Financial (Tax) Advisers ‘invisible’ to ATO
Financial advisers working in the tax arena are ‘largely invisible’ to the Australian Taxation Office (ATO), according to the Financial Planning Association (FPA).
The FPA has used its submission to the Inspector-General of Taxation’s Review of the Future of the Tax Profession to argue that Tax (Financial) Advisers (TFAs) are largely invisible to the ATO because its systems have been built around interactions with tax agents.
“It does not appear to consider or apply to TFAs and the services they provide their clients,” the submission said. “This approach is vastly different to other Government agencies, such as Centrelink, where the role of financial planners in helping both clients and the department is recognised and catered for.”
“We understand that the ATO’s digital transformation process received recommendations that TFAs be included into the ATO system, however at this stage there is no ability for taxpayers to appoint their authorised TFA to liaise with the ATO on their behalf in any capacity,” it said.
“Under the Corporations Act, financial planners are required to provide financial advice that is appropriate for the client’s circumstances. This is reliant on accurate client information. The ATO holds accurate client data particularly in relation to tax, income, superannuation and investments,” the FPA submission said.
“However, TFAs are currently not able to access the client data held by the ATO. Rather they must either rely on their client’s accountant to pass on the required information, seek information from product providers (e.g. superannuation funds), or seek the information directly from their client.”
The FPA submission claimed this meant TFAs were reliant on product providers, accountants and clients to pass on data that was most accurately held by the ATO, noting that there had “been many incidents where the information provided to TFAs by super funds and other product providers has been inaccurate, creating a liability for financial planners and clients”.
The FPA has recommended to the Inspector-General’s inquiry that Tax (Financial) Advisers be permitted to access client data held by the ATO and be permitted to act on behalf of their clients with the ATO, particularly in relation to superannuation matters.
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