12/09/2007
Being a Legal Bookkeeper Today (September 2007)
As of today, and while being in the real world of working with any business, if a person is involved in any part of the processing or recording of business transactions in any manner then the restrictions and regulations DO APPLY and you must comply!
Why? Because when you record any business transaction an observation is being made about any GST applicable and a decision is being made about how to record that GST and therefore it is considered that every process has something to do with the numbers that end up on the BAS.
ICB does not believe that this means everyone must be regulated. We do believe you must be competent to do your part of the process and actively rely on experts for guidance when appropriate.
The Law: Today’s World
Q: What is regulated? A: BAS services! Refer: Subsection 251L(7)
– preparing or lodging an approved form about a taxpayer’s liabilities, obligations or entitlements under a BAS provision
– giving advice about the taxpayer’s obligations under a BAS provision, and
– transacting any business with the Commissioner on behalf of a taxpayer in relation to their obligations under a BAS provision.
Q: Who can provide BAS Services? A: “certain persons” Refer: Sn 251l(6)
These certain persons are:
– members of a recognised professional association, excluding student and retired members
– bookkeepers who are working under the direction of a registered tax agent
– entities that provide payroll services to employers (but only in relation to PAYG withholding amounts), and
– Licensed customs brokers (but only in relation to the application of an indirect tax law to imports and exports).
How can a bookkeeper be legal?
Ø Be working under the direction of a tax agent!
– Written agreement between the tax agent, the client and you
– States specifically what entity and what BAS’s that tax agent is “directing you”
– States the agreed process of review
– Refer sample in ICB member resources
Please note the importance of this system as transition into the current draft of legislation
If you cannot implement this system with the clients tax agent engage ABN’s BAS Wizard program refer www.icb.org.au/abn ICB recommend this system following review of many alternative “working under direction” solutions.
Ø Use ATO guidance on what you are allowed to do! www.ato.gov.au/bookkeepers current 09/07
· for guidance on ‘working under the direction of a registered tax agent’
· Norm - If a bookkeeper uses commercial accounting software – you’re ok – refer detail
· Barry - If a bookkeeper installs accounting software for a client that is able to produce a BAS like report – you’re ok – refer detail on the webite
· Beyond ordinary bookkeeping i.e. advising – you’re NOT ok
You may set up software including GST codes and the way the software will report those codes
You may use software and allocate those codes to transactions.
You may not interpret the law nor advise the business on HOW GST applies to them or HOW they meet their BAS obligations. Any such advice must be in conjunction with a tax agent!
ICB RECOMMENDS: Process transactions and implement accounting systems as Barry & Norm. Seek sign off from tax agents on any design (interpretation) of that system.
MOVING FORWARD: Increasingly work “under the direction of a tax agent” this will help transition you into any new system (when it happens)
Matthew Addison, Executive Director ICB
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