Financial planners who are looking to membership of the Financial Planning Association (FPA) or the Association of Financial Advisers (AFA) to ensure recognition by the Tax Practitioner’s Board (TPB) as registered tax practitioners may find themselves cut adrift in future.
The TPB has told the Treasury that it no longer believes that it should be recognising professional associations because it does not have the resources or funding to ensure their compliance.
In a submission to the Treasury’s review of the TPB, the board said while it recognised that tax practitioners and their associations were key stakeholders, it was no longer comfortable with existing arrangements.
However, the TPB said it was open to grandfathering for existing tax practitioners.
“…the TPB is of the view that is it is no longer suitable for the TPB to recognise professional associations,” it said.
“Recognition provides the voting members of recognised associations with an additional avenue to become registered as tax practitioners,” the submission said. “If this registration avenue was to be removed, the TPB would support that those tax practitioners who had been registered under the pathway relevant to their recognised professional association should be permanently grandfathered into TPB registration.”
The TPB explained its reasoning for ending the professional associations pathway saying it had limited capacity/capability to “test and assess whether a recognised professional association complies, both initially and in an ongoing sense, with the requirements to become recognised”.
“In circumstances where an association lacks or loses appropriate governance, the TPB has little it may do by way of remediation,” it said.
“However, in these situations where the association is subject to little oversight, the TPB could be seen as a regulator and thereby carry substantial reputational risk.
“While carrying this risk, the TPB charges no fees to associations for this recognition. By way of contrast, the Professional Standards Council, which provides limited liability services to professionals by registering their associations, charges fees to associations in the order of $3 million to $4 million per year.”