19/11/2008
LAW for BAS AGENTS to go to Ministers
The proposed law creating the registered BAS Agent has progressed and is progressing further.
Last Thursday 13th November 2 out of the 4 important documents were tabled in the House of Reps: the Tax Agent Services Bill 2008 & the Explanatory Memorandum. The Transitional Bill & the regulations were not tabled and are not public in a final form.
It may be that the bill will be passed by the House of Reps and therefore move into the Senate process. Our information is that the bill will not be presented through the senate until March next year.
We also understand that the Bill that has been tabled does put in place the legal ability for the new Tax Practitioners Board to be created and to commence the work required to implement the new systems.
At some point in the following 9 months (a period stipulated in the proposed law) the remaining documents will be tabled and those transitional provisions and the regulations which stipulate the real impact and behaviour over the next few years will also become known.
Shortly to be published: What we now know about the proposed system (vsn 3) from the Bill.
(Will include what we CANNOT KNOW until the rest of the documents are made known).
We believe that in general terms the proposed law is a very positive development for the bookkeeping industry and the registration & regulation of BAS Agents. We believe that if you are being relied on for your advice and your interpretation when you assist businesses in the understanding of their BAS (including GST) obligations then you do need to know what you are doing.
A system of registration requiring experience and proving knowledge is a positive step forward. ICB has created this for the bookkeeping industry in Australia through its levels of membership, knowledge based assessments, task based practical assessments and ongoing training. The implementation of the proposed law enforces this system.
However we are concerned that the regulators are not appreciating the extra cost that will be put onto the bookkeepers and therefore passed on as an added cost of compliance to small business. The EM includes comment that the cost to BAS agents will be $67 per year. We would guess that this means the cost of registration is to be $200 for each 3 years ($200/3 = $67). Regulators have failed to recognise the cost of insurance, the cost of education both initial and ongoing and the cost of infrastructure to be able to comply with all requirements now to be imposed on those becoming registered BAS Agents. $3000 per year is a better indication of costs and these costs will need to be passed on to the clients.
In the environment of financial services to business we have traditionally only recognised the role of accountants. The quantity of accountants continuing to be in public practice (i.e. being an accounting firm assisting multiple clients) is decreasing. 55% of registered tax agents are now aged over 60. The ability for accountants/tax agents in practice to assist clients with income tax matters let alone BAS & GST matters is decreasing. The 2007 income tax return lodgement programs for accountants became such an issue; so many applications for extensions to lodge tax returns were lodged that the ATO had to issue a blanket statement that accepted all applications. Accountants are swamped doing basic compliance work.
Bookkeepers assist business in their business process, their record keeping and the associated accounting process. This includes assisting businesses to keep their accounts which result in the numbers that are reported on various segments of the BAS forms. This became a more prominent necessity in Australia since the inception of the GST in 2000. Since GST, the role of the bookkeeper has finally been recognised. Bookkeepers do the books and should be in a positive working relationship with accountants to then enable the meeting of the income tax compliance obligations. Bookkeepers, and the future BAS Agents, typically do not want to be accountants nor do what accountants do. They do want to assist their clients in the best way possible.
In the world of fewer numbers of accountants, limited number of accountants prepared to embrace the use of computerised accounting programs and increasing compliance obligation, it is ESSENTIAL that this government recognises that implementing a system providing encouragement, education, time and support to bookkeepers to become engaged in the proposed BAS Agents regime is a far better answer. Please remember that a bookkeeper or accountant who is employed by the tax agent doesn’t need meet any of these obligations as this law cannot be applied to employees.
The paranoid concern of some who argue that every task has to be performed by someone with a formal qualification and PI insurance is not warranted
We are headed to a better world, it won't happen instantly.
Matthew Addison
Executive Director
The Institute of Certified Bookkeepers
19 November 2008
