Companies putting themselves at risk with unregistered agents

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The Institute of Public Accountants is urging businesses to use registered BAS agents, to avoid unnecessary penalties and interest. Many Australian businesses currently rely on unregistered agents, increasing their exposure to risk.

“BAS services must be provided by registered practitioners,” said Andrew Conway, the institute’s Chief Executive Officer. “There are only 14,000 registered professionals servicing Australian businesses. There are more that 2.4 million businesses in Australia, therefore clearly Australian businesses will be engaging the services of unregistered people.”

Under section 25-5 of the Income Tax Assessment Act 1997, taxpayers are able to apply for the cost of a tax agent completing their tax return – but similar provisions are not made for businesses using the services of registered agents for BAS reports.

Using unregistered tax agents brings certain risks, as the agent you use might not have the qualifications required of registered agents – or sufficient experience. Many unregistered agents do not have professional indemnity insurance, either.

Conway was critical of the Tax and Services Act, saying it does not do enough to encourage businesses to use registered tax agents. Although it imposes penalties for anyone offering BAS services without registering with the Tax Practitioner Board, it “does little to encourage small businesses to engage only with registered BAS agents.”

He said that if small businesses were encouraged to deal only with registered tax agents, regulation itself would receive encouragement. “We recommend deductibility for the costs of registered BAS agent services and an amnesty for illegal operators to come forward and seek BAS agent registration,” he said.

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