Financial planners giving tax advice
The ongoing saga continues with respect to that portion of the financial planning community without appropriate qualifications being allowed to give wide-ranging tax advice with their financial advice.
The Federal Government has now tabled regulations that allow financial planners who join a financial planning association to give this tax advice without having completed courses in tax and commercial law.
This is even more surprising given the recent Parliamentary investigations into a number of rogue financial advisers. For example, a recent Senate Committee found the activities of some advisers were ‘unethical, dishonest, well below professional standards and a grievous breach of their duties’.
Given that the Committee then recommended minimum education, experience and continuing professional development requirements for the financial planning industry at large, it is illogical that the Government is bypassing some of these conditions for the provision of tax advice.
The problem for those in the industry who are qualified in tax and commercial law, is that the bad apples in the financial planning industry are damaging the reputation of the rest.
The Tax Institute continues to speak with the Opposition and balance of power stakeholders with regards to the important consumer protection risk inherent in these regulations.
I also spoke on with Alan Jones on his radio program and the Richo + Jones show on Sky News. You can listen to these interviews via the following links:
- Monday interview - Alan Jones, 2GB
- Tuesday interview - Alan Jones, 2GB
- Wednesday interview - Richo + Jones, Sky News
Tax measures related to the mining tax
With the repeal of the mining tax legislation last week this has led to the wind-back of tax measures that were to be funded by the revenue from the mining tax. It is extremely disappointing that the Federal Government waited an entire week before providing some certainty to taxpayers and tax professionals with respect to the effective repeal dates for these measures.
The measures include:
- The instant asset write-off amount of $6,500 for small businesses, which has been reduced to $1,000 from 1 January 2014;
- The accelerated depreciation for motor vehicles for small businesses, which has been removed from 1 January 2014; and
- The loss carry-back measure, which has been abolished with effect from 1 July 2013.
Companies who have claimed the loss carry-back offset and are now no longer eligible will be contacted by the ATO, who will amend the affected assessments and taxpayers will not be subject to penalties and interest if payment is made within a reasonable time.
With regard to the repeal of the provisions allowing small businesses asset write-off concessions, those taxpayers who have lodged their 2013/14 income year return under the previous law should now seek amendments to reduce their depreciation claim. The ATO will not apply penalties or shortfall interest if taxpayers request to amend their assessments within a reasonable period of time.
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.