WHERE DO I STAND? > Your Options

If you have decided that the bookkeeping services you provide, or plan to provide, will amount to a BAS service, then your options could be described as follows:

Option 1 - Become a BAS Agent in Your Own Right

Option 2 - Re-structure the way in which your clients are provided BAS Services

Option 3 - Pare Back Your Service Offering

Please click the above links for further information on what each of these options entails.

Option 1 – Become a BAS Agent in Your Own Right

Overview

Section 20-5 of the TASA requires a bookkeeper to satisfy the Board through a formal application process that they meet certain criteria. Firstly, the applicant must be a “fit and proper person”. Secondly, the applicant must satisfy an educational criterion, which at a minimum requires the attainment of a Certificate IV Financial Services (Accounting) or Certificate IV Financial Services (Bookkeeping). Thirdly, the applicant must demonstrate some 1400 hours of “relevant experience” in the past three years.

The 1400 hours relevant experience is reduced to 1000 hours for members of a Recognised Tax Agent Association. Included among these are the Institute of Chartered Accountants and CPA Australia.

The new regime also contemplates the emergence of BAS Agent Associations who may assist the Board by providing Board-recognised courses for ongoing professional education and disciplinary purposes. Importantly, being a member of a BAS Agent Association will not in and of itself confer BAS Agent status on a person unless all other registration requirements are met (including 1000 hours of relevant experience).

The Registration Process

The About Registration page of the TPB web site contains flowcharts, information sheets and application forms relevant to the registration process.

The Role of ABN BAS

If you pursue BAS Agent Registration in your own right, ABN BAS can assist you with:

  • Professional Indemnity Insurance
  • A Technical Helpline
  • A Quality Assurance Framework
  • Quality Assurance Reviews of Activity Statements for which you would like a second perspective.

Please visit our What Does ABN BAS Offer BAS Agents page for further details.

Option 2 – Re-structure the way in which your clients are provided BAS Services

Under this option, the BAS Services provided to your clients are provided not by yourself, but instead by either a Registered Tax Agent or Registered BAS Agent.

As ABN BAS is a Registered BAS Agent, it can play this role for your clients.

There are some important concepts that bookkeepers need to be aware of when using ABN BAS in this way. The ensuing sections discuss the issues of most relevance.

Definition of BAS Service

Under the Tax Agent Services Act, for a bookkeeper to be held to be providing a BAS service, two factors must both be present:

1. The service must relate to:

  • advising on a liability, obligation or entitlement under a BAS Provision (e.g. providing advice on a matter of GST law); or
  • representing an entity in their dealings with the ATO (e.g. submitting a BAS to the ATO on behalf of a client); or
  • ascertaining a liability, obligation or entitlement under a BAS Provision (e.g. preparing a BAS or preparing a set of financial statements that quantify a GST debt);

    And

2. It is reasonable to expect that the client has relied on this.

In terms of the first two concepts of advising and representing, the bookkeeper can ensure these are not fallen foul of by simply not rendering advice to a client on such matters and by not dealing with the ATO on behalf of a client.

In terms of the third concept of ascertaining, the legislation does not define exactly what types of actions would give rise to ascertainment. As a result, the focus is best placed on ensuring that the second factor (relating to reliance) is not present. In other words, ensuring that the second limb (relating to a client reliance on the bookkeeper) rests with ABN BAS and not with the bookkeeper.

To ensure that there can be no doubt in a client’s mind that their reliance is on ABN BAS and not the bookkeeper, ABN BAS provides the following items:

  • Engagement Letter Wording for Bookkeepers – this wording can be used by bookkeepers in their own engagement letters with clients. It delineates the respective roles of the bookkeeper and ABN BAS and makes it clear to the client that their reliance, as far as BAS services is concerned, lies with ABN BAS.
     
  • Client Authorities – authorities are produced by our BAS Wizard software which must be signed by the client prior to us lodging each and every activity statement. The wording for these authorities is provided by the ATO and makes it explicit to the client that it is ABN BAS that is preparing and lodging the activity statement.
     
  • Invoices for BAS Services to the client emanate from ABN BAS – invoices are produced by our BAS Wizard software. The invoice is rendered by ABN BAS to the client for whom we have provided the BAS Service and bears our Australian Business Number. This makes it explicitly clear that it is ABN BAS, and not the client’s bookkeeper, that is rendering the BAS Service and indeed charging for it. The invoice is paid by the bookkeeper on behalf of the client. The bookkeeper should then recoup this outlay from their client.

General Bookkeeping

When it comes to activity statement lodgement, the client’s reliance on ABN BAS has been made clear. However, it is important that the bookkeeper not be held to be providing BAS Services unknowingly in the lead-up to the actual preparation of the BAS. An example is general bookkeeping, such as the coding of tax invoices and transferring of data onto a computer program.

If a bookkeeper is not a BAS Agent in their own right, then in order to not be deemed to be providing a BAS Service, they must be performing services such as the coding of tax invoices and transferring of data onto a computer program, under instruction. Clause 2.42 (and Example 2.12) of the Explanatory Memorandum to the legislation make this clear.

2.42 Not all items of work from the recording of a transaction to the preparation of an approved form (e.g., a BAS) are BAS services. Entering data, coding transactions based on instructions provided and processing payments or preparing bank reconciliations are not BAS services because they do not require the interpretation or application of a BAS provision.

Example 2.12
Francisca is a bookkeeper. She follows instructions from Chris, a registered BAS agent, in coding tax invoices and transferring data onto a computer programme for her clients. Francisca’s work is then reviewed by Chris to check its accuracy. The tasks that Francisca is performing do not constitute BAS services.

The “instruction” referred to above could, in theory, come from the client, or it could come from a Registered Tax agent or Registered BAS Agent.

If ABN BAS is providing BAS Services, we require that the bookkeeper be acting under our instruction by:

  1. Requiring that the bookkeeper use our comprehensive instructional tool entitled “GST & PAYG Ready Reckoner”, which includes coverage of which GST tax codes to apply, payroll postings and PAYG instalment calculations.
  2. Recommending that the bookkeeper remain current with their knowledge by reading and referring to our Bookkeeper Knowledge Base technical library; and
  3. Encouraging the bookkeeper to make use of our technical helpline if, for example, they are unsure about how to record a particular transaction, or unsure which default tax code to apply to an account within a chart of accounts.

Supervision and Control

The notion of supervisory arrangements is introduced in the legislation and is relevant in three areas.

Firstly, the registration requirements to being a BAS Agent require that the entity seeking registration has a sufficient number of individuals, being registered tax agents or BAS agents, to provide BAS services to a competent standard, and to carry out supervisory arrangements. This is of no relevance to a bookkeeper utilising ABN BAS. It is only of relevance to ABN BAS itself in the context of its registration. ABN BAS has four registered tax agents within its organisation.

Secondly, the civil penalty provisions apply where a declaration is signed by a person other than an individual working under your supervision and control. Again, this is of no relevance to a bookkeeper utilising ABN BAS. It is only of relevance to ABN BAS itself in the context of the activity statements it submits for clients. Only the four registered tax agents within ABN BAS will sign declarations.

Thirdly, it has a role to play in the “relevant experience” provisions as they pertain to BAS Agent Registration. These provisions count work performed by an individual under the supervision and control of a Registered Tax Agent or BAS Agent. Whether the relationship between ABN BAS and a bookkeeper amounts to supervision and control is unclear.

In summary, the notion of supervision and control – and whether it does or does not exist in the ABN BAS model – is of no relevance when assessing the legality of the arrangement between ABN BAS and the bookkeeper when it comes to the provision of BAS services to clients.

It will of course be of relevance to bookkeepers who, in the future, seek BAS Agent Registration in their own right and are looking to count towards their relevant experience requirement their dealings with ABN BAS. Even if the bookkeeper’s relationship with ABN BAS was not seen to be one where supervision and control was present, the meaning given to “relevant experience” by the legislation also includes “work of another kind approved by the Board” and it is therefore possible that the ABN BAS experience would count under that limb. ABN BAS has sought further direction from the Board on this specific issue.

Option 3 - Pare Back Your Service Offering

Your final option is to limit the bookkeeping services that you make available to your clients by eliminating BAS Services from your business offerings.

Our What Is a BAS Service? page provides further information on the types of services that do and do not constitute BAS Services. The theme of that page is that the concept of a BAS Service is intended to capture most mainstream bookkeeping tasks except those where:

  • the service is general in nature and not factual to a client’s circumstances (e.g. classroom training);
  • the task does not involve the exercise of judgment or expertise over areas such as GST, PAYG-Withholding, etc. (e.g. bank reconciliations and mere data entry); 

Paring back your services to such an extent will be difficult in most cases, unless you are operating in a highly specialised niche (that does not constitute a BAS Service in and of itself) or you are operating in a sub-contract capacity for another BAS Agent or Tax Agent.