Background: In January 2010 the final part of the Tax Agent Services Act 2009 became law and will take effect from 1 March 2010. After that date all bookkeepers offering BAS services must be registered with the Tax Practitioners Board, or be working under the supervision and control of a BAS or Tax Agent.

This Act does NOT apply to employed bookkeepers, business owners or their spouses. Under Australia's self assessment tax regulations any business owner, or their employees working under their supervision, can prepare and lodge BAS returns without any qualifications.

  Consumer awareness: Business owners need to be aware of the following:

• If the business owner is using the services of a BAS or Tax Agent, the Act provides the consumer with a safe harbour from penalties:

  • A taxpayer who uses a tax agent or BAS agent will benefit from a safe harbour from certain administrative penalties in certain circumstances. Penalties will no longer apply:

    • where a false or misleading statement is made carelessly, provided the taxpayer has taken reasonable care to comply with their tax obligations by giving their tax agent or BAS agent the information necessary to make the statement; and

    • where a document (such as a return, notice or statement) is not lodged on time in the approved form due to the tax agent’s or BAS agent’s carelessness, provided the taxpayer gave the agent the necessary information, in sufficient time, to lodge the document on time and in the approved form.

• If the business owner is NOT using the services of a BAS or Tax Agent then the taxpayer is liable for any mistakes or errors made by their bookkeeper.

• Under the new arrangements, BAS agents will be governed in the same way as tax agents, but will only be able to provide a limited range of services relating to the taxation laws relevant to a BAS provision in the law.

• Registration requirements:

  • Meeting the fit and proper person test, as well as minimum educational qualifications and relevant experience requirements, will be required in order to obtain registration to provide tax agent services for a fee or other reward.

  • The minimum educational qualifications and relevant experience requirements are set at a less demanding level for registration as a BAS agent than for registration as a tax agent, in recognition of the narrower scope of services provided by BAS agents.

• The Board may impose conditions on registration limiting the scope of the services that an agent may provide to one or more areas of the taxation laws or one or more type of tax agent service. These limitations correspond to the prescribed qualifications and relevant experience of an individual agent or, in the case of an agent that is a partnership or company, to correspond to the prescribed qualifications and relevant experience of the individuals who work for the agent.

• The introduction of a Code of Professional Conduct

  • A Code of Professional Conduct (Code) governs the ethical and professional standards of tax agents and BAS agents. The Code is set out as a statement of principles and the Board may issue binding written guidelines for the interpretation and application of the Code.

• A range of sanctions for breaches of the Code of Professional Conduct

  • Under the new arrangements, if a tax agent or BAS agent has breached the Code, the Board has a range of options. The Board may caution the agent, require the agent to complete a course of training, subject the agent to practising restrictions, require the agent to practise under supervision, or suspend or terminate the agent’s registration. (Currently, the state Boards are only able to suspend or terminate registration.)

  • The Board may also apply to the Federal Court of Australia (Federal Court) for an order to pay a pecuniary penalty for certain serious misconduct, or seek an injunction to prevent an entity from engaging in, or compel an entity to undertake, certain conduct.

• Such a wide range of sanctions allows the Board to tailor its response according to the severity of the misconduct.