The Tax Practitioner Board (TPB) have this week announced that they are launching a new compliance strategy, which is set for full release in February 2019.
Calling on registered tax practitioners (which collectively refers to tax agents, business activity statement (BAS) agents and tax (financial) advisers) to settle their outstanding tax obligations, Mr Ian Taylor, Chair of the TPB, is reminding tax practitioners including those who may have failed to lodge income tax returns and activity statements and those who may have outstanding debts with the ATO of their obligations. About five percent of tax practitioners have late lodgements with the ATO, including activity statements and tax returns. Seven per cent of tax practitioners have outstanding ATO debts, totalling nearly $115 million, without arrangement to repay these bills.
‘Many tax practitioners continue to serve their clients with professionalism and integrity. However, we are concerned with those practitioners acting in breach of the law. The numbers of tax practitioners failing their tax obligations can undermine trust and confidence in the profession,’ Mr Taylor said.
‘Tax practitioners with outstanding lodgements of income tax returns or activity statements and ATO debt need to address these obligations urgently as they may be in breach of the Tax Agent Services Act 2009.’
This new compliance strategy has been prompted by fresh data analysis indicating areas of non-compliance by registered tax practitioners.
The data shows that over 2,500 tax practitioners have not lodged one or more of their personal income tax returns or for those of their associated entities and over 1,000 have more than one outstanding Business Activity Statements (BAS) or for their associated entities. Of these numbers, nearly 500 tax practitioners have a combination of both.
In addition, over 2,700 tax practitioners, who are also trustees of their own self-managed superannuation fund (SMSF), have outstanding SMSF annual returns.
In relation to ATO debt, over 5,000 have a debt of over $300 (with no active payment arrangements), representing a total debt of nearly $115 million.
The TPB will initially work closely with practitioners to give them an opportunity to remedy any outstanding tax obligations,’ Mr Taylor said.
The period from now until the end of January 2019 is not an amnesty period, but the TPB will look more favourably on any actions that Agents have taken to rectify their positions. From February 2019 firmer action will be taken to enforce the laws, including investigations, sanctions, prosecutions and proactive collection action where appropriate. The TPB have advised that all investigations will be conducted on a case by case basis and any actions taken will therefore be assessed on the same basis.
A new information sheet outlines what is required of tax practitioners under Code item 2 (complying with the taxation laws in the conduct of personal affairs).