In 2021 Tax Tips

Who Can Provide Taxation Advice?

Taxation advice can be critical for individuals and businesses alike. So it’s important to know who can provide sound advice in this complex area and how to find a reputable adviser. This blog post will explore these topics and more.

If you’re like most people, you probably don’t know much about taxation advice. After all, who does? It’s a complex and confusing topic, and unless you’re a tax professional yourself, it’s tough to know who to trust for help. Fortunately, there are plenty of sources of good taxation advice out there.

To comply with the tax code, it’s important to seek professional advice. But who can provide that guidance? This blog post will explore the different options for finding tax assistance. So whether you need help filing your return or want advice on making better financial decisions, there is a qualified professional who can help.

Are you in need of some taxation advice? If so, who can you turn to for help? There are several different sources that you can consult, including accountants, lawyers, and financial advisors. 

However, not all of these professionals have the same level of expertise regarding taxes. So, which one should you choose? 

In this blog post, we will discuss the different types of professionals who can provide taxation advice and highlight the pros and cons of each. We will also provide tips on selecting the right professional for your needs.

Like most people, you probably don’t know much about taxation advice. And that’s okay—you’re not alone! Taxation can be a complex and confusing topic. But don’t worry, we’re here to help. This blog post will introduce you to the different types of professionals who can provide taxation advice. 

We’ll also discuss the benefits of working with a tax professional and outline some tips for choosing the right one for you. So whether you’re gearing up for tax season or just trying to get a better understanding of how taxes work, keep reading!

Are you looking for some help with your taxes this year? If so, you may be wondering who can provide taxation advice. Unfortunately, while many options are available, not all of them are equal in terms of quality and experience. 

In this post, we’ll take a look at some of the most reliable sources for tax advice. We’ll also discuss what to look for when choosing a tax advisor so that you can be sure to get the best possible service. 

No one likes to pay taxes, but they are necessary for our society. While most people prepare their tax returns, it’s important to know that you can also seek help from professionals. 

So who can provide taxation advice? This post will explore some of the options available to you. Keep in mind that the best option will depend on your individual needs and situation.

No one wants to think about their taxes, but it’s important to understand who can provide you with tax advice. Not just anyone can give you the right information – you need someone qualified and up-to-date on the latest changes. So, who can help?

Let’s get started!

Registration with the Tax Practitioners Board

As a starting point, for an adviser to provide tax advice, they must be registered with the Tax Practitioners Board under the Tax Agents Services Act 2009 (Cth) (‘TASA’).

Under section 50-5 of TASA, an adviser contravenes the law if unregistered and provides tax agent services for a fee. They advertise that they can provide tax agent services or represent themselves as registered.

Who Needs To Register As A Tax Agent?

If anyone provides tax agent services for a fee or other reward, they must be registered with the Tax Practitioners Board (TPB) unless an exemption applies to them. 

There are severe penalties for anyone providing tax agent services for a fee or reward, advertising tax agent services, or representing a registered tax agent while unregistered.

Tax (Financial) Adviser

If you are a financial adviser and provide tax advice or advice on tax consequences as part of your advice to clients for a fee or reward, you need to be registered with the Tax Practitioners Board (TPB).

A tax (financial) advice service consists of five key elements:

  • A tax agent service (excluding representations to the Commissioner of Taxation)
  • A service provided by an Australian Financial Services (AFS) licensee or representative of an AFS licensee
  • An AFS licensee or representative usually gives a service provided in the course of advice.
  • A service that relates to ascertaining or advising about liabilities, obligations or entitlements that arise, or could arise, under a taxation law
  • A service reasonably expected to be relied upon by the client for tax purposes.

Requirements For Registration

To be eligible to register as a tax (financial) adviser, you need to satisfy the following requirements:

  • be at least 18 years old
  • be a fit and proper person
  • maintain, be able to maintain, professional indemnity insurance that meets the TPB requirements
  • meet the qualifications and relevant experience requirements. These requirements include that you are, or have been, an Australian financial services (AFS) licensee or a representative of an AFS licensee within the 90 days preceding your application.

How To Register

You will need to complete an online application and provide relevant supporting documentation to register.

The current application fee is $560, which must be paid in full before submitting your application.

If your application is successful, you will be registered for at least three years from the date of approval.

Financial Advisers Providing Tax Advice

From 1 January 2022, if you are a relevant provider who provides, or intends to provide, tax (financial) advice services to retail clients for a fee, the following apply:

  • You must be a ‘qualified tax-relevant provider’ under the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act). This requires that you have met each of the applicable requirements set out in the Corporations (Relevant Providers—Education and Training Standards) Determination 2021 (Relevant Providers Determination).
  • It would be best to be listed on the Financial Adviser Register as a relevant provider and registered with ASIC from 1 January 2023. You will no longer have to be registered with the Tax Practitioners Board as an individual tax (financial) adviser. The Tax Practitioners Board will not accept applications to be registered as an individual tax (financial) adviser after 31 December 2021.
  • ASIC will primarily regulate you under the Corporations Act (with the Financial Services and Credit Panel operating as the single disciplinary body for all financial advisers who provide personal advice to retail clients on relevant products).

What Is A Tax Agent Service?

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A tax agent service is defined in s 90-5(1) of TASA as any service:

(a) that relates to:

  • (i)       ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a *taxation law; or
  • (ii)      advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise, under a taxation law; or
  • (iii)     representing an entity in their dealings with the commissioner; and

(b) that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:

  • (i)       to satisfy liabilities or obligations that arise, or could arise, under a taxation law;
  • (ii)      to claim entitlements that arise, or could arise, under a taxation law.

An adviser must therefore be registered under TASA to provide taxation advice. Furthermore, a special type of registration was developed for financial advisers covered by an Australian financial services licence (‘AFSL’) who do not prepare and lodge tax returns or represent taxpayers concerning matters involving the ATO

Thus, broadly, we outline the provision of taxation advice below having regard to the services typically provided by:

  • non-licensed advisers, e.g., an accounting firm that is also a registered tax agent; and
  • licensed advisers who are registered tax (financial) advisers.

In this regard, the Tax Practitioners Board website states:

All Australian financial services (AFS) licensees and their representatives that provide tax (financial) advice services for a fee or other reward must be registered with the Tax Practitioners Board (TPB). 

If you advise your clients about the tax consequences of the financial advice, you are providing a tax (financial) advice service.

Suppose your corporate authorised representative (CAR) provides a tax (financial) advice service for fee or reward, part or all of which is payable via a third party. In that case, your CAR will also need to be registered. 

Whether a CAR provides a tax (financial) advice service will depend on the nature of the ASIC authorisations that the CAR has.   

In most cases, a CAR provides tax (financial) advice services if they have an ASIC authorisation to provide financial product advice or to deal with a financial product.

What Is A Tax (Financial) Advice Service?

In most cases, if you advise your clients about the tax consequences of the financial advice, you are providing a tax (financial) advice service. A tax (financial) advice service consists of five key elements:

  • a tax agent service (excluding representations to the Commissioner of Taxation);
  • provided by an Australian financial services (AFS) licensee or representative (including individuals and corporates) of an AFS licensee;
  • provided in the course of advice usually given by an AFS licensee or representative;
  • relates to ascertaining or advising about liabilities, obligations or entitlements that arise, or could arise, under a taxation law; and
  • reasonably expected to be relied upon by the client for tax purposes.

Advisers that are tax (financial) advisers but not registered tax agents are not authorised to lodge tax returns, nor are they authorised to represent a client in dealings with the ATO. 

Further, licensed advisers who are registered tax (financial) advisers can provide taxation advice on taxation matters that are not covered by authorisation in their licence under CA Reg 7.1.29(4).

Company or Partnership Tax (Financial) Adviser

All AFS licensees and representatives who provide tax (financial) advice services for a fee or other reward need to be registered with the TPB.

‘Representative’ includes:

An authorised representative of the licensee, which may be:

  • an individual
  • a body corporate (or a corporate authorised representative)
  • a partnership
  • a group of individuals and bodies corporate that are the trustees of a trust
  • an employee or director of the licensee
  • an employee or director of a related body corporate of the licensee
  • any other person acting on behalf of the licensee.

There are additional requirements for registration, including that the company or partnership must have a sufficient number of individuals registered as tax agents or tax (financial) advisers to provide tax (financial) advice services to a competent standard and carry out supervisory arrangements.

Commonwealth versus State or Territory tax advice

Many advisers are surprised to learn that TASA only provides authority for a tax agent to provide advice on Commonwealth taxation law but does not cover state or territory laws such as stamp duty, land tax and payroll tax. 

Therefore, such advice would not be covered by the exemption of tax advice under s 766B(5)(c). ASIC information sheet INFO 216 makes a distinction between the exemption of the advice that falls under s 766B(5)(c) and CA Reg 7.1.29(4) by saying:

If you are a registered tax agent, the exemption in section 766B(5)(c) will cover most of the same types of advice as to the exemption in regulation 7.1.29(4) of the Corporations Regulations. 

However, the definition of ‘taxation law’, which applies to section 766B(5)(c), is slightly narrower than the tax laws that you can advise on under regulation 7.1.29(4). 

For example, advice about foreign tax laws and state and territory tax laws such as stamp duty, payroll tax and land tax is not covered under section 766B(5)(c).

(We examine the CA and CA Regs implications of providing tax advice further below.)

Further, advisers should be mindful that there are eight different state and territory jurisdictions in Australia with substantially different legislation and specific laws in each jurisdiction. Accordingly, providing state and territory law advice is complex and subject to considerable risk. 

For example, the legislation and practices of state and territory revenue offices levying duty on transfers of dutiable property can vary substantially from jurisdiction to jurisdiction. 

Indeed, we are aware that revenue offices in different jurisdictions take opposite views concerning the same wording in their applicable legislation (i.e., one office finds no duty applied and the other imposing duty).

What Constitutes Legal Advice?

It is also important to note that advice on state or territory tax matters also constitutes legal advice provided by a lawyer in the relevant jurisdiction. 

Indeed, a tax agent or tax (financial) adviser would also be at risk of providing legal services concerning Commonwealth taxation law if TASA did not cover them.

A person can only undertake legal work for a reward if an Australian legal practitioner. The penalties, as outlined below, for breach of this prohibition are substantial. 

Extracts from part 2.1 of the Legal Profession Uniform Law Application Act 2014 (Vic) (NSW has also adopted the Legal Profession Uniform Law) follow:

Section 2.2.9 provides:

9 Objectives

The objectives of this Part are —

  • to ensure, in the interests of the administration of justice, that legal work is carried out only by those who are properly qualified to do so; and
  • to protect clients of law practices by ensuring that persons carrying out legal work are entitled.

Section 2.2.10 provides:

10 Prohibition on engaging in legal practise by unqualified entities

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  • An entity must not engage in legal practice in this jurisdiction [Vic] unless it is a qualified entity.

Penalty: 250 penalty units or imprisonment for two years, or both.

  • An entity is not entitled to recover any amount and must repay any amount received in respect of anything the entity did in contravention of subsection (1). However, any amount received may be recovered as a debt by the person who paid it.

The two offences above carry a maximum $40,297.50 penalty (250 x $161.19) as one penalty unit under the Monetary Units Act 2004 (Vic) is $161.19 for FY2019. Also, a non-qualified entity or person engaging in legal practice could serve up to 2 years imprisonment.

What A Non-Licensed Adviser Can provide tax Advice?

Tax advice is given by a registered tax agent in the ordinary course of their activities as a tax agent, and that is reasonably regarded as a necessary part of those activities is excluded from constituting financial product advice under CA s 766B(5)(c) and CA Reg 7.1.29(4). Accordingly, we have extracted these provisions below.

Section 766B of the CA provides:

(5)      The following advice is not financial product advice:

(c)      except as may be prescribed by the regulations – advice is given by a registered tax agent or BAS agent (within the meaning of the Tax Agent Services Act 2009), that is given in the ordinary course of activities as such an agent and that is reasonably regarded as a necessary part of those activities.

(For simplicity, we focus on registered ‘tax agents’ and will not cover BAS or tax (financial) advisers unless we discuss these expressly below. Note that ASIC information sheet INFO 216 sets out some basic principles which tax and BAS agents can apply concerning SMSF services.)

The exemption provided under s 766B(5)(c) covers Commonwealth (of Australia) taxation law as that is what is covered by TASA being Commonwealth legislation. 

Accordingly, a non-licensed adviser seeking to provide tax advice about State, Territory or overseas tax law would, subject to the requirement to also be a lawyer before providing legal advice, need to seek to rely on CA Reg 7.1.29(4) discussed below. 

However, before discussing the tax exemption in CA Reg 7.1.29(4), we need to discuss how the exemption under CA Reg 7.1.29(1). Broadly, CA Reg 7.1.29(1) provides an exemption where an accountant is deemed not to provide a financial service if:

  • the accountant provides an eligible service in the course of conducting an exempt service; and
  • it is reasonably necessary to provide the eligible service to conduct the exempt service; and
  • the eligible service is provided as an integral part of the exempt service.

For CA Reg 7.1.29, a person provides an ‘eligible service’ if the person engages in the following conduct (extracted from s 766A(1)(a) to (f)):

(1)      For this Chapter, subject to paragraph (2)(b), a person provides a financial service if they:

  • (a)      provide financial product advice (see section 766B); or
  • (b)     deal in a financial product (see section 766C); or
  • (c)      make a market for a financial product (see section 766D); or
  • (d)     operate a registered scheme; or
  • (e)      provide a custodial or depository service (see section 766E); or
  • (ea)    provide a crowd-funding service (see section 766F); or
  • (f)      engage in conduct of a kind prescribed by regulations made for this paragraph.

Thus, a person who provides an eligible service of providing financial product advice about the provision of tax advice would need to satisfy the following to fall within the exemption provided by CA Reg 7.1.29(4):

  • it is reasonably necessary to provide the eligible service to conduct the exempt service; and
  • the eligible service is provided as an integral part of the exempt service.

Registered Tax Agents 

If you are a financial adviser and registered tax agent, you do not need to register as a tax (financial) adviser.

Please inform your AFS licensee of your existing registration.

FAQs

1. I have started my own business and wonder if I need to register for GST.

Australian businesses with an annual turnover of $75,000 or more must register for GST. If your business has a lower turnover, you are not required to register, but you may do so if you wish. 

You will only be required to charge your customers GST if you are registered. Your local office can assist you with your application to register for GST.

2. I run a furniture delivery business & have a 5-tonne truck, getting very expensive to run. I’ve heard the government gives business tax rebates for the cost of fuel. How to qualify for a fuel tax rebate?

Most Australian businesses can claim fuel tax credits for running machinery, plant, equipment and heavy vehicles used in running that business.

To be eligible to make a claim, the business must be registered for GST, and the claim should be made on the Business Activity Statement (BAS) that is required to be lodged.

The amount that can be claimed will depend on the type of fuel and its use. Fuel tax credits are not available where alternative fuels (e.g. LPG) are used.

3. I run my own business and want to know how to minimise my annual tax bill?

If your turnover is less than $50 million dollars, you would be able to access several small business concessions, including:

  • income tax concessions
  • excise concessions
  • Goods and Services Tax (GST) concessions
  • Pay As You Go (PAYG) instalment concessions and
  • Fringe Benefits Tax (FBT) concessions.

The $50 million turnover threshold applies to most concessions, except for:

  • the small business income tax offset – which has a $5 million turnover threshold
  • the capital gains tax (CGT) concessions have a $2 million turnover threshold.

4. I am self-employed and have paid personal superannuation contributions all year. What can I claim?

Provided that you satisfy the eligibility criteria, you will be able to claim a deduction for the superannuation contributions you have made to a complying superannuation fund or retirement savings account.

To do so, you must be fully self-employed, or no more than 10% of your assessable income (including Reportable Fringe Benefits and Reportable Superannuation Contributions) is from an employer.  

You must also have first notified your superannuation fund of your intention to make a claim and received a confirmation.

5. I have heard that self-employed people can claim superannuation co-contribution from the government. Am I eligible because I paid money into my super this year and run my own business?

You may be eligible for the superannuation co-contribution if more than 10% of your total assessable income is from running that business, eligible employment or a combination of the two.

Investment income is not eligible income. If you claim any of your superannuation contributions as a tax deduction, only the amount you do not claim will be eligible for the co-contribution.

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