Accounting industry told to ‘stand its ground’ on code changes
Change Accountants & Advisors has said it wants to see the motion to disallow the code of conduct instrument passed tomorrow with the amended version still “unacceptable”.
The chief executive and founder of Change Accountants and Advisors, Tim Munro, has urged all accountants, tax lawyers and BAS agents to make it clear to both the professional bodies and their local members of Parliament that the determination is still not acceptable.
Munro said there were five key reasons why the Senate should vote in favour of a motion to disallow the Tax Agent Services (Code of Professional Conduct) Determination 2024.
Last month, Senators David Pocock and Dean Smith gave notice of a second disallowance motion to be moved in the Senate on 8 October 2024.
In a recent article, Tax Institute senior advocate Robyn Jacobson noted that as with any disallowance motion, there is the potential for the motion to be withdrawn, the motion to proceed on its scheduled date, or for the motion to be deferred to a date within the 15-day sitting period following the date of the notice.
Munro said it was unfair that over 70,000 tax and BAS agents would be affected by the increased costs and obligations imposed by the determination when the instrument is clearly in response to recent misconduct by PwC and other big four firms.
"Small and medium accounting firms should not be collateral damage for the wrongs of just a few people in the Big 4 firms," Munro said.
Munro also stressed that the amended Section 15 would destroy the trust between tax agents and their clients.
"We did not agree to become unpaid ATO tax auditors with the possibility of recriminations against us if we do not report alleged wrongdoing of our clients," he said.
The joint bodies have similarly raised concerns with section 15 in response to the proposed changes by the government.
"The updated Section 15 of the Determination is still written so poorly that it will again require TPG guidance prepared and legal advice for accountants to apply," Munro said.
"Given the very public outcry about the original determination and the request from the Assistant Treasurer to negotiate and amend controversial items, the fact that the government has come back with a difficult-to-understand set of requirements that confuses the matter even further shows they haven’t properly taken into consideration all the feedback and submissions given to them."
Change Accountants & Advisors also noted the incredibly short consultation period provided, with the amendments released on 25 September 2024 and submissions due by 2 October 2024.
"This gave accountants only five days to prepare and lodge a submission on something so important as this, and this tiny response timeframe is totally ridiculous. A reasonable expectation is for the government to give appropriate time to hear all issues that interested parties have," the accounting firm said.
Munro warned that one of the most concerning aspects of the new obligations is that the Office of Impact Analysis (OIA) states that the measures in the determination are estimated to have no impact or low impact on compliance costs and that an impact analysis was not required.
"How ridiculous is this? Any thinking person would easily understand that at minimum the increased cost to clients would be 15 per cent to 20 per cent (or more) of their current accounting fees," Munro said.
"This OIA advice is clearly wrong and whoever provided this advice should be immediately fired for gross incompetence."
Munro said that the professional bodies need to hold their ground and call for the instrument to be disallowed.
He also called on accountants to let their professional body know why the determination must be disallowed and for their local federal member to know that this matter is continuing and request that they support a disallowance of the instrument.
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