At JRM Weir we don’t hide behind the fine print.
We are required by our professional standards to have terms of engagement with each client that discloses all relevant fees and conditions. We will set out the scope of services to be provided and confirm with you our understanding of the terms of our engagement and the nature and limitations of the services that we provide. Taxation and Accounting services will be conducted in accordance with the relevant professional and ethical standards issued by the Accounting Professional & Ethical Standards Board Limited (APESB).
We are required to tell you that:-
For each client we will estimate fees for the financial year ahead and agree with you the likely costs before we start the work. It includes meeting with you. We would also like you to contact us at regular intervals throughout the year to discuss your affairs and this is included.
Our usual fees are calculated on an hourly rate. Our hourly rates are:
If we consider that our fees will materially exceed our estimate we will let you know. We increase our fees on 1st July each year. An annual revised fee schedule is available on our website.
We are happy to assist you with other accounting matters such as a major change in your circumstances. If this is the case we will discuss with you the likely cost to you.
We will usually send you an invoice when the work has been completed. Accounts are payable within 14 days. We reserve the right to charge interest on overdue accounts.
We include a disclaimer in all our financial reports. The reports are for you to use to organise your financial affairs. There is no assumption of responsibility for any reliance on our reports by any person or entity other than you and those parties indicated in the reports. The reports shall not be inferred or used for any purpose other than for which they were specifically prepared.
As a client of this practice, we are obliged to advise you of your rights and obligations under the taxation laws in relation to the services we provide to you. Set out below is a brief explanation of the main areas of the taxation system you should be aware of. If you have any concerns or issues with any of matters discussed below please feel free to contact us.
The self-assessment system
The Australian tax system operates as a self-assessment system. This means that when your tax return, FBT return or BAS is lodged the ATO accepts the information in the return at face-value and issues you with an assessment notice based on that information. It is important to understand that this does not mean the assessment is final as the ATO can conduct a review or audit of the information provided in the return at a later time, subject to the time limits discussed in the topic below.
The Commissioner’s ability to amend an assessment
As explained above, the ATO accepts the information lodged in your return at face value. However, the ATO also has the power to amend the assessment if they find it to be incorrect. The following rules generally apply:
For most individuals, the ATO can amend an assessment within 2 years after you receive your notice of assessment. If the individual carries on a business and is not a Small Business Entity, that period extends to 4 years.
If the individual is a partner in a partnership or a beneficiary of a trust, the period is 2 years. If the partnership or trust carries on business and is not a Small Business Entity, the period extends to 4 years.
If the ATO amend an assessment this will potentially involve, apart from increased taxes, penalties and interest. If you discover an error in the information declared in the return, lower penalties generally apply for making a voluntary disclosure.
Note: There are no time limits on the ATO amending an assessment where they believe there has been fraud or evasion.
The tax laws specifically require taxpayers to keep records that properly explain the transaction they have entered into.
Individuals claiming deductions for work-related expenses are subject to the Substantiation rules in the tax laws. This requires taxpayers to keep receipts, invoices etc, of the expenses they incur. Where the expenses relate to a taxpayer travelling interstate or overseas, a travel diary may also need to be kept. Where the expense relates to a motor vehicle, a record of the journeys taken such as a log book may need to be kept.
A failure to keep the appropriate records can lead to the ATO denying a particular deduction which may involve the imposition of penalties and interest. Substantiation records must be retained for 5 years.
The tax laws specifically require a taxpayer that carries on business to keep records that record and explain all the transactions they have entered into. This includes all the documents that explain how the income and expenditure of the taxpayer was determined.
Where the tax laws allow or require a taxpayer to make a choice, election, estimate or calculation, documents containing particulars of these matters must be kept.
All these records must be retained for a period of 5 years. There are penalties for taxpayers who fail to do so.
In order for our practice to be able to lodge returns on your behalf, it is your responsibility to provide us with complete and accurate records. Further, in order to lodge your return on time we will require you to provide us the relevant information as and when requested.
Where you are unable to provide us with complete and accurate records, we may be unable to prepare and lodge your return. Tax agents are subject to a Professional Code of Conduct which prevents them from acting for a client where insufficient records or information exists so as to be able determine the amount of the client’s income or deductions.
Because of the ATO’s concerns with dealings in the cash economy, there are particular recording imperatives for clients who operate in that sector. In particular, the ATO has a program of “benchmarking” standardised revenue returns for a wide range of cash businesses.
In circumstances where it is dissatisfied with a taxpayer’s records or recording systems, the ATO will often assess income tax and/or GST on what it considers to be an appropriate “benchmark” amount (plus penalties and interest) and then put the taxpayer to the task of disproving that assessment.
Where that occurs, the taxpayer is at a serious disadvantage and can be put to a great deal of cost and effort in disputing the assessment.
Taxpayers who operate in the cash economy are therefore urged to have a robust and reliable system for recording and reporting all cash transactions and to ensure that the recorded figures are accurate.
If you need assistance in setting up or reviewing your recording and reporting systems, we will be happy to do so and will advise you of our rates for doing so on request.
When preparing your return we may identify one or more issues that are not clear under the tax laws. Where we have pointed out such issues to you, you have a right to request a Private Binding Ruling from the ATO. Upon providing the ATO with all the relevant facts, they will provide you with a ruling setting out their view on the proper tax treatment of the issue requested to be ruled upon.
If the ATO issues you with an assessment that you do not agree with, you have the right to lodge an objection to that assessment. The objection must be lodged with the ATO within either 2 or 4 years. As to which period applies, this is determined in the same way as the discussion above under the heading ‘Commissioner’s ability to amend an assessment’.
Where the ATO issues an amended assessment, the period for objecting is the greater of:
If you remain dissatisfied with the outcome of the objection, you have the right to have the matter reviewed by the Administrative Appeals Tribunal or to appeal the matter to the Federal Court.
It is important to be aware that in any disputed assessment before the court or the Administrative Appeals Tribunal, the onus of proof is placed on the taxpayer. In other words, if the Commissioner asserts that your income should include a certain amount or that a deduction claimed in a return is not allowed, it will be up to you to establish that the Commissioner’s view is incorrect.
The Tax Agent Services Act 2009 (TASA) and complimentary amendments to the applicable taxation administration legislation provide statutory protections for taxpayers who engage registered tax agents.
In particular, as your tax agent we are bound by a statutory Code of Conduct which is administered by a new national Tax Practitioners Board. That Code requires us, amongst other things, to act lawfully in your best interests and with honesty and integrity in the performance of our duties.
In addition, as the client of a registered tax agent, you have statutory “safe harbour” exemptions from penalties in certain circumstances.
– When did the new safe harbour provisions commence?
The ‘safe harbour’ can only apply for returns lodged on or after 1 March 2010.
– How does the new safe harbour work?
In order to benefit from the ‘safe harbour’ should the need arise, it is a requirement for you to ensure that you provide us with all of the relevant tax information. This includes any records, or documents we request from you plus any other information relevant to the preparation of your tax return. The information provided must be compete and accurate.
It is equally important that you provide us with this information by the time it is requested so as to allow the return by its due date. The safe harbour from late lodgment penalties can also apply where a BAS, IAS, or FBT return is lodged late.
– What does the new safe harbour apply to?
Whilst the safe harbour can apply to exempt the penalty for an error made in a tax return, it is important to note that the tax and interest will be still be payable.
– What if the safe harbour does not apply?
Even if you are not eligible for the safe harbour, it is still possible to request the ATO remit or reduce the penalty.
In conducting this engagement, information acquired by us in the course of the engagement is subject to strict confidentiality requirements. That information will not be disclosed by us to other parties except as required or allowed for by law, or with your express consent.
It is a condition of their employment that our staff maintain confidentiality and comply with the requirements of the Privacy Act.
This practice has complied with the Quality Control Standards of CPA Australia. This has been established and maintained in accordance with the relevant APESB standard. As a result, our files may be subject to review as part of the quality control review program of CPA Australia, which monitors compliance with professional standards by its members. We advise you that by accepting our engagement you acknowledge that, if requested, our files relating to this engagement will be made available under this program. Should this occur, we will advise you.
Our liability is limited by a scheme approved under Professional Standards Legislation. Further information on the scheme is available from the Professional Standards Councils’ website: http://www.professionalstandardscouncil.gov.au.
All original documents obtained from the client arising from the engagement shall remain the property of the client. However, we reserve the right to make a reasonable number of copies of the original documents for our records.
Our engagement will result in the production of Income Tax Returns and Financial Reports including Activity Statements. Ownership of these documents will vest in you. All other documents produced by us in respect of this engagement will remain the property of the firm.
The firm has a policy of exploring a legal right of lien over any client documents in our possession in the event of a dispute.
At JRM Weir we think that being up front with our clients about what we do and how much we charge is important. We arrange individual engagement agreements with each client before we start the work.