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HWL Ebsworth Lawyers’ national tax team members Yan Li Wang, Partner; Vincent Licciardi, Senior Associate, and Solicitor Ellis Rigby discuss the Tax Practitioners Board’s new ATO data-matching campaign targeting those tax practitioners who failed to meet the 31 January 2019 deadline for bringing their taxation affairs up to date. Serious consequences might arise for practitioners found with compliance concerns, they write.
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On 11 December 2018, the Tax Practitioners Board (TPB) announced that it had launched a new compliance campaign targeting tax practitioners (Practitioner) who have outstanding tax obligations. The campaign offered all Practitioners with outstanding tax obligations until 31 January 2019 to bring all their taxation affairs up to date.
Now that this deadline has passed, the TPB intends to complete further datamatching with the ATO to identify Practitioners who did not take action by this time. Serious consequences may arise for Practitioners who did not comply with the requirements of the TPB’s compliance campaign.
Why target registered tax practitioners?
The TPB is concerned that non-compliant Practitioners are undermining trust and confidence in the profession, and the tax system generally. Non-compliant Practitioners may also be more likely to have non-compliant clients.
Data analysis conducted by the TPB uncovered non-compliant behaviour by Practitioners. The statistics as at 11 December 2018 are surprising:
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- 5% of all Practitioners have late income tax return and business activity statement lodgments;
- 7% of all Practitioners have outstanding tax debts which total $115 million and no active payment plan; and
- 2,700 Practitioners have outstanding self-managed superannuation fund returns (meaning these funds may be non-complying).
What are the consequences?
There are real and significant risks for Practitioners and their businesses if they failed to bring all their tax affairs up to date by 31 January 2019. Practitioners may be in breach of their professional obligations under the Tax Agent Services Act 2009, and specifically Item 2 of the Code of Professional Conduct. This could result in a Practitioner being the subject of deregistration or sanction, audit or investigation, debt recovery and prosecution.
What should you do?
Act fast. Even though the TPB’s 6 week grace period has passed, practitioners should make every effort to bring any outstanding personal and business lodgment obligations up to date, and meet all outstanding debts in full or by entering into a payment arrangement immediately to avoid severe adverse consequences.
Yan Li Wang is a Partner in the HWL Ebsworth Melbourne office and has more than 25 years’ experience in taxation and corporate/commercial law. She also leads HWL Ebsworth’s China Practice. Yan Li has extensive experience and knowledge in: Revenue law in both federal and state jurisdictions, including income (and capital gains) tax, state duties, goods and services tax, employment taxes and land tax for all aspects of commercial and financing transactions; contract and commercial law; conducting legal and tax due diligence; and trusts and equity law. She regularly advises on foreign investment regulatory issues involving FIRB, AUSTRAC and the Common Reporting Standards. Yan Li works with a variety of clients including large and mid cap private companies in the manufacturing, packaging, retail, property, leisure and hospitality industries, high net worth individuals and family groups both in Australia and overseas, and non-profit organisations. She is also fluent in Mandarin, Cantonese and other Chinese dialects which greatly assists her clients in their commercial negotiations and disputes and dealings with government agencies. Contact Yan Li at ywang@hwle.com.au.
HWL Ebsworth Lawyers’ national tax team have experienced professionals who can assist you in managing interactions with the TPB or the ATO. The team has successfully negotiated with the ATO and the TPB in matters involving potential deregistration or sanction, audits or investigations, debt recovery and prosecution of Practitioners.
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