Treasury considers bringing back accountants’ exemption
The Treasury is considering bringing back the accountants’ exemption as an answer to improving the effectiveness of the regulatory environment.
In its review addressing the future of the Tax Practitioners Board (TPB), the Treasury has proposed a model to help establish a new approach to discipline by bringing back the accountants’ exemption and allowing financial advisers to provide incidental tax advice without needing to be registered with the TPB.
Under this model, accountants would be allowed to provide basic self-managed super fund advice and services without having to operate in the AFSL environment.
Almost a year ago, the Institute of Public Accountants announced it was lobbying the government for the return of the accountants' exemption, arguing that its removal barred many of its members from providing guidance to their clients on superannuation.
The accountants' exemption was phased out in 2016 as part of the FOFA reforms. It was replaced with a limited AFSL, which saw many accountants leave the SMSF space creating a gap in the market between full financial advice and smaller matters that has since been acknowledged by the ATO.
“What has come to light is the current licensing regimes are not meeting expectations, and when I say expectations, I’m referring to the government’s own stated policy outcomes with FOFA of accessibility and affordability,” IPA CEO Andrew Conway told Accountants Daily at the time.
“Up until July 2016, accountants were able to advise on what was ostensibly a trust, a business structure, that being an SMSF. Beyond that, what our members have said is that their clients are opting out of advice, because the waters are muddier than they have ever been in terms of what can be on offer,” Mr Conway said.
However, findings of the royal commission have prompted the government to revisit the accountants’ exemption revival.
Last month, Mr Conway reiterated that the current financial services law is depriving Australians from getting the financial advice they need.
"It is nonsensical that if you have a client come to your practice today and ask for advice in relation to investing in plant machinery in their business, for millions of dollars, you can provide advice on that. But the minute the client mentions that they are going to use part of their super, the roller door has to come down.
"We hope the new Assistant Treasurer and the Assistant Minister for Superannuation and Financial Services will listen to this case," said Mr Conway.
The Treasury is now inviting comments from affected professional associations and individuals to assist the review in its preparation of a final report, which is due to be provided to the government by 31 October 2019. The deadline for submission is 30 August.