Institute of Certified Bookkeepers

What can a Bookkeeper do who is not a BAS Agent?

In today’s world, bookkeeping can be performed by do-it-yourself business owners, their employees or a contracted professional.

Do-it yourself Bookkeepers, including those who are self-employed / contracted, are responsible for their own work and adherence to compliance obligations.

Employee Bookkeepers are responsible to the Business Owner, and accordingly the Business Owner remains responsible for the work performed by the employee. Employees do not need to register as a BAS Agent to provide services to their employer.

Contracted professional i.e. Bookkeepers and Accountants, perform the tasks agreed to with the Business Owner. However, contracted professionals are also required to comply with the requirements of tax laws including the Tax Agent Services Act 2009.

There are various bookkeeping tasks that can be performed by any contracted professional.

There are a range of bookkeeping tasks, described as tax services or BAS agent services that can only be provided by registered BAS Agents or Tax Agents, respectively.

The relationship of Bookkeepers to BAS Agents to Payroll Service Providers is complex and intertwined with each other. However, the question remains, what can a Bookkeeper do who is not a BAS Agent?

What is a Bookkeeper?

Bookkeeping, in a traditional sense has been around since the late 1400’s, whereby they used individual ledgers for goods and services bought and sold. These transactions were painstakingly entered into the ledgers and was a time-consuming process. Bookkeepers most likely emerged while society was still using the barter system to trade rather than a cash or commerce economy. Ledgers were kept very simple as business sense, and ability with numbers were not always found in one person, so these business owners who were math-phobic, employed Bookkeepers to maintain a record of what they owed and who owed debts to them.

A Bookkeeper ultimately runs the financial side of a business! or more so, assists business owners with financial efficiency and adherence in compliance with taxation law. Bookkeepers are responsible for providing accurate, up to date financial information to assist the Business Owner in making strategic business management decisions and financial decisions. Depending on the business and the Bookkeepers’ role within the business, a Bookkeepers’ responsibility and duties can be quite diverse.

A Bas Agent can do:

A BAS Agent is issued a licence (registration) that says they can advise a client, and provide certainty to a client or represent that client to the tax office in relation to:

  • All Goods and Service Tax (GST) matters (collected or paid)
  • Wine Equalisation Tax (WET)
  • Fuel Tax
  • Luxury Car Tax matters (LCT)
  • Payment of Fringe Benefits Tax (FBT)
  • All aspects of payroll that relate to the withholding of tax amounts and the reporting of that amount to the employee and the tax office.
  • Services under the Superannuation Guarantee (Administration) Act 1992 to the extent that they relate to payroll functions or payments to contractors, including determining and reporting Superannuation Guarantee Charge (SGC) shortfall amount and any associated administrative fees.
  • All aspects of completing and lodging the Taxable Payments Annual Report (TPAR) to the ATO, on behalf of a client.
  • All aspects of other PAYG withholding amounts i.e. no Australian Business Number (ABN), interest and dividend.
  • All aspects of the payment of income tax via PAYG instalments. (PAYGI).
  • Applications to the Register for an Australian Business Number (ABN), on behalf of a client.

In addition, a registered BAS Agent may:

  • Design and set up compliance systems in respect to business and the BAS provisions.
  • Advise a business on how the above areas of law affect them, in respect to business and the BAS provisions.
  • Review a business operation in relation to these areas of law.
  • Review reports to verify their accuracy for the correct application of BAS provisions (GST, WET, LCT, FTC, Pay as you go withholding (PAYGW), SG, TPAR and the payment of PAYGI and the payment of FBT instalments).
  • Provide certainty to the client that they are getting it right.

Note: These tasks cannot be done by a Bookkeeper who is not a registered agent.

A BAS Agent can’t do:

  • Advise, ascertain, and represent a client to the Commissioner of Taxation in other tax matters.
  • 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 be either the external Tax Agent or maybe the business themselves but not if the business “relies” on them for the advice and certainty).

A Tax Agent can also advise and complete these tasks, and other areas of taxation law.

This table includes a non-exhaustive list of the types of services that may and may not constitute a BAS service under the TASA. The TPB provide the following:

ServiceBAS ServiceNOT a BAS Service
Applying to the Registrar for an ABN on behalf of a client. X  
Installing computer accounting software without determining default GST and other codes tailored to the client   X
Coding transactions, tax invoices and transferring data onto a computer program for clients through processes that require the interpretation or application of a BAS provision X  
Coding transactions, tax invoices and transferring data onto a computer program for clients through processes that do not require the interpretation or application of a BAS provision.   X
Confirming figures to be included on a client’s activity statement. X  
Completing activity statements on behalf of an entity or instructing the entity which figures to include. X  
General training in relation to the use of computerised accounting software not related to client's particular circumstances.   X
Preparing bank reconciliations.   X
Entering data without involvement in or calculation of figures to be included on a client's activity statement.   X
Providing advice about or confirming the withholding tax obligations for the employees of a client. X  
Services declared to be a BAS service by way of a legislative instrument issued by the Tax Practitioners Board (TPB). X  
Preparing and providing an income statement that may include reportable fringe benefits amounts and the reportable employer superannuation contributions. X  
Registering or providing advice on registration for GST or PayPAYG withholding. X  
Services under the Superannuation Guarantee (Administration) Act 1992 to the extent that they relate to a payroll function or payments to contractors. X  
Advising about an SGC liability, including calculating the liability and preparing the SGC statement X  
Advising about the offsetting of late payments of superannuation contributions against the SGC X  
Completing the late payment offset election section of an SGC statement X  
Representing a client in their dealings with the ATO relating to the SGC – lodging SGC statements, being an authorised contact relating to SG and SGC, and accessing these accounts in the ATO’s online services for BAS Agents X  
Being an authorised contact with the ATO for payment arrangements relating to SGC account X  
Being an authorised contact with the ATO for requesting penalty remissions relating to SGC X  
Being an authorised contact for any audit or review activity undertaken by the ATO relating to SGC X  
Advising about claiming of an allowable tax deduction for superannuation contribution   *Tax Service
Advising about superannuation contribution caps and the effect of exceeding those caps   *Tax Service
Advising on salary sacrificing arrangements and salary packaging   *Tax Service
Advising about fringe benefits tax laws (FBT)   *Tax Service
Advising about, preparing and/or lodging income tax returns   *Tax Service
Determining and reporting the superannuation guarantee shortfall and associated administrative fees. X  
Dealing with superannuation payments made through a clearing house. X  

*Tax Services must be provided by a Registered Tax Agent.

What is a BAS Service?

A BAS service is a tax agent service, as defined in the Tax Agent Services Act 2009 (TASA)as:

  • Ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise under a BAS provision.
  • Advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise or could arise under a BAS provision.
  • Representing an entity in their dealings with the Commissioner in relation to a BAS provision.

that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:

  • To satisfy liabilities or obligations that arise, or could arise, under a BAS provision.
  • To claim entitlements that arise or could arise under a BAS provision.

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

  • Preparing or lodging an approved form about a taxpayers 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.

What is a BAS provision?

The term BAS provision is defined in Income Tax Assessment Act 1997 as:

  • Part VII (collection and recovery only) of the Fringe Benefits Tax Assessment Act 1986
  • The indirect tax laws, including:
    1. GST amount collected or paid
    2. WET payable or refundable amounts
    3. Fuel Tax Credit amounts
    4. PAYG Instalments amount payable
    5. FBT Instalment amount or credit claim
    6. Luxury Car Tax amounts
    7. PAYGW payable

BAS provisions also relate to other services:

  • Superannuation Guarantee (SG) contributions for employees and contractors
  • Calculation and lodgement of superannuation shortfall
  • Dealing with superannuation payments made through a clearing house
  • Completing and lodging Taxable Payments Annual Report (TPAR) on behalf of a client
  • Lodging a tax file number (TFN) declaration on behalf of a client
  • Applying to the Registrar for an Australian Business Number

Part 2-5 and 2-10 in schedule 1 of the Tax Administration Act 1953, which are about pay as you (PAYG) system

In addition, on 15 April 2020, the TPB made the following additional services under the TASA to be BAS service: Tax Agent Services (Specified BAS Services No.1) Instrument 2020

  • A service under the Boosting Cash Flow for Employers (Coronavirus Economic response Package) Act 2020.
  • A service under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020.
  • A service under any rules that the Treasurer has made or may make, by legislative instrument, pursuant to section 20 of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020.
  • A service under any legislative instrument made under subsections (b) or (c) above.

On 17th August 2020, the TPB made an additional service under the TASA to be a BAS service

Tax Agent Services (Specified BAS Services No.2) Instrument 2020

  • A service under the Superannuation Guarantee (SG) (Administration) Act 1992 to the extent that the service relates to a payroll function or payments to contractors.
  • Dealing with superannuation payments made through a clearing house.
  • A service under the Superannuation Guarantee Charge Act 1992.
  • Determining and reporting the superannuation guarantee shortfall amount and any associated administrative fees.
  • A service under Part 3B of the Superannuation Industry (Supervision) Act 1993.
  • Completing and lodging TPAR to the Australian Taxation Office (ATO), on behalf of a client.
  • Sending a tax file number declaration to the Commissioner, on behalf of a client.
  • Applying to the Australian Business Registrar (ABR) for an Australian business number on behalf of a client.

Who is allowed to…? Bookkeeper or Registered Agent?

Install and Configure Software

General software/bookkeeping / accounting configuration   Bookkeeper
Specifically determining what GST codes apply when Registered Agent
Advising on legal compliance of the business tax invoice Registered Agent
Configuring how a BAS like report is to be produced Registered Agent
Implementing a default GST code list provided by a Registered Agent to the business Registered Agent
 
Note:  If the client is relying on this install and configuration service to help ascertain their future GST/BAS obligations, then it is a BAS Service: Registered Agent

Classroom or Onsite Training

General training on the use of software is not a Bas service  Bookkeeper
General training around how GST works or is reported in the software is not a BAS service           Bookkeeper

Bookkeeping

Following instructions               Bookkeeper
Transfer data onto a computer program         Bookkeeper
Enter data Bookkeeper
Code transactions (based on instructions) Bookkeeper
Process payments Bookkeeper
Prepare bank reconciliations Bookkeeper

Advanced Bookkeeping

Preparing an approved form Registered Agent
Lodging an approved form Registered Agent
Giving advice about a BAS provision Registered Agent
‘Transacting’ with the ATO on behalf of a client Registered Agent
Anything and everything where work is reviewed by another registered agent Bookkeeper
Reconciling facets of the accounting records for a period Bookkeeper
Providing generic reports Bookkeeper
Preparing a report that is used to prepare the BAS Registered Agent

One aspect of the answer is: -

When are you relied on for providing a certain level of knowledge or expertise in helping your clients (in relation to a BAS provision)?

GST

Registered agents can 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”

Superannuation Guarantee Law

A BAS Agent can:

  • Advise in relation to the application of Superannuation Guarantee (SG) to payroll and contractors.
  • Advise which components of a remuneration package (pay) have SG applied, and which don’t.
  • Determine and report the SG shortfall amount and any associated administrative fees.
  • Deal with superannuation payments made through a clearing house.
  • Lodge and pay superannuation obligations including the Superannuation Guarantee Charge (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 SG.

A BAS Agent may complete the calculations of SG 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 SG. The legislative instrument is still on its way that gives legal authority to their announcement.

Employee / Contractor Decisions

The decisions of who is an employee and who is a contractor is not part of the PAY Withholding divisions of the Act included in BAS services.

A Bookkeeper (who may or may not be a Registered 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 PAYGW 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 PAYGW and report them on the BAS. A BAS Agent may finalise the end of year STP reporting 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 PAYGW.

Taxable Payments Annual Report (TPAR)

A registered 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 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.

Australian Business Register

A BAS Agent can:

  • Apply to the Registrar for an ABN on behalf of a client

Summary

  • Are you being relied on to give the client confidence that their BAS provision obligations are being met?
  • What is a BAS service?

Note: If you ask questions of others for interpretation or explanation of the system, then NO you are not being relied on and you are not providing a BAS service.

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.

Civil penalty provisions for BAS Agents

There are significant civil penalties for anyone providing BAS services for a fee or reward, or advertising BAS services, while unregistered.

There are several civil penalty provisions in the Tax Agent Services Act 2009 (TASA) for BAS Agents. These civil penalty provisions can be grouped into two categories, those relating to:

  • Conduct that is prohibited without registration.
  • Conduct of registered BAS Agents.
  • A civil penalty is a pecuniary (or monetary) penalty imposed by courts exercising a civil rather than criminal jurisdiction. State and Commonwealth government bodies can apply to the courts to have a pecuniary penalty imposed against an entity for breaching a civil penalty provision in some circumstances. Civil penalties do not include criminal convictions or imprisonment.

Penalty amounts for breaching the civil penalty provisions are imposed in the form of penalty units. The current value of one penalty unit is $222. The penalty amounts listed in the table below reflect the current penalty unit value. For example, one penalty unit is $222, therefore, 250 penalty units = $55,500.

You will breach a civil penalty provision if you are unregistered and:

 ConductMaximum penalty
1 You charge or receive a fee or other reward for providing a BAS service
  • $55,500 (250 penalty units) for an individual
  • $277,500 (1250 penalty units) for a body corporate
2 You advertise that you will provide a BAS service
  • $11,100 (50 penalty units) for an individual
  • $55,500 (250 penalty units) for a body corporate
3 You represent that you are a registered BAS Agent

There are some exemptions to the civil penalty provisions listed in the above table and do not apply if you are:

  • An employee who is providing a BAS service to your employer for a salary, wage, or other benefit.
  • A customs broker licensed under Part XI of the Customs Act 1901, if the BAS service relates to imports or exports to which an indirect tax law applies.
  • A legal practitioner providing BAS services as a legal service under the circumstances where you:
    1. May lawfully provide the service under a State or Territory law regulating legal practice and the provision of legal services.
    2. Prepare or lodge a return like statement* in the course of acting for a trust or deceased estate as a trustee or legal personal representative.

*These statements can include BAS, Instalment Activity Statements (IAS), SG statements and PAYGW payment summary or income statements.

Resources

Appendix A

Payroll Service Providers – what can you do when you are not a BAS Agent?

The term ‘payroll service provider’ takes on a broad interpretation and includes individuals or entities that process payroll or perform payroll related functions for clients to satisfy their clients relevant tax related statutory requirements and obligations. The performance of payroll related functions may include a reporting ‘pay event’ or an update event’ using Single Touch Payroll (STP) enabled software.

NOTE: Ultimately, whether a payroll service provider needs to register with the TPB is a question of fact! Each situation needs to be considered on a case by case basis having regard to the facts and circumstances of the payroll service provider. TPB Information sheet - Payroll service providers

The table below gives examples of circumstances where a payroll service provider does not need to register as a Tax Agent or BAS Agent.

Circumstances where payroll service provider does NOT need to register as a Tax Agent or BAS Agent.
A payroll service provider does not need to register as a Tax Agent or BAS Agent if:
  • the services provided are considered to be ‘in-house services. This includes arrangements where there may be a cost recovery and/or shared services arrangement in place for the provision of the services by entities regarded as inhouse service providers
  • the services are not provided for a fee or other reward
  • the services provided do not meet the definition of tax agent service (which includes BAS service). Such services include, for example: -
    • data entry, providing the data entry does not require the interpretation or application of a taxation law
    • coding of transactions based on instructions provided
    • processing of payments
    • the transmission of data to the Commissioner through Standard Business Reporting (SBR) enabled software, providing the data transmission does not require the interpretation or application of a taxation law,
    • preparing bank reconciliations
    • determining State/Territory obligations or entitlements (including payroll tax and WorkCover) 
Transmission of data to the ATO (Commissioner of Taxation)
  • The payroll service provider must ensure they have appropriate procedures/processes in place within their Standard Business Reporting (SBR) enabled software to ensure they are not regarded as providing a tax agent service (which includes a BAS service) 

The table below gives examples of circumstances where a payroll service provider does need to register as a Tax Agent or BAS Agent. 

Circumstances where payroll service provider MUST register as a Tax Agent or BAS Agent
Client outsources their entire payroll and accounts work to a payroll service provider
  • The payroll service provider, which may include a digital service provider or a business process outsourcing provider, interprets and applies a taxation law, which includes a BAS provision, and/or represents the client in their dealings with the Commissioner and it would be reasonable to expect that their client will rely on those services. This includes circumstances where the payroll service provider reports employee payroll information using STP enabled software.
The payroll service provider offers a help desk which provides customised advice to assist their client meet a specific tax outcome
  • For advice to constitute a tax agent service, the advice would need to relate to the client’s particular circumstances and would require the interpretation of taxation laws. It must also be reasonable for the client to rely on the advice. If these conditions are met, such advice will be a tax agent service.
The payroll service provider undertakes a payroll compliance review and check for their client to ensure compliance with taxation obligations
  • For the payroll compliance review to constitute a tax agent service, it would need to involve the payroll service provider providing an assessment and/or opinion as to whether their client is compliant with their taxation obligations under one or more taxation laws.
The payroll service provider offers tax related advice to their client that is specific to the client’s circumstances
  • For the advice to constitute a tax agent service, it would need to relate to the client’s particular circumstances and would require the interpretation of taxation laws. It must also be reasonable to expect the client to rely on the advice. The advice may be verbal or written.
  • Examples of tax related advice typically provided by payroll service providers that would require registration include advice regarding:
    • PAYG withholding liability
    • Superannuation Guarantee obligations
    • fringe benefits tax laws
    • termination and redundancy payments
The payroll service provider prepares and/or lodges documents with the ATO on behalf of their client
  • The preparation and/or lodgement of documents with the ATO, including the reporting of employee payroll information using STP enabled software, on behalf of a client is a tax agent service and will require the payroll service provider to be registered.
The payroll service provider deals with the Commissioner of behalf of their client
  • For this type of activity to constitute a tax agent service, it must involve the payroll service provider dealing with the Commissioner on behalf of a client in respect of a taxation law. This may include the reporting of employee payment information, pay as you go (PAYG) withholding amounts and superannuation liability information to the Commissioner using STP enabled software. 

Note:    If an unregistered payroll service provider provides a Tax Agent or BAS service for a fee or other reward, they may contravene a civil penalty provision in the TASA. The TPB may apply to the Federal Court for an order requiring the payroll service provider to pay a civil penalty or may seek an injunction to restrain the payroll service provider from engaging in the unregistered conduct.

Options available to payroll service providers who need to register

If a payroll service provider intends to provide a tax agent service or a BAS service for a fee or reward, there are some options available:

  • Subject to meeting the eligibility requirement, the payroll service provider could register as Tax Agent or BAS Agent. TPB Registration

Engage a registered Tax Agent or BAS Agent to provide tax agent services and work under supervision and control of the registered agent entity.

 

  • Updated: 19th July, 2021
loading