FPA slams last minute tax changes
The Financial Planning Association (FPA) has slammed last minute changes to the GST and Ralph inspired new tax system which will slug planners with thousands of dollars of compliance costs.
The Financial Planning Association (FPA) has slammed last minute changes to the GST and Ralph inspired new tax system which will slug planners with thousands of dollars of compliance costs.
FPA chief executive Michael McKenna has described a senate committee’s finding and a tax office ruling as “ridiculous” and “unwarranted”.
“What we basically have here is a circus. It is going to result in no net revenue to the tax office and a huge loss to the industry,” McKenna says.
Under the Alienation of Personal Services Income legislation, planners will be pe-nalised by the Australian Tax Office (ATO) for receiving payment from a dealer group as a proper authority holder.
The Financial Planning Association (FPA) has argued that many planners are cov-ered by this arrangement due to the current Corporations Law requirements.
McKenna says planners are in a Catch-22 situation because Corporations Law re-quires one set of practices and the proposed legislation penalises them for follow-ing that law.
He says the new legislation adds further burdens to planners who will need to seek two determinations in a six month period as a result of CLERP6 reforms.
In a further last minute change, the ATO has instructed proper authority holders that they will need an Australian Business Number (ABN) for both their business and one for each proper authority holder.
McKenna says this stipulation is unwarranted and will be eliminated by the intro-duction of the Financial Services Reform Bill (CLERP 6) on January 1, 2001.
He is also surprised at the timing of the ruling given by the tax office with the FPA not aware of the ruling until June 5, almost a week after the formal ABN deadlines.
AUTHOR
Jason Spits
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
