<?xml version="1.0" encoding="ISO-8859-1"?> <docID>326527</docID> <postdate>2024-08-14 10:17:26</postdate> <headline>Month of pain with little gain</headline> <body><p><img class="aligncenter wp-image-326542" src="https://citynews.com.au/wp-content/uploads/2024/08/tax-laws-gail-freeman.jpeg" alt="" width="900" height="600" /></p> <p><span class="kicker-line"><span style="font-weight: 400;">"Accountants and financial planners are all distressed." Chartered accountant </span><b>GAIL FREEMAN </b><span style="font-weight: 400;">bemoans a bewildering month of difficult changes for tax agents.</span></span></p> <p class="p1"><b>July has been a crazy month. It started on July 4 when the assistant treasurer released a determination that applies to all tax practitioners and initially was to be effective from August 1.</b></p> <p><img class=" wp-image-189331" src="https://citynews.com.au/wp-content/uploads/2019/08/Gail-2019.jpg" alt="" width="360" height="458" /></p> <caption>Gail Freeman of Gail Freeman & Co.</caption> <p class="p2"><span class="s1">The thing about a determination is that it doesn't have to go through federal parliament to be approved. It is just an instrument that the assistant treasurer signs; it's tabled and if no-one objects, it automatically becomes law. </span></p> <p class="p3"><span class="s1">So we spent all July updating our quality-control manuals, our staff contracts and everything else to make sure they comply. </span></p> <p class="p3"><span class="s1">Then, on July 31, the assistant treasurer stated that, for small businesses such as mine, these new rules now don't come into play until July 1 next year! </span></p> <p class="p3"><span class="s1">However, tax agents are expected to start to put these plans into place as soon as possible. </span></p> <p class="p3"><span class="s1">In his letter, the assistant treasurer explained these changes were as a result of the controversial PwC's consulting arm's problems. </span></p> <p class="p3"><span class="s1">Where I have difficulty with his comment is that we do not have access to any government input and, therefore, for my small practice this is inapropriate. </span></p> <p class="p3"><span class="s1">Again, there seems to be a difficulty here because this guidance was issued a month after the original determination and contains such advice as "a false or misleading statement is a statement that is false or misleading". </span></p> <p class="p3"><span class="s1">The assistant treasurer has said he will not be changing the determination and the Tax Practitioners Board (TPB) will indicate how it is to be dealt with. </span></p> <p class="p3"><span class="s1">The difficulty I have with this is that, as it is legislated determination, it seems to me that anyone bound by it has to rely on the words that it contains and not some interpretation as provided by the TPB. </span></p> <p class="p3"><span class="s1">Not only that, but we may have to report clients, other tax agents or ourselves to the TPB in a variety of undefined circumstances.</span></p> <p class="p3"><span class="s1">There will be a lot more to follow over the coming year. What does that mean for you? Because of the additional work accountants will have to do, it means your fees will most likely increase. </span></p> <p class="p3"><span class="s1">If you are used to turning up to your meeting with your tax agent and saying, I use my phone about 50 per cent of the time and you can’t prove it, you don’t have a claim and you have potentially made a false or misleading statement to your tax agent. </span></p> <p class="p3"><span class="s1">There are some tax agents unaware of this and there is going to be all sorts of reverse workflow coming out of this determination. So you are likely to be asked more questions by your accountant and for more evidence as to your claims.</span></p> <p class="p3"><span class="s1">Also in July, the Compensation Scheme of Last Resort (CSLR) was enacted. This resulted from the Dixon debacle and I’m sure that many of you will have lost money, as a result of having invested in Dixon’s products. </span></p> <p class="p3"><span class="s1">If you put in a claim in time, the CSLR will compensate you. This is funded by all the advisers who didn’t do the wrong thing, so someone like me has to pay $5000 for all the problems that Dixon caused. </span></p> <p class="p3"><span class="s1">I find that unconscionable and unpalatable that the way the scheme has been designed means that anyone can make mistakes and their misdemeanors will be paid for by all the people who have done the right thing. Very strange. </span></p> <p class="p3"><span class="s1">So accountants and financial planners are all distressed. For all the people who did the right thing they are having a levy put on them for the people who didn’t. And the tax agents now have a much heavier burden when preparing tax returns.</span></p> <p class="p3"><span class="s1">I plan to provide more detail in a subsequent article.</span></p> <p class="p2"><span class="s1"><i>If you need help with your tax return, financial planning or your super contact the expert team at Gail Freeman & Co on 02 6295 2844, email <a href="mailto:info@gailfreeman.com.au">info@gailfreeman.com.au</a> or visit <a href="http://gailfreeman.com.au">gailfreeman.com.au</a></i></span></p> <h6 class="p4"><b>Disclaimer<br /> </b><span class="s1">This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.</span></h6> </body>