions of the Act included in BAS services.

A BAS agent can and should:

  • Ask the relevant questions
  • Advise the owner and the tax advisor who is being treated as what
  • Seek instruction as to who is to be treated as an employee and a contractor
  • Provide general guidance papers, not as specific advice, that may raise issues
  • Apply the advice of the tax advisor / business manager about who is an employee
  • Apply PAYG Withholding law to the employees
  • Apply SGC law to contractors entitled to superannuation
  • Lodge a tax file number (TFN) declaration on behalf of a client

A BAS agent may complete the calculations of PAYG W and report them on the BAS. A BAS agent may complete the end of year payment summary forms for employees. A BAS agent can be relied upon for the advice or certainty or in making representations / statements to the commissioner in relation to PAYG W.

Taxable Payments Annual Report (TPAR)

A BAS agent can be the specific advisor and be relied upon, in relation to the decisions and implementation of the requirements around these reportable payments.

A BAS agent can and should:

  • Ask relevant questions of the business owner in order to validate correct suppliers being reported
  • Provide reports to the business owner
  • Prepare and lodge the TPAR
  • Gain authority from business owner before lodging with the ATO

A BAS agent can be relied upon for the advice or certainty or in making representations/ statements to the commissioner in relation to the TPAR. A BAS agent may perform the calculations and draft reports when we have the mechanisms to do so. A BAS agent can now also be relied upon for the advice or certainty or in making representations/ statements to the commissioner in relation to these reports. The same legislative instrument changes the law.

GST

Unless you are a registered agent you cannot be the specific advisor, that is relied on, in relation to the decisions and implementation of GST. The interpretation, certainty, representation of a client in relation to GST is a BAS agent service and a tax service.

A bookkeeper (who is not a registered agent) can process the system but cannot design, approve or review the system in a manner that the client is “relying” on the unregistered bookkeeper. The advice, design, review of GST and payroll is included as an area of BAS agent services.

An unregistered bookkeeper can and should:

  • Ask the relevant questions
  • Provide general guidance papers, not as specific advice, that may raise issues
  • Seek instruction as to the application of the law and how the system is to be applied
  • Assist in the preparation of the reports as requested

A bookkeeper can and should:

  • Apply the advice of the registered agent / business manager about the system
  • Assist in the implementation as requested

A bookkeeper may perform the calculations and draft reports. A bookkeeper cannot be relied upon for the advice or certainty or in making representations / statements to the commissioner in relation to the BAS or the payment summary reports.

A BAS agent can and should:

  • Ask the relevant questions
  • Provide general guidance papers
  • Provide specific advice as requested
  • Review and provide certainty and represent the client as requested

“Just because they are allowed to do something doesn’t mean they should”

Australian Business Register

A BAS agent can:

  • Apply to the Registrar for an Australian Business Number on behalf of a client
  • Updated: 13th July, 2016
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