Start-ups using dodgy bookkeepers to prepare GST returns would miss out on deductions under a proposal by the Institute of Public Accountants, which has released its pre-budget submission.
According to Tony Greco, tax counsel at the IPA, there are potentially thousands of businesses using unregistered bookkeepers.
Greco told SmartCompany businesses face a number of risks by using a non-registered bookkeeper, including a fine of up to $27,500.
His proposal is to make certain tax deductions only available to registered bookkeepers, who would have to prove their registration during a filing.
“The system works so you can’t claim tax agent service deductions unless it’s being prepared by a tax agent. It would be doing almost the same thing here,” he said.
Greco said the IPA is putting forward its proposal to the Tax Practitioners Board today. He said there’s no reason why the government shouldn’t adopt the plan for the 2013 budget.
His comments come after the IPA released its pre-budget submission.
Each year, the IPA puts together a submission outlining to government its recommendations for the federal budget. This forms the basis of the IPA’s consultations with government throughout the budget period.
The IPA is calling for greater protection of the term “accountant”.
“There is no law preventing any person in Australia from calling themselves an ‘accountant’ and offering accounting services to the public,” it said in its submission.
“There is also no law that prohibits those that have committed offences such as theft or fraud in an accounting role from offering services to the public as an accountant.
“This situation poses a risk to the financial security of consumers who turn to individuals they believe are qualified to provide them with advice on matters which affect their financial wellbeing and that of their businesses.
“The IPA recommends that protection of the term ‘accountant’ is essential.”
Accountants are not required to be members of a professional accounting body, the IPA said, which is also concerning.
“We believe approximately half of all those describing themselves as accountants are not members of one of the three professional accounting bodies in Australia,” it said.
The IPA said the government has strengthened consumer protection in a range of areas related to taxation, superannuation, financial services and credit law over the past few years.
“It should be no different in the case of assuring consumers that they are using the services of an individual that meets a set of minimum requirements to practice as an accountant,” it said.
“This can be achieved by defining the term ‘accountant’ in law to mean a member of one of the three recognised professional accounting bodies.”