Accountants face client backlash over blizzard of tax changes
Revised rules require fresh advice but clients often blame their tax professional, says Tim Munro.
Accountants have emerged from the pandemic into a blizzard of changes and keeping clients up to date risks a backlash over tighter compliance rules and increased fees says Tim Munro, CEO of Change Accountants and Change GPS.
Speaking on the latest Accountants Daily podcast, he said accountants worked hard to keep small businesses alive during COVID-19 only to be “suddenly bombarded from all different angles”.
“It is just insane what accountants are facing right now,” he said. “We’ve got professional firm profits, we’ve got section 100A, we’ve got payroll tax changes, we’ve got things like working from home deductions and changes, we’ve got things like [the] Owies case which affect family trusts.
“…These are monumental changes some of them, affecting a lot of our clients all at the same time and I fear that accountants – unless they put enough time and maybe technology into their businesses to help them to do these things – they won’t be able to give clients the advice that the clients need, and they will end up down the track having problems with clients if the ATO doesn’t like the approach that’s been taken.”
He said some accountants were “scared” of telling their clients that things had changed and they would need to charge them for new advice.
“Because they say, ‘Oh, but my client will tell me, you set it up for me like this in the past, you’re telling me that advice was wrong?’
“They don’t know how to explain that life has changed and circumstances have changed to their clients.
“It’s like a mobile phone – no matter what brand of phone you have, once a month there’s a software update. There’s little tweaks, things change all the time, maybe fix something that was broken, not quite right. That’s a normal part of life.
“Accountants need to get into the habit of explaining to their clients, ‘Look, I don’t make the tax laws. I don’t interpret things like the ATO does. But when they do, I’m here to explain to you what has changed and your options for what you need to consider. And that way, you’ll keep on the good side of the ATO.’ The podcast was recorded prior to PCG 2023/1 on work-from-home deductions and the revised 1 March start date stricter record-keeping requirements. However, Mr Munro said it was one example of how accountants faced a dilemma when draft regulations specified changes that might be amended later.
“We’re in this limbo-land between draft ruling and final ruling where things might change – that makes it incredibly difficult to advise clients.”
“Sometimes, you might need to tell your clients to keep invoices for everything and we’ll work out at the end of the year if we’re going do an actual claim, or the claim that the ATO will allow you per hour. You don’t know until we get to the end of the year.”
“The accountant can only go so far. We can tell our clients, you need to do this. But if they don’t keep those invoices, if they don’t keep those records, then there’s nothing that we can do, we mightn’t be able to claim certain things.
“And that’s when the clients will blame the accountant – I’ve seen happen so many times.”
20 February 2023