Your client is doing the wrong thing, what are your responsibilities?

Members often enquire as to where they stand when their clients are not doing the right thing.  One specific circumstance that recently came across our support lines related to a recalcitrant business owner with unpaid superannuation dating back up to 18 months. The BAS agent had advised the client the correct process for paying these amounts was not to pay to the superannuation fund of the employee, but rather to complete the Superannuation Guarantee Charge Statement and then pay the superannuation liability, superannuation guarantee charge, administration fee and interest to the ATO who then forward the monies to the fund of the individual.  The business owner has ignored this advice and instructed the BAS agent to pay directly to the fund and not to provide the SG Charge Statement to the ATO.

Mr Ian Taylor, Chairman of the Tax Practitioners Board (TPB), stated that in these circumstances the BAS agent needs to ensure that the business owner had been informed of their tax obligations succinctly, in writing, and where the business owner refuses to follow the lawful process the BAS agent should refuse to provide services related to reporting and paying the overdue superannuation payments incorrectly, as this would be in breach of their legal obligations as a registered BAS agent under the Tax Agent Services Act 2009.

“BAS agents must ensure that they meet the obligations under the Code of Professional Conduct. This includes Items1, 4, 7, 10 and 11 which relate to honesty and integrity, acting lawfully, competence, taking reasonable care to apply tax laws correctly and not obstructing the proper administration of taxation laws”, Mr Taylor said.

“In these circumstances, the BAS agent may continue to lodge the BAS for this client as the information about overdue superannuation is not included on the BAS.  However, the TPB strongly encourages BAS agents to consider the relevance of recalcitrant business owners to their practices and the associated risks this brings, such as their obligations under the Code of Professional Conduct which includes an obligation to act honestly and with integrity. BAS agents should work toward educating their clients and then withdrawing their services if the client refuses to comply with the law”.