On the night the 2018 Federal Budget was tabled, the Chair of the Tax Practitioners Board (TPB), Ian Taylor, distributed a media release welcoming the Budget announcement of ongoing additional funding for the TPB, which he said would “ensure that the TPB is able to continue to meet its legislative responsibilities and protect consumers of tax services”.
The Budget paper itself, issued just before the TPB media release, spelled out that $20.1 million would be provided to the TPB over four years from 2018-19 to assist the agency in meeting its “broadened responsibilities to ensure that tax agent services are provided to the public in accordance with appropriate professional and ethical standards”. The 2018 Budget paper, on page 189, abruptly ends with the sentence: “This measure will be funded by an increase in tax practitioner registration fees.”
So to pay for the ongoing regulation and policing of standards of the tax practitioner community, Treasury is looking to pay for it by imposing an increase in fees on this very community. In addition, the proposed application fee increases will also be subject to an annual consumer price index (CPI) adjustment from 2019-20 onwards.
The increased fees are set out in the table below. Note that the increase in fees remains subject to regulation changes being made before the new application fees can take effect from 1 July 2018.
|Application fees# (payable at least once every three years)||Proposed fee*|
|Registration as a tax agent||$675|
|Registration as a tax (financial) adviser||$540|
|Registration as a BAS agent||$135|
#The application category ‘does not carry on a business’ will no longer exist.
* The proposed application fee increases are expected to be effective from 1 July 2018, with the application fee amounts being subject to an annual consumer price index adjustment from 2019-20 onwards.
One item from the above table (which has been provided by the TPB) that may stand out as obvious from the first note# above is that the category of registration that until now has enjoyed a 50% fee reduction (a registration where the applicant is “not carrying on a business as a tax agent”) is to disappear.
The Chair of the TPB, Ian Taylor, says the abolition of the “not in business” category is partly necessary to eliminate a misinterpretation some practitioners had regarding necessary registrations. “Of the roughly 42,000 tax agents currently registered with the TPB, about 30,000 are individuals, leaving 12,000 registered as other entities such as companies or partnerships,” he says. “Likewise with the 15,000 registered BAS agents, around 12,000 are individuals and 3,000 are other entities (but there are less partnerships in this group). With the roughly 20,000 TFAs (tax [financial] advisers), about 4,000 are companies.”
The TPB Chair says there has been some level of confusion, although not significant, about the registrations required to practice, where a corporate or partnership is part of the structure.
“Of those 30,000 individually registered tax agents, it would be safe to assume that a large proportion of them would be working as a sole practitioner, whilst the rest are most likely associated with a corporate or partnership that is in business,” he says.
“A non-individual entity such as a company or a partnership is required to have a ‘sufficient number’ of registered individuals in order to maintain registration. Practitioners who make up this sufficient number requirement are currently correctly using the ‘not in business’ category as the corporate is in business. Some other practitioners without a corporate entity have been incorrectly using the ‘not in business’ category of registration in order to take advantage of the 50% reduction in fees that category provided.”
Taylor says this change in registration will eliminate this practice and help maintain the stringent registration requirements that the TPB, and the community, expects.