TPB chair speaks on new code rules, shuts down ‘scaremongering’

TPB chairman Peter de Cure has called for an end to the “unhelpful scaremongering” in the tax community over the government’s changes to the code of conduct and says the legislative instrument is consistent with existing obligations.

As practitioners and professional bodies speculate over the broad wording of provisions while awaiting guidance from authorities, de Cure told Accountants Daily the TPB's approach would be “pragmatic and practical”.

“I'd really like to assure people that the legislative instrument and the requirements in there are consistent with the existing code and will be implemented in a pragmatic and practical fashion,” he said.

“I think some of the scaremongering that's been going on around with the potential interpretations of the legislative instrument is just genuinely unhelpful.”

Practitioners and professional bodies have overwhelmingly opposed Assistant Treasurer Stephen Jones’ determination to the code of conduct since it was registered on 2 July.

The TPB has also been subject to criticism over its lack of coordination with the government and reactivity after it released a statement notifying agents of the changes over a week after the determination.

“From 1 August 2024 tax practitioners will need to comply with eight additional obligations that will supplement the existing obligations under the code,” the TPB’s statement on 11 July said.

"Tax practitioners should familiarise themselves with these new requirements and review their practices to ensure they are compliant."

In response, the Institute of Financial Professionals (IFPA) sent out an email to members on Friday criticising the “bland” and “belated” statement that demonstrated “no appreciation of the challenges facing smaller practices”.

Professional bodies believe the instrument creates uncertainties and inconsistencies in practice with existing client confidentiality principles and weakens the code’s “principles-based approach” with “prescriptive” obligations. The 1 August start date has also been deemed “unrealistic and unachievable”.

But de Cure said the instrument provided clarity and that concerns over apparent inconsistencies were moot because the legislative instrument would override existing obligations.

“There is allegedly a concern that the instrument breaches code obligations in relation to confidentiality,” he said, referring to concerns over section 15 requiring agents to report clients to the ATO if they identify errors in returns or statements and their client does not consent to an amendment.

“That’s clearly not correct, because the instrument imposes a legal obligation on the practitioner to make the disclosure. The instrument has the force of law.”

“All this instrument is doing is saying that if a tax practitioner is aware that a statement made on behalf of the client is false and or misleading, and they can’t get their client to correct that statement, then they have a positive obligation to disclose. That doesn’t make you an auditor.”

He defended the need for robust regulation, arguing it benefited the majority of practitioners who maintained high professional standards.

"The robust regulation of the profession works in the favour of the vast majority of practitioners, the people that are doing the right thing and behaving with appropriate professional standards," he said.

The TPB chairman also dismissed interpretations that claimed section 45 of the instrument could infringe on practitioners’ privacy. The section forces practitioners to disclose “any” matter that could influence clients’ decision to engage them.

While CA ANZ speculated that this could entail “matters of a private nature like health, religion, sexual orientation, political persuasion or even sporting affiliations", de Cure said the TPB would not take such a broad approach.

“This is about issues in relation to engaging a person to be a tax practitioner. And that doesn't include anything to do with their personal religious beliefs, their political beliefs," he said.

He said the legislative instrument would also be compatible with human rights, including the right to privacy, political communication and freedom of personal beliefs.

But mental health “could possibly be relevant” as a matter for disclosure, he said and would be determined during the consultation process with professional bodies.

As the instrument’s 1 August start date looms, the TPB would also be running an awareness campaign with webinars while working on releasing guidance prioritising the “most contentious items”.

However, de Cure conceded guidance would “take a while” and would only be available after obligations came into effect next month.

“We’ll be rolling it out over the next couple of months, as fast as we can,” he said, adding that enforcement would not begin immediately.

“I don't see the implementation of this as something where we start looking for problems on 1 August. But with practitioners brought to our attention because of other problems, we will probably look at how well they're managing around the items that are required by the code.”