Institute of Certified Bookkeepers

What is the TASA (BAS Agent) legislation?

What is the TASA (BAS Agent) legislation?

The tax agent services legislative package consists of the:

The TPb provides reference to all relevant legislation at  tpb.gov.au

When did the legislation take effect?

The Tax Agent Services Bill 2008 was introduced into Parliament on 13 November 2008 and Royal Assent was given to the TASA 2009 on 26 March 2009.

Some of the provisions of the legislation, specifically those relating to the establishment of the Tax Practitioners Board and appointment of the chair and board members, commenced on 26 March 2009 when Royal Assent was given to the TASA 2009. The remaining provisions of the legislation commenced 1st March 2010.

When was the Tax Practitioners Board established?

The first Board was appointed to commence in December 2009 with the legislation commencing its regime on the 1 March 2010. The second Board was appointed in early 2013.  Treasury has conducted a process for the appointment of new members to the Board to commence in late 2017 due to the rotation of two existing members off the board.

Mr Dale Boucher was the Chair of the Board for the first term.

Mr Ian Taylor is the current Chair and has been appointed until mid 2019.

What are the regulations?

The TAS Regulations 2009.

They are available on the legislation.gov.au website

The Regulations outline the:

  • prescribed qualifications and relevant work experience requirements for registration as a tax agent or business activity statement (BAS) agent
  • application fees for registration as a tax agent or BAS agent
  • prescribed requirements for recognition as a recognised professional association (RPA) and recognised BAS agent association
  • allowances and expenses payable to those required to attend an investigation of the Tax Practitioners Board
  • administrative assistance to be provided to the board
  • information that the board must maintain on the register of registered and deregistered tax agents and BAS agents

About BAS Agents

What is a BAS agent?

Under the new legislation, a BAS agent is a person or entity registered under the TASA 2009 to provide a BAS service (see section 90-1 of the TASA 2009).

What is a BAS service?

Under the TASA 2009, a BAS service is a tax agent service that:

  • relates to ascertaining or advising an entity about the liabilities, obligations or entitlements of the entity, or another entity, that arise, or could arise, under a BAS provision
  • relates to representing an entity in dealings with the Commissioner in relation to a BAS provision
  • is provided in circumstances where the entity can reasonably be expected to rely on the service for the purpose of satisfying liabilities or obligations that arise, or could arise, under a BAS provision, or to claim entitlements that arise, or could arise, under a BAS provision

A BAS service therefore includes, but is not limited to:

  • preparing or lodging an approved form about a taxpayer’s liabilities, obligations or entitlements under a BAS provision
  • giving a taxpayer advice about a BAS provision that the taxpayer can reasonably be expected to rely upon to satisfy their obligations
  • dealing with the Commissioner on behalf of a taxpayer in relation to a BAS provision

See section 90-10 of the TASA 2009.

What is a BAS provision?

BAS provisions include:

  • GST law
  • wine equalisation tax law
  • luxury car tax law
  • pay as you go (PAYG) instalments
  • PAYG withholding
  • fuel tax law
  • fringe benefits tax instalments (relating to collection and recovery only)

See section 995-1 of the Income Tax Assessment Act (ITAA) 1997.

Registration of BAS Agents

Who can be registered as a BAS agent?

The new legislation makes provision for the following to be registered as BAS agents:

  • individuals (including those in the capacity of a trustee of a trust)
  • partnerships
  • companies (including those in the capacity of trustee of a trust)
When can I apply to register as a BAS agent?

You are able to register with the TPB by completing an online form and providing additional information.

Application Form

An entity being a partnership or company can register to be a BAS Agent however that entity must have an individual who is a Registered BAS Agent in their own right.

Therefore you may require two registrations.

An entity is then the service provider "in business" and the individual who works for that entity is "not in business"

An individual must meet the registration requirements

- Cert IV Bookkeeping or Accounting

- 1400 hours Relevant Experience (reduced to 1000 hours if a member of ICB (or other professional association))

- If "in business" the entity or Individual must have Professional Indemnity Insurance

- Over 18 years of age and be a fit and proper person

How do I register as a BAS agent?

Complete the online application form on the TPB website

TPB Website - BAS Agent Registration

What is the cost of BAS agent registration?

The TASA Regulations 2009 include fees of:

  • $100 - for registration as a BAS agent who carries on a business
  • $50 - for registration as a BAS agent who d"s not carry on a business as a BAS agent

See Part 2, item 9 of the draft TAS Regulations 2009.

A registered BAS Agent must also have Professional Indemnity Insurance which will be at additional cost which must be obtained by the applicant independantly within 14 days of having an application approved, or before.

ICB have arranged a PII policy designed for Bookkeepers and BAS Agents with IME

Do I need an Australian business number (ABN) to register as a BAS agent?

The TASA 2009 does not require you to have an ABN to be eligible for registration as a BAS agent.

There are however other tax law and administrative considerations which may make holding an ABN relevant to your circumstances. You should seek independent advice.

For a BAS Agent to be "in business" providing services to other businesses, you will require an ABN due to other legal requirements.

Eligibility Requirements

What are the requirements for registration as a BAS agent under the legislation?

An individual aged 18 years or more is eligible for registration as a registered BAS agent if the Tax Practitioners Board is satisfied that the individual:

  • is a fit and proper person
  • meets the requirements prescribed by the regulations including requirements relating to qualifications and experience

A partnership is eligible for registration if the board is satisfied that:

  • each partner who is an individual is:
    • aged 18 years or more
    • a fit and proper person
  • if a company is a partner:
    • each director of the company is a fit and proper person
    • the company is not under external administration
    • the company has not been convicted of a serious taxation offence or an offence involving fraud or dishonesty during the previous five years
  • the partnership has a sufficient number of individuals, being registered tax agents or BAS agents, to provide BAS services to a competent standard and to carry out supervisory arrangements

A company is eligible for registration if the board is satisfied that:

  • each director of the company is a fit and proper person
  • the company is not under external administration
  • the company has not been convicted of a serious taxation offence or an offence involving fraud or dishonesty during the previous five years
  • the company has a sufficient number of individuals, being registered tax agents or BAS agents, to provide BAS services to a competent standard and to carry out supervisory arrangements

Transitional arrangements were available in the first 5 years of the legislation but are no longer relevant for BAS Agents and Tax Agents.

See section 20-5 of the TASA 2009.

What is fit and proper?

To be eligible for registration under the legislation, the Tax Practitioners Board must be satisfied that an applicant is a fit and proper person. The fit and proper person requirement applies to individuals, each individual partner (for partnerships) and each director of a company (for partnerships/companies).

In deciding whether an individual is a fit and proper person, the board must have regard to whether:

  • the individual is of good fame, integrity and character
  • an event affecting the individual’s continued registration happened to the individual in the past five years
  • the individual had the status of an undischarged bankrupt at any time during the previous five years
  • the individual had served a term of imprisonment, in whole or in part, at any time during the previous five years

An event affecting an entity’s continued registration occurs if the entity:

  • is convicted of a serious taxation offence
  • is convicted of an offence involving fraud or dishonesty
  • is penalised for being a promoter of a tax exploitation scheme (under subsection 290-50(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953))
  • is penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling (under subsection 290-50(2) of Schedule 1 to the TAA 1953)
  • becomes an undischarged bankrupt or goes into external administration (as defined in the Corporations Act 2001)
  • is sentenced to a term of imprisonment

See sections 20-5, 20-15 and 20-45 of the TASA 2009 and Chapter 2, paragraph 2.45 explanatory memorandum to the TASA 2009.

What are the qualification and experience requirements for BAS agents under the legislation?

To be eligible for registration as a BAS agent, an individual must meet one of the following requirements prescribed in Schedule 2, Part 2 of the TASA Regulations 2009:

  • accounting qualifications
  • membership of a recognised professional association - with the defined "Voting Membership" requirements

Although these appear as alternative pathways we note that the accounting qualifications are a necessary component of being a "voting member" of the Recognised Professional Association.  Therefore to be a BAS Agent you MUST have the Cert IV qualification or greater but also must have the BAS Agent skill set (the designated Payroll Unit and the designated Activity Statement Unit)

Eligibility requirements for BAS agents

RequirementsDescription
Accounting qualifications (Schedule 2, Part 2, Division 1, item 201)
  • Individual has been awarded at least a Certificate IV Financial Services (Accounting), or a Certificate IV Financial Services (Bookkeeping) from:
    • a registered training organisation
    • an equivalent institution
    that required the successful completion of a course in basic GST/BAS taxation principles.
  • Including the BAS Agent Skill Set being the Activity Statement Unit and the Payroll Unit
  • Has undertaken at least 1,400 hours of relevant experience in the preceding three years.
Membership of professional association - RPA (Schedule 2, Part 2, Division 1, item 202)
  • Individual is a voting member of an RPA. (Which requires the same accounting qualifications)
  • Has undertaken at least 1,000 hours of relevant experience in the preceding three years.
Membership of professional association - recognised BAS agent association(Schedule 2, Part 2, Division 1, item 203)
  • Individual is a voting member of a recognised BAS agent association. (Which requires the same accounting qualfications)
  • Has undertaken at least 1,000 hours of relevant experience in the preceding three years.

Transitional arrangements for BAS Agents ceased in 2015.

What does relevant experience for BAS agents mean?

Relevant experience means work by an individual:

  • as a tax agent or BAS agent registered under the TASA 2009
  • as a tax agent registered under Part VIIA of the ITAA 1936
  • under the supervision and control of a tax agent or BAS agent registered under the TASA 2009
  • under the supervision and control of a tax agent registered under Part VIIA of the ITAA 1936
  • of a kind approved by the Tax Practitioners Board

in the course of which the individual’s work has included substantial involvement in one or more types of BAS services.

Work by an individual of a kind approved by the board’ will be a matter for the board to determine once established.

See Schedule 2, Part 2, Division 2, item 204 of draft TAS Regulations 2009.

What does a sufficient number of individuals for partnerships and companies mean?

There is no set formula for determining the number of registered individuals that a company or partnership is required to have to satisfy this requirement. The Tax Practitioners Board may provide further guidance on adequate staffing and supervision from time to time.

In providing such guidance, the board may take into account factors that may include, but are not limited to the:

  • size of the business
  • services being offered
  • conditions that may be imposed on the entity’s registration
  • supervisory arrangements in place

Under subsection 50-30 (2) of the TASA 2009, a civil penalty may apply if:

  • you are a registered tax agent or BAS agent who is an individual
  • you sign a declaration or other statement in relation to a taxpayer that is required or permitted by a BAS provision
  • the document in relation to which the declaration or other statement is being made was prepared by an entity other than:
    • you
    • a registered tax agent or BAS agent who is an individual
    • an individual who is working under your supervision and control or the supervision and control of another registered tax agent or BAS agent who is an individual

Subsection 50-30 (4) of the TASA 2009 provides for civil penalties for BAS agent partnerships and companies which similarly contravene.

What is a recognised BAS Agent association?

A recognised BAS agent association is an organisation that:

  • applies to the Tax Practitioners Board for recognition in accordance with the TASA Regulations 2009 (see Part 1, item 4)
  • the board decides to recognise in accordance with the Regulations (see Schedule 1, Part 2 which sets out the requirements for a recognised BAS agent association)

There are a number of recognised professional associations.  ICB has been registered since 2010

for a complete list refer to the TPB Website

See Part 1, item 4, and Schedule 1, Part 2 of the TASA Regulations 2009.

What is a recognised professional association?

A recognised professional association is an organisation that:

  • applies to the Tax Practitioners Board for recognition in accordance with the TASA Regulations 2009 (see Part 1, item 5)
  • the board decides to recognise in accordance with the regulations (see Schedule 1, Part 1 which sets out the requirements for a recognised professional association)

See Part 1, item 5, and Schedule 1, Part 1 of the TASA Regulations 2009.

Do you need to be a member of a professional association to be registered?

There is no requirement that an individual applying for BAS agent registration must be a member of an RPA.

An individual who is not a member of an RPA or a recognised BAS agent association may still apply for registration provided they meet the registration criteria in the legislation.

The Institute of Certified Bookkeepers is a Recognised Professional Association with the Tax Practitioners Board under the legislation.

What courses are available to satisfy the registration requirements?

The prescribed academic qualifications required to satisfy the criteria for registration are

- Certificate IV in Accounting or Bookkeeping

including

- The BAS Agent Skill Set which is:

  • Carry out business Activity and instalment activity Statement tasks
  • Establish and Maintain a Payroll System

- a Board approved Course in GST/BAS Taxation principles

- a component of the course must achieve the requirement for you to study "knowledge of the TASA, including the Code"

 

Can the board impose conditions on the registration of a BAS agent?

Transitional Arrangements

Will there be transitional arrangements for registration of BAS agents?

Yes but no. The transitional arrangements for registration for BAS agents were included in the Transitional Act, which was introduced to Parliament on 24 June 2009.

The Transitional period for BAS Agents completed in 2015.

What were the transitional arrangements for BAS agent registration?

During the transitional period there were three ways in which a BAS agent may become registered. These are:

  • applying for BAS agent registration under the TASA 2009
  • notifying the Tax Practitioners Board under the Transitional Act
  • applying for BAS agent registration under the Transitional Act

See Transitional arrangements for BAS agents for further explanation.

Transitional arrangements for BAS agents

RequirementsDescription
Applying for BAS agent registration under TASA 2009 (section 20-5 TASA 2009)
  • Although not strictly a transitional arrangement, it is important to note that if an applicant meets the criteria for registration as a BAS agent under section 20-5 of the TASA 2009, including the requirements prescribed by the draft TAS Regulations 2009 relating to qualifications and experience, they may, from the date of commencement of the new legislation, apply for BAS agent registration.
Notifying the board under Transitional Bill (Schedule 2, Part 2, section 5 of Transitional Bill)
  • Under this transitional arrangement, an entity that notifies the board within the prescribed time that the entity meets certain conditions, will be taken to be registered for a two year period beginning immediately after commencement.

Who does this apply to?

  • an individual that was, immediately before commencement, providing a BAS service under the old law, that is they were a person referred to in section 251L(6) of the ITAA 1936 and were providing BAS services within the meaning of section 251L(7) of the ITAA 1936 or
  • an entity that was, immediately before commencement, providing a BAS service (as defined under TASA 2009) other than a BAS service under old law [DM1]

What is an entity required to do for this to apply?

  • If this transitional arrangement applies to an entity, that entity has six months from date of commencement to notify the board, in the approved form, that this transitional arrangement applies to the entity.

What is the effect of this transitional arrangement?

  • The entity does not have to meet the registration requirements and is taken to be registered for a two year period beginning immediately after commencement.
Applying for BAS agent registration under Transitional Bill (Schedule 2, Part 3, section 14 of Transitional Bill)
  • Under this transitional arrangement, an entity that applies for registration under the new law, within the prescribed time, and meets certain conditions, will be eligible for registration under the new law without having to satisfy certain registration requirements.

Who does this apply to?

  • An entity that has been providing BAS services to a competent standard for a reasonable period before an application is made.

What is an entity required to do for this to apply?

  • An entity must apply for registration under the new law within three years from the date of commencement for this transitional arrangement to apply.

What is the effect of this transitional arrangement?

  • The entity and associated individuals, in the case of partnership and company entities, must still satisfy the fit and proper person requirements prescribed under the TASA 2009
  • The entity is not required to satisfy the registration requirements relating to:
    • in the case of an individual - the requirements prescribed by the TAS Regulations 2009, including, but not limited to, requirements relating to qualifications and experience, or
    • in the case of a company or partnership - the requirement that the partnership or company has a sufficient number of registered individuals to provide BAS services and carry out supervisory arrangements
  • If registered, the entity’s registration will continue for a period of at least three years

This table is based upon the draft Transitional Bill.

Note: Where an entity notifies the board under the Transitional Bill and subsequently applies to register as a BAS agent under the Transitional Bill, the board can determine a period of registration in relation to the application of at least 12 months, rather than at least three years. The intention is that BAS agents do not remain registered for five years without satisfying the registration requirements concerning proper qualifications (see Schedule 2, Part 3, section 14(2)).

In relation to (i) - (iii) above, the board may impose conditions on these registrations and may require the registered entity to maintain professional indemnity insurance. These entities will be subject to the provisions of the TASA 2009, except where otherwise provided by the Transitional Bill, including the code of professional conduct and civil penalty provisions.

Are you providing BAS services within the meaning of section 251L of the ITAA 1936?

The transitional arrangement outlined in (ii) of the "Transitional arrangements for BAS agents" provides that an individual who was, immediately before commencement, providing a BAS service under the old law (that is, they were a person referred to in section 251L (6) of the ITAA 1936 and were providing BAS services within the meaning of section 251L (7) of the ITAA 1936) will be taken to be registered for two years if that individual notifies the Tax Practitioners Board that they fulfil this requirement.

In addition, the transitional arrangement outlined in (iii) of the "Transitional arrangements for BAS agents" applies to an entity that has been providing BAS services to a competent standard for a reasonable period before an application is made. It is considered that if an entity was providing these services in contravention of section 251L of the ITAA 1936 (that is, they were not a person referred to in section 251L (6) of the ITAA 1936 and were providing BAS services within the meaning of section 251L (7) of the ITAA 1936) then the Tax Practitioners Board would need to consider whether the fit and proper requirement for registration could be met.

While the board is not responsible for administering the current law under the ITAA 1936, the Tax Office website provides a self assessment tool to help individuals establish whether they qualify as a provider of a BAS service for a fee in accordance with sections 251L (6)(a) and 251L(6)(b) of the ITAA 1936.

What types of experience can you use to become registered?

Relevant experience is work that you perform for a client or employer that leads up to and relates to the provision of BAS services. However the ‘relevant experience’ must include substantial involvement in BAS services.

This means that the work includes calculation or consideration of a BAS provision. Most work in preparing the books and records of a business for the purposes of that business completing their BAS obligations, including their payroll obligations, would be.

How do I obtain a list of outstanding BAS's?

Best Practice for BAS Agents - List of all clients outstanding Activity Statements

  • Obtain from the ATO a list of all Activity Statements that they have on your to-do list
  • Lodgement status reports – BAS Agent Portal

How can the reports be accessed?

To access the reports, select Reports from the left hand navigation bar in the Portal and then select On-demand reports.

These reports will normally be available within a couple of hours from the time of your request, but larger report requests will be processed overnight. The report is available when the report status shows ‘download’.

You will then need to go back into the portal and you will be able to download, and save, these reports and work with them using common spreadsheet applications.

Then:

  • Check that all your clients that you expect are on your list
  • Check for prior period BAS’s outstanding
  • Check that you plan and make contact with all clients to achieve the lodgement deadlines

Remember, if they lodge the return they must do so within 4 weeks. If you lodge it electronically then you have 8 weeks. Also remember that if you lodge it you are probably deemed to be “Making a statement” that you need to “take reasonable care” to ensure it is correct.

Individual Trustee of a trust - how to register?

BAS Agent Registration Issues

Q: The trustee of the trust which is my bookkeeping/BAS Agent business is an individual (not me). How can it legally provide BAS Services?

A: In order for the trust held business to legally provide BAS Services it must register with the TPB. In order for it to register it canot have an individual as its trustee unless that individual does qualify as a BAS Agent in their own right.

Q: I am a registered BAS Agent personally working for the above trust. Does that help?

A: That means that you personally can provide BAS Services to the clients of the trust as a known third party provider. The TPB have issued an Exposure Draft information sheet titled “Reports or other advice incorporating tax agent services provided by a third party” which can be found here.

However the TPB draft paper requires you to be identified specifically as the provider of those services and all reports or information provided to the client in relation to the BAS Services, while it might be from the Trust, it must also now refer to you specifically. Quoting your BAS Agent Number, while not required, would be easily understood and therefore an advisable method of ensuring nobody misunderstood who or what was providing the services.

A good structure and scenario for a BAS Agent business conducted by a trust is:

  • Have a company as trustee of the trust
  • The Trust has its own ABN
  • The company becomes a registered BAS Agent in its own right
  • You personally are the responsible individual supervising the provision of BAS Services by that entity
  • You personally retain your BAS Agent status
  • It is the company and its ABN and its BAN that are know to the clients and used for lodgements
  • The Company has BAS Agent portal access using its own AUSkey
Contractors within a BAS Agent business - Do they need to register?

TPB provides a view on whether contractors must be registered - According to the TPB (TPB Information sheet 13/2012)

We have extracted the key information clauses. The full information sheet is available here.

Circumstances where a contractor does not need to register as a tax agent or BAS agent

The contractor provides services for a registered agent as an employee (including as someone who the law regards as an employee, despite describing oneself as an independent contractor), and the registered agent receives the fee or other reward for the provision of the services.

The obligations of the contractor are to procure tax-related advice from a registered tax agent or BAS agent and that registered agent will be responsible to the client in relation to that advice.

Circumstances where a contractor may need to register as a tax agent or BAS agent

The contractor provides services to a client or to a registered tax agent or BAS agent for a fee or other reward, and the client or registered agent relies on the service. The Board considers that a contractor who provides services to a client or to a registered tax agent or BAS agent, and receives a fee or other reward for the service (other than a salary or similar payment) is providing services in their own right. In this case, if the services provided fall within the definition of ‘tax agent service’, and if the client or registered agent relies on the service, the contractor most likely will need to be registered.

The contractor provides services through a registered agent. The Board considers that a contractor who provides services to a client, for a fee or other reward, through a registered tax agent or BAS agent will be required to register if the service provided falls within the definition of ‘tax agent service’, and the client relies on the service. It does not matter whether the registered agent also receives a fee or other reward in relation to the service provided. A common example is where a contractor lodges a Business Activity Statement (BAS) for a client through a registered agent.

Noting

For partnership or company registration, this does not necessarily require the person providing the service, for example the employee, to be registered in their own right. The partnership or company can be registered if they have a sufficient number of registered individuals, being registered agents, to provide services to a competent standard and to carry out necessary supervisory arrangements.

The contractor could work for a registered tax agent or BAS agent [and therefore not be required to register themselves] This requires the contractor to perform services for the registered agent who then provides services to the client for a fee or other reward. The registered agent must comply with its obligations under the Code, including ensuring that any tax agent service it provides, or that is provided on its behalf, is provided competently. In addition, the registered agent must also ensure all civil penalty obligations under the TASA are met including that they supervise and control relevant work that the contractor does.

Employees of registered tax agents or BAS agents are not necessarily required to be registered with the Board. A registered tax agent or BAS agent company or partnership might need or choose to have some of its employees registered under the TASA in order to meet the “sufficient numbers requirement” of the company or partnership.

ICB Comments and Questions

The above information is extracted from a full information sheet released by the TPB during July (PDF of the TPB information sheet is available here). We are now seeking to clarify some of the examples as while we appreciate some aspects of the Boards information we see implications we do not believe were intended.

For the TPB response to ICB - Use of contractors and offshoring, click here

What if a client is dodgy?

It is black and white and you don't have to lose the client – but you might want to.

Your client or their accountant says to claim something that is clearly not a business deduction and there should be no gst claim allowed. What can you do without losing the client? You cannot make a statement you know is false

  • therefore you cannot lodge a BAS that you know is wrong
  • you cannot prepare a BAS that you know is wrong
  • you can prepare reports that you know is right and put the other items to suspense or tell the client you have prepared the reports without the claim in them

You cannot lodge a BAS unless the client authorises you to lodge it.

Therefore:

  • Prepare the reports (Draft a BAS that is correct according to you)
  • Leave them with the client
  • Come back next month and prepare correct reports for next month

If the client falsifies a statement – that doesn't mean you did. But you must be able to prove you provided the correct reports with the correct claims.

What if the client cannot pay their bills?

‘Where is our liability if we can see someone is trading insolvent or close to it’ Do we have liability or responsibility.

A professional advisor must be careful about crossing the line into being regarded as an “officer” of the business. An “officer” of the business puts themselves at risk of personal prosecution if they have incurred debt on behalf of the business when there isn’t really an ability for that business to pay the debt that is being incurred. (i.e. Don't be part of not paying off creditors)

If a contract bookkeeper is the accounts payable officer of a business then they must be careful of when the business becomes questionable. They must remain in communication with the business owners. They must raise concerns about the ability of a company to pay it’s debts as and when they fall due, with the owners / “officers” of the business. A contract bookkeeper should not represent the company in incurring debt if you don’t believe that it will be paid within terms. However a contract bookkeeper can also not breach your clients confidentiality by telling others about the state affairs of your client, unless the client says you can.

So where is the line?

The first real question is what is your job description (terms of engagement)? Are you the accounts payable person and you process the payments as directed by and at the times advised by your client. Then you do your job. Any questions by suppliers need to be referred to your client. If the supplier asks you whether the client is able to it’s debts you cannot answer.

If your job description is to be the “officer” who arranges supplies from suppliers on behalf of your clients and you believe that the client cannot pay debts you are expected to incur then you should no longer act for that client.

If you are engaged by the client to come in at the end of the month/quarter and prepare reports or BAS’s etc and you notice the problem, you advise the client of your concerns as a professional advisor. Don’t advise any third party because then you would be in breach of the clients confidentiality.

However you cannot assist a client to break the law, any law. You cannot assist a client to continue to trade insolvent.

Obviously the ideal best answer is to walk away as soon as you know. Communication with the client and obtaining their advice on how the company is going to become solvent again would be at a minimum advisable. Assisting them to get the appropriate insolvency or administration advice would also be appropriate.

What if my clients supplier is questionable?

My client has a subcontractor who has not registered for GST although he is turning over in excess of the $75,000 limit from my client alone. He also contracts for other people. He should be registered for GST and my client has hinted along those lines but he has chosen to ignore it.

Does my client have any responsibility in this area to the ATO as he is aware that this contractor should be registered for GST or is it solely up to the subcontractor to declare and change his GST status?

Response

Is your client doing anything wrong?

He pays a contractor, based on an invoice with a valid ABN and no GST. Your client pays the invoice and doesn't claim back any GST because the invoice didn't have any GST on it. Is the client that you are engaged by, that pays you, that relies on your advice requiring you to do anything wrong?

Doesn't sound like it.

So would the code of conduct apply a breach to you, when you are advising your client correctly and helping them claim back only the GST they are allowed to?

It doesn’t.

We don’t believe there is any obligation placed on you or your client to ensure compliance for a supplier to register for GST. An ABN yes, for GST no.

If you were the BAS Agent for the subcontractor then you are in a different spot. The code of conduct says:

(4) You must act lawfully in the best interests of your client. (9) You must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client. (10) You must take reasonable care to ensure that *taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client. Other responsibilities (11) You must not knowingly obstruct the proper administration of the *taxation laws. (12) You must advise your client of the client’s rights and obligations under the *taxation laws that are materially related to the *tax agent services you provide. Therefore if you were the advisor to a business that had begun to turnover more than $75k you would have to advise your client that they need to register. You could not be any part of lodging BASs for a client where you know they have a GST liability that they are not declaring. What happens if they don’t register? The ATO would require payment of 1/11 of their gross receipts and apply penalty.

You do not have an obligation as a BAS Agent to dob in other non- compliant taxpayers. It's then up to you as a taxpayer, do you feel obligated or whatever to dob in a non compliant taxpayer?

So who is my client?

The code of conduct applies to registered BAS Agents for the “services that you provide” to a client. So if you are advising a client “for a fee” then you must consider the obligations imposed on you by the code but only to the extent of the work you are doing for that client. eg If the client has engaged you to do the payroll but not the BAS then you limit your concerns to the areas of payroll.

Who should register?

The question: We are a little confused about the whole BAS registration and PI Insurance situation It seems the TPB is also confused about what’s required.

I have been registered as a BAS Agent with the TPB, and at the same time understood that I had to register all the entities that I worked for as a BAS Agent. At the time I was using the ATO tax portal under the partnership name, which we later turned into a company. We then reviewed our situation and started doing bookkeeping under another company name. I have spoken to the ATO and sorted out my BAS lodgements though the ATO Portal Can we get clarification of whether it’s me as an individual, or me as a company director, or me as working for a company, that needs to be a registered BAS Agent?

The confusion further continues when I go to apply for PI Insurance.

Is it me as a registered BAS Agent that needs PI, or is it the company that needs PI, or is it both? Further – what sort of cover is required? I can’t find that out anywhere – all I know is that I need PI Insurance (I think).

The ICB answer

The entity that provides the bas agent services must be registered (sometimes referred to as the billing entity). In your case that would appear to be the company you are now using to provide the bookkeeping service.

As from 28 January 2012 that company will need to be a registered BAS Agent and continue to renew its registration). To be eligible for that renewal, the company must have a satisfactory number of individuals to provide supervision.

So you personally must register as well

I am not sure about your comment “all entities that I work for as a BAS Agent as well”. If that means each of your clients, then no they do not each have to register. If that means you bill for BAS services through a variety of entities to fee paying clients then each of those entities needs to be registered.

It is not necessary for the directors of a company to be registered agents but they must meet the fit and proper tests. Each company must have a registered individual who is providing the supervision of the BAS Services being provided.

Does your bookkeeper need to quit?

The tax agent services law begins to bite. Reports are flowing in of increased telephone enquiries to creditable bookkeepers as backyard bookkeepers are either confused or admitting they need to stop doing illegal work.

Confused bookkeepers are quitting their very part time bookkeeping contracts because the law now says they aren’t allowed to do it anymore unless they are registered, and they believe it isn’t worth registering. There is some truth to this view but not entirely.

The truth:

  • Bookkeepers can continue to be contract bookkeepers.
  • If a contract bookkeeper is “relied on” for their work in relation to “BAS Services” they must consider registration.
  • A bookkeeper can continue to process the transactions, reconcile the bank, report on those transactions without registering.
  • A Registered BAS Agent can go further and “provide certainty”, “Advise” and “represent the client to the commissioner” in relation to the clients preparation and information on a Business Activity Statement.

One of the big sticking points appears to be the cost of Professional Indemnity Insurance. Yesterday a colleague in the medical profession reported the resignation of their 2 to 3 hour per month bookkeeper, because they would have to register and the PII premium of over $2000 made it not worthwhile. Creditable and appropriate PII policies can be obtained for under $500.

The new law doesn’t apply to employee bookkeepers.

Many backyard and part time bookkeepers have finally noticed that they need to be both professional as bookkeepers but also consider registering in line with the tax agent services law, as that law begins to bite.

ABC Bookkeeping Services is Professional & Certified & Qualified & Registered!

Our firm prides itself on:

  • Legally providing bookkeeping services to a significant range of businesses.
  • We are registered as a BAS Agent with the Tax Practitioner Board and therefore can legally be “relied on” for our work on your Business Activity Statement, and related areas.
  • We can continue to process the transactions, reconcile the bank, report on those transactions.
  • As a Registered BAS Agent we can go further and “provide certainty”, “Advise” and “represent” you to the commissioner in relation to the clients preparation and information on a Business Activity Statement.

Our firm maintains a comprehensive and fully featured Professional Indemnity Insurance policy should anything go wrong.

Our firm has achieved membership of the Institute of Certified Bookkeepers. A professional association of bookkeepers helping us to constantly enhance our professionalism, our knowledge and our effectiveness in best bookkeeping practice.

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