There are many different people that can help you prepare your tax return but only a tax agent can lodge your tax return to the ATO. So what are the differences between a tax agent and an accountant or bookkeeper? Here we have all the facts you should know.
To become a Tax agent, you have to undergo rigorous training and have an in-depth knowledge of Australian Tax law. Tax agents are required to uphold the strictest standards when it comes to preparing and lodging tax returns. To become a Tax agent you must be registered by the Australian Tax Practitioners Board. Tax agents are required to uphold a high standard in the interest of the general public.
One of the greatest strengths of a registered tax agent in trust – 96% of small business owners use registered tax agents to manage their tax affairs (ATO statistics). Tax agents know about business and how to advise their clients on the importance of cash flow – 90% of small businesses fail because of cash flow problems. Tax agents have an extended period of time to lodge tax returns, for Individuals doing their own taxes have until the 31st October each year to lodge, Tax agents have until 15th May of the next year to lodge individual tax returns.
Registered Tax agents take the stress out of tax – they do the worrying so the client doesn’t have to. And the best thing yet is a tax agents fee pays for themselves and their fee is 100% tax deductible. The last benefits for engaging with a tax agent this tax season is that they know tax law so they can advise you on matters relating to Negative gearing, Capital Gains, Medicare Levy, HECS/HELP Debt, Salary Sacrifice, Fringe Benefits, Low Income Tax Offset, Allowable Tax Deductions.
Accountants are trained and have the skills to prepare individual tax returns to a high level. The main difference is that accountants are not allowed to charge a fee for preparing and lodging tax returns or BAS statements. For an Accountant to start lodging tax returns and BAS statements they must obtain a Tax agents Licence or a BAS agents licence. Whilst most Accountants are good at what they do, they are not tax agents and without the knowledge of tax law, they will not be able to prepare the annual accounts to take advantage of all the benefits offered under the current tax law.
Small business should always engage the services of a registered tax agent to handle all their tax affairs – Tax agents are also accountants – usually university trained.
Bookkeepers are usually hired by small businesses to handle all their day to day accounts processing and take care of the following:
- Invoicing and manage the debtor’s ledger.
- Prepare the firms payroll and associated activity
- Pay the firms bills and record the payments in the books of the firm by using accounting software, such as Xero, MYOB or Reckon Accounts.
There are some restrictions that bookkeepers are not allowed to prepare. These include the lodgement of quarterly BAS and monthly IAS statements. Bookkeepers usually do not have knowledge of tax law and consequently, the financial reports they prepare are not up to standard for the tax agent. Tax agents are required to take the incomplete set of books and make many end of year adjustments to claim all the tax advantages. Small business is better off engaging a registered tax agent to handle all their accounting and taxation needs as an all-inclusive service – that way the books are recorded properly from the outset.
Tax Warehouse and its registered tax agents offer the following services:
- Business Coaching
- Taxation advice
- Tax Returns for Individuals, Partnerships, Companies, Family Trusts, Self-Managed Superannuation Funds & Unit Trusts
- Self-Managed Super Fund auditor
- Registered ASIC agent
- Set up companies
- Cash flow advice
- Business Plans
- ABN application
- Not for Profit auditor
To contact Tax Warehouse, please email [email protected] or call us on 03 5000 1710. For more information on all of our services head to our website News page.