The federal government should provide additional funding in next month’s budget to crack down on the increasing number of unregistered agents providing business activity statements (BAS) to small businesses, according to the Association of Accounting Technicians.
The AAT has written to Small Business Minister Bruce Billson and Assistant Treasurer Josh Frydenberg urging for more funding to be allocated to the government body responsible for ensuring the compliance of BAS agents, the Tax Practitioners Board.
The association is also warning small business operators to check the registrations of their BAS agents and bookkeepers.
While AAT chief executive Stuart Norman told SmartCompany it’s difficult to quantify how many unregistered BAS agents are operating in Australia, he says the feedback from AAT members who are registered BAS agents is unregistered operators are undercutting those who are registered.
For an SME, Norman says using an unregistered BAS agent is playing with fire, with companies opening themselves up to compliance and financial risk.
“If you use a registered BAS agent and something goes wrong, they have indemnity insurance and you have some recourse to get your money back,” Norman says.
“There is accountability and processes.”
But Norman says unregistered agents are unlikely to have done the required training and if a business owner signs off on BAS prepared by them, any liability from incorrect information being submitted to the ATO falls solely on the business owner.
The AAT did not specify a dollar amount in its letters to Billson and Frydenberg but Norman says the Tax Practitioners Board has “a massive workload at the moment” ensuring registered agents are doing the right thing and regulating the financial advice industry, it “literally has no resources to go out and find unregistered agents”.
“Industry-wide it is one of the biggest frustrations,” Norman says, pointing out the training and costs faced by registered agents, many of whom are small business operators themselves.
“It’s unfair on the people who are doing the right thing.”
Small Business Minister Bruce Billson did not confirm if he has received the AAT’s letter but told SmartCompany this morning SMEs using unregistered BAS agents is concerning.
“I’d be very concerned if I was a small business relying on an unregistered BAS agent to ensure that my tax reporting affairs were in order,” Billson says.
“Not only would the person masquerading as a BAS agent be contravening the Tax Agent Services Act 2009, I would be denying myself the competence and quality assurance a properly registered BAS agent offers.”
Billson says “competent and credible BAS advice” is essential and the Tax Practitioners Board does respond to complaints about unregistered BAS service providers. The board also provides a BAS agent symbol to identify if someone is a registered agent.
“A registered BAS service provider has to be a suitable person without any criminal or dodgy tax history; properly qualified; able to demonstrate relevant practical experience and be backed by professional indemnity insurance,” Billson says.
Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany he is not aware of unregistered BAS agents as a widespread issue in the small business community but says he supports organisations such as AAT, who “want to stop small businesses getting the wrong information or support”.