What Can a Bookkeeper Do Who is Not a Registered 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 professionals – 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 (TASA).

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 Tax Agents or BAS 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 it 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 (moreso) 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 Bookkeeper’s role within the business, a Bookkeeper’s responsibility and duties can be quite diverse.

What is a BAS Agent?

A BAS Agent is a professional who is authorised to prepare and lodge business activity statements (BAS) and other tax-related services on behalf of businesses, including any other reporting obligations under the Australian Taxation Office (ATO) legislation.

What 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 ATO in relation to:

• All Goods and Services Tax (GST) matters (collected or paid).
• Wine Equalisation Tax (WET).
• Fuel Tax Credits (FTC).
• Luxury Car Tax (LCT) matters.
• Fringe Benefits Tax (FBT) – collection and recovery only.
• All aspects of payroll that relate to the withholding of tax amounts and the reporting of those amounts to the employee and the ATO.
• 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 (SG) 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 Pay as you go (PAYG) withholding (PAYGW) amounts; e.g. 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 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 with 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, 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.

What A BAS Agent Can’t Do

A BAS Agent is not able to:

• Advise, ascertain, and represent a client to the Commissioner of Taxation in other tax matters.
• Interpret the income tax provisions and advise a client how that is to apply to them. (They can implement the advice or a system prescribed by 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.

What is a BAS Service?

A BAS service is defined in the TASA as follows:

A BAS service also includes a service that the Tax Practitioners Board (TPB) has declared, by way of a legislative instrument, to be a BAS service.

Examples of BAS Services

This table includes a non-exhaustive list of the types of services that may and may not constitute a BAS service under the TASA. (Ref: TPB – BAS agent services)

*Tax service – must be provided by a Registered Tax Agent.

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:
  • The GST law.
  • The wine tax (WET) law.
  • The luxury car tax (LCT) law.
  • The fuel tax (FTC) law.
  • PAYGI amount payable.
• The PAYGW system (Parts 2‑5 and 2‑10 in Schedule 1 of the Tax Administration Act 1953).

BAS provisions also relate to other services:

• SG contributions for employees and contractors.
• Calculation and lodgement of SGC statements.
• Dealing with superannuation payments made through a clearing house.
• Completing and lodging TPAR on behalf of a client.
• Lodging a TFN declaration on behalf of a client.
• Applying to the Registrar for an ABN.

The TASA also provides that the TPB may, by legislative instrument, specify that another service is a BAS service. The following legislative instruments extended the scope of services that registered BAS Agents can provide:

• On 15th April 2020, the Tax Agent Services (Specified BAS Services No.1) Instrument 2020 was registered to allow BAS Agents to provide certain services under the Government’s COVID‑19 stimulus measures.
• On 5th November 2020, the Tax Agent Services (Specified BAS Services No.2) Instrument 2020 was registered to allow BAS Agents to provide certain services in relation to SG and the SGC. From 6th November 2020, BAS Agents were allowed to provide the following additional services:
  • Services under the Superannuation Guarantee (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.
  • Determining and reporting the SG shortfall amount and any associated administrative fees, Including:
    • Advising about an SGC liability, including calculating SGC and preparing the SGC statement.
    • Advising about the offsetting of late payments of SG against the SGC, including completing the late payment offset election section of the SGC statement.
    • Representing a client in their dealings with the ATO relating to the SGC, including:
      • Lodging SGC statements.
      • Accessing the SG and SGC accounts in online services for BAS Agents.
        (ICB note – ATO have not given BAS Agents this view yet.)
      • Being an authorised contact for payment arrangements and requesting penalty remissions relating to the SGC account.
      • Being an authorised contact for the SG and SGC account.
      • Being an authorised contact for any audit or review activity undertaken by the ATO relating to the SGC.
    • Completing and lodging the TPAR to the ATO on behalf of a client.
    • Sending a TFN declaration to the Commissioner on behalf of a client.
    • Applying to the Australian Business Registrar (ABR) for an ABN on behalf of a client.

This instrument repeals Tax Agent Services (Specified BAS Services) Instrument 2016 that was registered on 1st June 2016.

Who is Allowed to…?
Bookkeeper or Registered Agent?

Important: If it constitutes a BAS service under the TASA, then the service must be performed by a registered BAS Agent, not by an unregistered Bookkeeper.

GST

A Registered BAS Agent can be the specific advisor who is relied on in relation to the decisions and implementation of GST. The interpretation, certainty, and 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, and review of GST and payroll are BAS Agent services.

An unregistered Bookkeeper can and should:

• Ask the relevant questions.
• Provide general guidance papers, not as specific advice, which 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.

Superannuation Guarantee Law

A BAS Agent can:

• Advise in relation to the application of 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 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 the business owner to lodge an SGC Statement with the ATO.

A BAS Agent cannot:

• Advise what the default fund for an employer can be.
• Advise in relation to the benefits of superannuation or the effect of contributions into superannuation.
• 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 legislation. A BAS Agent may complete the forms for imposition of the SGC. The legislative instrument is in force 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.

Employee/Contractor Decisions

The decisions of who is an employee and who is a contractor is not part of the PAYG 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, which may raise issues.
• Apply the advice of the tax advisor/business manager about who is an employee.
• Apply PAYGW to the employees.
• Apply SG law to contractors entitled to superannuation.
• Lodge a 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 the 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.

Australian Business Register

A BAS Agent can apply to the Registrar for an ABN on behalf of a client.

Summary

A BAS Agent is registered with the TPB to provide BAS services for a fee or other reward, and may be relied upon by clients that their BAS provision obligations are being met.

BAS services are legislated by the TASA, which establishes the TPB and provides for the registration and regulation of Tax and BAS Agents.

Note: If a Bookkeeper asks questions of others for interpretation or explanation of the system, then they are not being relied on and they are not providing a BAS service.

However;

• There remains a role for a Bookkeeper who is not a registered BAS 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 TASA for BAS Agents. These civil penalty provisions can be grouped into two categories, those relating to:

1. Conduct that is prohibited without registration.
2. 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

Penalty amounts for breaching the civil penalty provisions are imposed in the form of penalty units. The current value of one penalty unit is $313. The penalty amounts listed in the table below reflect the current penalty unit value. For example, one penalty unit is $313, therefore 250 penalty units = $78,250. (Ref: TPB – Civil penalty provisions)

Conduct Prohibited Without Registration

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

*Note: Tax agent services include tax (financial) advice services.

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

• An employee providing a BAS agent service to their 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 they:
  • May lawfully provide the service under a State or Territory law regulating legal practice and the provision of legal services.
  • 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.

Payroll Service Providers and Registration

A payroll service provider does not need to register as a Tax or BAS Agent when:

• 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 the entities regarded as in-house providers.
• The services are not provided for a fee or reward.
• The services being provided do not meet the definition of Tax Agent or BAS Agent services. 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 ATO through Standard Business Reporting 2 (SBR2) enabled software, providing the data transmission does not require the interpretation of application of a taxation law.
  • Preparing bank reconciliations.
  • Determining State/Territory obligations or entitlements (including payroll tax and WorkCover).

• ICB – ICB Guide to Superannuation
• ICB – Taxable Payments Reporting System
• TPB – BAS agent registration
• TPB – BAS agent services
• TPB – TPB(I) 31/2016 Payroll service providers
• Tax Agent Services Act 2009
• Tax Agent Services (Specified BAS Services No.1) Instrument 2020
• Tax Agent Services (Specified BAS Services No.2) Instrument 2020