Tax Agent Changes: Impact on Accountants & Clients

The accounting profession is built on trust, ethics, and compliance. As accountants, we must act in the public interest, ensuring integrity and professionalism in everything we do. Recent tax agent changes to the Tax Agent Code of Professional Conduct introduce new requirements that reinforce these principles. At Lemonade Beach, we fully support ethical business practices and view well-structured legislative updates as opportunities to strengthen client trust and industry standards.

Putting It into Perspective

Ethical lapses in accounting have historically caused serious consequences for businesses and individuals alike. These new regulations aim to prevent such scenarios and keep accountants accountable to their clients and the public.

Our Purpose at Lemonade Beach

At Lemonade Beach, we see our role as more than just working with numbers. We dedicate ourselves to serving the public interest and maintaining the highest ethical and professional standards in the industry. Our key motivations include:

• Acting in the public interest – We uphold professional and ethical obligations to ensure fair and transparent financial practices.
• Building trust and enhancing our brand – Ethical behaviour lies at the core of our business, strengthening relationships with clients and the broader community.
• Avoiding ethical dilemmas – By proactively adhering to ethical standards, we prevent compliance issues that could harm our reputation or trigger legal consequences.
• Meeting professional body requirements – As members of professional accounting bodies, we uphold ethical standards and adhere to codes of conduct.
• Instilling trust within the industry – Our ethical culture reassures clients that they are in safe and responsible hands.

The Risks We Face

The Code of Professional Conduct protects both accountants and their clients. Ignoring or failing to uphold these standards can lead to serious consequences, including:

• Financial penalties
• Loss of professional licenses
• Legal action, including potential jail time
• Reputational damage within the industry and client base

Failing to adhere to ethical standards can also erode long-term client relationships and weaken the credibility of the profession. Maintaining a strong ethical culture protects us and ensures that our clients receive the highest standard of service.

The Five Fundamental Principles of Ethics for Accountants

As accountants, we adhere to five key ethical principles:

1. Integrity – Being honest and straightforward in professional and business relationships.
2. Objectivity – Avoiding bias, conflicts of interest, or undue influence from others.
3. Professional competence and due care – Maintaining professional knowledge and skill at the required level to provide competent services.
4. Confidentiality – Respecting the privacy of client information and not disclosing it without proper authority.
5. Professional behaviour – Complying with laws and regulations while acting in a way that enhances the reputation of the profession.

Recent Changes to the Code of Professional Conduct

In July 2024, the Code of Professional Conduct for registered tax practitioners expanded to include eight additional requirements. These tax agent changes affect accountants of all business sizes, with different compliance deadlines:

• Large businesses must comply from 1 January 2025.
• Small businesses with fewer than 100 employees have until 1 July 2025, but must demonstrate genuine steps toward compliance.

The eight additional requirements are:

1. Upholding and promoting the ethical standards of the tax profession
2. Avoiding false or misleading statements
3. Managing conflicts of interest in dealings with government entities
4. Maintaining confidentiality in government dealings
5. Keeping proper client records
6. Ensuring tax agent services provided on your behalf are delivered competently.
7. Implementing quality management systems.
8. Keeping clients informed of all relevant matters.

While these updates aim to strengthen trust and compliance, some in the industry resist them due to their broad scope. Perhaps the most contentious addition is the ‘dob-in’ provision, as conflicting advice exists on its wording and implementation. At Lemonade Beach, we view most additions as an extension of the ethical principles we uphold daily. To prepare, we are reviewing internal processes and equipping our team to meet these new requirements proactively.

Lemonade Beach’s Commitment to an Ethical Culture

We take ethics seriously at Lemonade Beach. Our approach includes:

• Leading by example – Our leadership team embodies the ethical values we promote.
• Ongoing education and training – We ensure our team stays informed and compliant with the latest industry regulations.  CAANZ members must complete annual professional development within the ethics space.
• Ethical performance reviews – Evaluating staff not just on financial performance but also on ethical decision-making.
• Robust policies and procedures – Keeping compliance at the forefront of everything we do.  As members of CAANZ we are required to uphold professional standards including APES110

By embedding ethics into every aspect of our operations, we create a work environment that prioritises responsible decision-making and long-term trust.

What This Means for Our Clients

These changes reinforce the importance of ethical decision-making in accounting. As part of our due diligence, we may ask more questions than your previous accountant, but this serves everyone’s best interests. By ensuring compliance, we protect clients from potential audits and penalties, giving them peace of mind.

For example, if a client provides financial records that appear inconsistent or undocumented, we clarify discrepancies with them. This diligence ensures compliance and protects clients from unintended tax or legal consequences. If a client refuses to comply with tax obligations, including correcting a past false or misleading statement, we may need to disengage from the client. Depending on severity and TASA breach reporting requirements, we may also report the false or misleading statement.

At Lemonade Beach, ethics aren’t just rules—they form the foundation of our business. By embracing these tax agent changes, we continue providing high-quality, trustworthy service while safeguarding the accounting profession’s integrity.