Why should you use a registered tax agent?

Tax

There are a number of reasons for appointing an Accountant and/or Tax Agent to assist you with preparation and lodgement of your tax return.  For example;

Provide additional time to lodge:

A new client commenced business as sole trader during June 2014 issuing his first invoice on the 30th June 2014. However, he did not receive payment until mid-July and wanted to know what his tax liability would be. They were pleasantly surprised to find out that as they operated on a cash basis that the income would not be counted in their 2014 tax return but rather their 2015 return.  But that wasn’t the end of it. They were even more surprised when I advised them that because they were using a registered tax agent (RTA) that their 2015 Income Tax return would not be required to be lodged until 15th May 2016 under the Tax Agents Lodgement Program. Their tax wouldn’t have to be paid until 5th June 2016. So the tax incurred on income received in July 14 would only be paid 2 years later and the full year’s tax for 2015 would not have to be paid until 12 months later. So they had full use of the funds until then and they could use them in their mortgage offset account to reduce their interest bill.

A word of caution, if you haven’t already appointed a RTA, then to take advantage of the Tax Agents lodgement program you need to appoint them by the October 31.

Trained to know all the deductions available.

A client purchased an investment property with his wife. Because the property was built over 20 years ago, they didn’t think that there would be any depreciation deductions. By advising them to obtain a Quantity Surveyors report, thousands of dollars of deductions were identified and the cost which is also tax deductible was under $600 for the report.

Their fee is Tax deductible in the following year

Yes, they will charge you a fee to prepare your return or provide advice. However, the value they will provide will be of greater value than their final fee.  It also must be remembered that a fee can only be charged for tax matters by a RTA.

Your time is valuable.

If you’re a small business person, you know the value of your time but this can be equally applied to individuals. RTA’s do this for a living and know all the pitfalls.

So why spend your valuable time doing something you only do once a year and run the risk of missing out on legitimate deductions? Even worse, you are still getting it wrong and then having penalties imposed by the ATO. A good RTA will pay for themselves in the long run.

 


Michael Prior

Principal at PB Advisory Group

I am the principal of PB Advisory Group Certified Practising Accountants. We are cloud based accounting & tax specialist for small businesses, their owners and self managed super funds. I am also currently a director of Private Health Insurer RT Health Fund Ltd where I chair the Audit & Risk Committee and are a member of the Business Development Committee.


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