Consulting firms are being closely examined for recent ethical lapses and misconduct. This has led us to recommit to our values and operational practices, which directly impact the services we provide to our clients.
We want to make sure that we are providing the best service. Our commitment to our values and operational practices helps us achieve that goal.
Confidentiality and integrity
Confidentiality is important. When you engage with a service provider under the premise that they agree to keep information confidential, you should expect them to follow through with that agreement, unless legal requirements dictate otherwise.
Integrity is also essential. It goes beyond simply following the law and includes ethical decision-making, such as avoiding actions that conflict with our personal values. Ultimately, it's about being mindful of the people we choose to be.
Tax advisor misconduct
After the recent spotlight on tax advisors the Government has announced proposed changes to the promoter penalty regime. These rules hold advisors accountable, rather than taxpayers, for promoting tax exploitation schemes.
A tax exploitation scheme is where a tax advantage is claimed that isn't reasonably arguable under the tax laws. Promoting this involves actively marketing the scheme while earning a fee.
The promoter penalty regime is set to broaden, with the maximum penalty for promoters of tax exploitation schemes to increase significantly, from $7.8 million to $782.5 million. Further, the time limit for initiating proceedings will be extended from 4 years to 6 years.
In addition, the Tax Practitioners Board's regulatory powers will be strengthened, and additional safeguards for whistleblowers of tax agent misconduct will be put in place. The Government will conduct a comprehensive whole-of-government review surrounding the regulation of consulting and auditing firms, the utilisation of legal professional privilege, and the ATO's information-gathering powers. The review is expected to make recommendations over a 2-year period.
Providing advice on your tax affairs in the usual manner does not violate the promoter penalty regime. Independent and objective advice about a tax exploitation scheme (that was presented to you by another party) is also not a violation.
This highlights a fundamental principle of Nexia's approach to tax advice – we offer specialised tax advice that benefits your business and provides you with the information you need to make informed decisions. We provide clear and concise advice to manage one of the most significant risks in your business, delivering genuine value to you.
Nexia Australia’s tax advisory services manual
Nexia Australia’s body of Quality Control manuals includes a tax advisory services manual which governs our conduct and processes when providing specialist tax advisory services.
It encompasses engagement acceptance, risk assessment, documenting of research and support, and circumstances requiring an additional layer of internal review. Our manual goes beyond adhering to ethical and professional standards and mitigating the risk of providing inaccurate advice; it also aims to empower our team to maximise the value delivered to our clients.
ATO access to your tax advice
The ATO has an administrative policy known as the Accountants' Concession. Under this policy, the ATO will access tax advice only under specific conditions. This policy is designed to provide you with the confidence to seek tax advice, assured that the ATO will not utilise its information-gathering powers to access that advice (except in exceptional circumstances).
These factors ensure that we operate under a framework of conduct protocols, both external and internal. You can trust the advice we provide.
Closing thoughts
It's important to acknowledge that most tax practitioners conduct themselves with honesty and integrity and uphold ethical and professional obligations under the Accounting Professional & Ethical Standards Board and the Code of Professional Conduct in the Tax Agent Services Act 2009. At Nexia Australia, we maintain our own comprehensive quality control manual specifically tailored to tax advisory services.
Please speak with a trusted Nexia advisor about how our specialist tax advice can help you achieve your goals.
