How to register as a tax practitioner? We all ask this question once we decide to set up shop. But how do we do that?
Register as a Tax Practitioner
The question actually throws a very wide net. There are tax and BAS agents as well as tax financial advisers. And then there are the various small groups who have to register with the Tax Practitioners Board (TBP). And each of these groups have different hurdles to take.
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Who needs to register as a tax practitioner
That is actually quite straight forward. If you provide the services of a tax or BAS agent or a tax financial adviser for a fee or other reward, you need to register with the TPB.
Who doesn’t need to register as a tax practitioner
You don’t need to register if you are an employee or contractor of a registered tax practitioner, and you don’t provide services in your own right.
However, there is a But. A company or partnership providing these services for a fee needs a sufficient number of registered tax practitioners. And so you might nevertheless have to register to meet this number.
Legal practitioners don’t need to register assuming the relevant State or Territory law doesn’t stop them from providing tax agent services in the first place. And as long as legal practitioners don’t prepare and lodge returns, BAS, IAS, super guarantee statements or PAYG W payment summary statements. However, the later restriction doesn’t apply if they act as trustee or LPR for a trust or deceased estate.
Who does what
Tax agents work out their clients’ tax obligations or entitlements and represent their clients in dealings with the ATO.
BAS agents work out their client’s obligations or entitlements under a BAS provision and also represent their clients in dealings with the ATO.
And tax (financial) advisers advise their clients about the tax consequences of the financial advice they provide.
Who registers as what
You usually only register for one of the three. Registration as a tax agent gives you the widest umbrella to work under. So there is no point in registering as a BAS or tax financial advisers if you are already registered as a tax agent.
Everybody who wants to register as a tax financial adviser needs to hold an AFS licence. But if an AFS licence holder is already a registered tax agent, then there is no need to register as a tax financial adviser.
However, with the new rules in place now, a registered tax agent can’t give any financial advice without an AFS licence. So a registered tax agent can only provide tax financial advice if they hold an AFS licence.
To register as an individual
To register you must be at least 18 years of age and be a fit and proper person. You must also satisfy the qualification and experience requirements. And you must maintain professional indemnity insurance.
Under the law the TPB has up to six months to make a decision about a new registration application. The TPB aims to process an application within 30 days of receiving a complete application. This applies both to new applications to register as well as renewals.
Fit and proper
There is actually no definition of fit and proper in the Act. There is only a list of factors the TPB needs to consider to determine whether you are fit and proper.
Qualification and experience
For an individual registration you need to have sufficient primary qualifications, done the Board approved courses and have sufficient relevant experience.
Primary qualification is usually your uni degree or similar. Board approved courses are the courses you do cover the two tax subjects and the three law subjects the TPB requires. And relevant experience is the time you provided the relevant services.
Board approved courses
The TPB has 2,604 approved courses listed on their website. Plus 440 disapproved courses and 7 that are in the approval process.
These Board approved courses don’t count towards CPE.
To register as a company or partnership
To register a company or partnership, each director or individual partner must be at least 18 years of age and be fit and proper. The company or partnership must maintain professional indemnity (PI) insurance and must have a sufficient number of registered individual tax practitioners to provide the relevant services.
So every director and partner needs to meet the fit and proper criteria. But not every director or partner needs to register as a tax practitioner. There just has to be a sufficient number of registered individuals. What that number is is up to the company or partnership, but within reason.
The company must not be under external administration and must not have been convicted of a serious offence involving fraud or dishonesty during the previous five years. The same applies if there is a company partner in your partnership.
To renew a registration
The TPB needs an annual declaration before the renewal date. In this annual declaration you demonstrate that you meet ongoing registration requirements as a tax agent, including PI insurance cover, CPE, fit and proper and meeting your personal tax obligations.
Application status
The TPB publishes detailed statistics of the number of applications and processed per quarter. The number of applications on hand decreased significantly from January to March 2018. And has decreased even more in the April to June 2018 quarter.
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Disclaimer: Tax Talks does not provide financial or tax advice. This applies to these show notes as well as the actual podcast interview. All information on Tax Talks is provided for entertainment purposes only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 04 May 2020
Tax Talks spoke to Ian Taylor - Chair at Tax Practitioners Board - for more details.
