IPA responds to upcoming TPB consumer price adjustment
The TPB is due to carry out its first annual CPI adjustment on registration fees from 1 July.
The application fee to register or renew as a tax agent, BAS agent or tax adviser is subject to a consumer price index (CPI) adjustment on 1 July, the Tax Practitioners Board (TPB) said.
The CPI adjustment was introduced by the government in the 2018-19 federal budget.
This year, the adjustment to application fees will see tax agent registration rise to $687 from $675. Tax adviser fees will edge up by $10 to $550, while that of BAS agents will increase to $137 from $135.
IPA general manager of technical policy Tony Greco explained that any increase, no matter the size, is felt, especially in an environment of increasing burdens on small practitioners.
He underlined that the IPA is unhappy about the removal of the non-business tax agent category, which ultimately means that a sole trader operating through a structure now has to pay two lots of fees at the higher rate.
“In the scheme of things, this is just a CPI increase which is small when you consider all things, but the one that underlies it is the fact that if you are a one-man show and you operated through an entity, one registration would be non-business and one would be business. But now when they come up for renewal, that practitioner's registration is going to be two lots of that higher amount, rather than one non-business [registration],” said Mr Greco.
He cautioned that given the ongoing increasing burden on small practitioners, who are finding themselves under fee pressures, it is becoming difficult for some to keep ahead.
"These days, there are options available for clients to seek a cheaper service and there's always a bit of price competition in the marketplace. We're seeing smaller practitioners trying to diversify into financial services and ASIC's already hit that sector with its industry funding model, so if you overlay some of the other imposts, it starts to mount up,” Mr Greco explained.
He said that the IPA believes that as the Tax Agents Services Act (TASA) is mostly about consumer protection, some of the TPB funding should come from the government coffers.
“We said in our submission that TASA is really about protecting the consumer and it's the government's way to ensure that agents are doing the right thing by the consumer,” Mr Greco noted.
“So to some extent we believe some of the funding should also come from the government rather than just the profession itself because there's a lot of public protection built into TASA and therefore there is a community service being provided.”
The TPB warned that if you have an upcoming renewal, and you pay and submit before 1 July 2019, the payment will be based on the old fee. Applications paid and submitted after 1 July 2019 will be based on the new fee.