It’s tax time once again, so most people who don’t have the knowledge to prepare a valid and effective tax return will be asking – who can prepare tax returns? The answers are pretty simple, finding those who are actually legally permitted to do so AND who have the adequate knowledge and skill to do it right, may not be!
Beware the well intended family member or friend
A friend or family member is permitted to “help” you prepare your tax return. However they are strictly prohibited from charging you any sort of fee (in cash or kind) for doing so.Further, they have no personal responsibility for the “advice” and “assistance” they provide you. If there are errors, all responsibility, and liability for potential penalties and interest, remains entirely with you!
Who can charge a fee for tax returns
On the topic of charging fees, the ONLY people or organisations that are permitted to charge a fee for preparing tax returns are Registered Tax Agents.
A Registered Tax Agent has applied to the Australian Governments Tax Practitioners Board (“TPB”), met rigorous educational, experience and ethical standards, met professional indemnity insurance requirements AND meets the minimum level of professional development and ongoing training each year.
You can follow the link here to their website and use it to confirm your adviser is a Registered Tax Agent.
There is now also a category of registered agent known as a Registered BAS Agent (BAS being short for Business Activity Statement).
While Registered BAS Agents have “some” knowledge of tax affairs, as the name suggests, they are authorised to assist with Activity Statements ONLY, not tax returns!
Further, as of 1 January 2016, Financial advisers will also be able to register with the TPB to allow them to provide incidental tax advice as part of their financial planning service.
But their registration and the services and advice they can provide in relation to tax remains limited and they can not prepare tax returns.
If you intend to see a Financial adviser about tax matters we encourage you to ask them and yourself – as someone who does not work in and on tax matters day in and day out, as someone who is only providing tax advice incidental to their main service and as someone who has substantially less education, experience and ongoing training in tax, are they the best person for you to rely on when it comes to your tax affairs?
Identifying a Registered Tax Agent and Qualified, Skilled Accountant
Chartered Accountants Australia & New Zealand
This brings us to the next potential problem.
The reality is most people go to see an “accountant” for assistance with their tax. Generally, people assume that an accountant is legally able to play this role.
However, unfortunately, there are no rules governing who is permitted to call themselves an “accountant”. There are numerous examples, and unfortunately they continue day in day out, where so called “accountants” purport to be able to help people with tax returns, however they in fact are not Registered Tax Agents!
We in fact just signed up a new Client within the past couple weeks who had this exact problem here in Perth. They had signed on with an “accountant” for help, the accountant wasn’t registered, and not only did they create a huge mess due to their lack of skills, experience and ethics, they have also dug a substantial financial hole for the Client which they are now struggling to get out of. Don’t worry, we will get them there 😉
Next, even if you find an accountant who is a Registered Tax Agent, you should investigate what type of accountant they are.
I run the risk of alienating some people here, including a couple of our own staff, but “arguably” the best skilled and the most difficult of accounting qualifications to achieve is a Chartered Accountant.
Certainly most accountants who have worked with the larger professional firms in Australia and around the World, which comes with unmatched training, professional development, experience and not to mention competition to even get in, are Chartered Accountants.
The other highly skilled accountant in Australia is a CPA (Certified Practicing Accountant).
Both of these designations are very difficult to achieve and you can be confident if your accountant is either a CA or a CPA, he or she should know what they are doing and what they are talking about.
There are however (for me disappointingly) other accounting designations.
Again I run the risk of creating an argument and some animosity here, but in my view those other designations are “generally” easy to achieve and I would argue for many they are a fall back when the accountant was unable to achieve CA or CPA status!
(Addendum: There is also now a Chartered Tax adviser (“CTA”) designation issued by the Tax Institute. This is “arguably” as difficult, if not even more so, to achieve as becoming a Chartered Accountant and is obviously a designation specific to an advisers tax qualifications and skills. The designation is not yet wide spread, and is still growing its recognition within the community, however similar to the CA status, if your advise is a CTA, they know their tax!)
The Tax Office can provide “some” help
The ATO’s website has improved dramatically over recent years, and there is a lot of information available.
We as Registered Tax Agents, CAs, CTAs and CPAs even refer to it from time to time.
But be aware the assistance provided is at a high level, is usually angled from the ATO’s perspective (ie. they are unlikely to point you in the direction of loop holes or planning opportunities) and can only take you so far. However it is definitely a great place to start if you are looking to broaden your understanding of a particular topic.
There is also Tax Help which is a free service provided by community volunteers designed to assist low income earners prepare their tax returns. Tax Help operates out of approved community-based centres and as stated is free. Of course Tax Help will only be able to assist with relatively simple tax returns and are unable to get involved in more complex financial matters. You can learn more about Tax Help here.
So you asked, Who can prepare tax returns?
Maybe you should ask, who should prepare MY tax return! And the answer, we think, should be us!
We are here to help! We GUARANTEE you will receive your maximum legal refund, plus you will receive a FREE wealth creation book which will show you the fundamental principles of building wealth and achieving the financial future you desire. So don’t delay …
Disclaimer: The information provided here is designed to act as a general guide only. It does not cover all possible scenarios and does not consider your personal circumstances. Further we can not guarantee the information remains up to date or relevant in light of any changes. You should not rely on the information provided without seeking personalised, professional advice. CapitalQ disclaim all liability where unauthorised and unapproved reliance is placed on the above information.