The tax industry has urged the government to quickly pass new reforms which would place financial advisers giving tax advice under new regulations, following a last-minute push from advisers saying they haven’t received enough time.
The legislation is set to take effect from July 1, 2013. It mandates any financial advisers who provide tax advice in the context of financial planning must be properly regulated under the Tax Practitioners Board.
The government passed legislation creating the Tax Practitioners Board in 2010 requiring other changes for tax and Business Activity Statement agents, but another piece of that legislation package affecting financial advisers giving tax advice has not been passed.
The new rules require any financial planners who provide tax advice to be registered and have met certain requirements.
Now, with just days until July and the new rules begin, financial planners say they need more time to prepare.
“With so much detail still unknown and the short time frame remaining to prepare, the [Financial Planners Association] has formally asked the Assistant Treasurer, the Opposition and Independent MPs to support an extension of the deferment arrangements for planners for six to 12 months,” the FPA said in an email to its members.
But the tax industry says enough is enough.
Stephanie Caredes, tax counsel at the Tax Institute, told SmartCompany the piece of legislation affecting tax advisers should be passed as soon as possible.
“The original exemption was supposed to expire in June 2011, was deferred, and now expires on June 2013,” she says.
“There will be a generous three-year transition period, even though these rules start and the legislation begins to apply from July.”
Paul Drum, head policy for CPA Australia, says the industry has had sufficient time to prepare.
“If the legislation passes, they have 18 more months to prepare,” he says, warning that if the legislation doesn’t pass in the current sessions, given the election it may not pass for some time.
Drum points to the fact other aspects of the tax and finance industries which have been regulated and reformed over the past few years.
“For one group to miss out, it sends an odd message to the market about its importance, and also about consumer protection.”
The FPA was contacted this morning, but no reply was available prior to publication.