Consultancy firm highlights further issues with tax advice guidance

Consultancy firm highlights further issues with tax advice guidance

A consultancy firm has called on ASIC to further review its interpretation of regulation 7.1.29(4), with licensed accountants still missing out on many of the exemptions available to unlicensed accountants.

In a paper written in conjunction with law firm Holley Nethercote, Licensing for Accountants chief executive Kath Bowler said ASIC has only provided guidance on one of the two taxation advice exemptions in Information Sheet 216, and it remains unclear how the potentially broader exemption in S766(B)(5)(c) applies.

“[Also], the way in which regulation 7.1.29(4) has been interpreted does not treat accountants fairly. It effectively provides a broader exemption to those that are not licensed then those that are licensed,” explained Ms Bowler.

“Licensed or authorised accountants cannot rely on the tax advice exemption in 7.1.29(4), and instead must provide licensed advice that requires an SOA for exactly the same advice.”

A lot of accountants made the decision to become licensed, she said, so that they could expand their services beyond the available exemptions.

“It was not expected that they would lose the benefit of exemptions available to unlicensed accountants,” she said.

Ms Bowler said she understands that ASIC will be issuing further guidance on s766B(5)(c) which covers the exemption relating to activities undertaken by tax agents.

“From our perspective it’s one of the most important pieces in the puzzle, so we're keen to see that as soon as we can,” she said.

She also added that the current regulations under R7.1.29(5) unfairly benefit unlicensed accountants in relation to superannuation compliance activities.

“The drafters of the regulations seem to incorrectly assume that licensed accountants want to replace the super compliance exemption with the ability to provide broader advice to their clients,” she said.

“Licensed accountants want to have the ability to offer a range of services from compliance through to strategic advice, depending on the needs of the client, rather than only being able to offer a broader service that at times is not appropriate, or even necessary.”

Some of the accounting firms with dedicated superannuation divisions, she said, have taken the responsible step of becoming licensed.

“However, they are now required to refer basic super compliance work to an unlicensed accountant if they wish to take advantage of the exemption,” she said.

“The experts in the firm are then only able to deal with the smaller proportion of clients that want advice.”

Consultancy firm highlights further issues with tax advice guidance
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