Recent Tax Agent Changes: What It Means for Accountants & Clients

The accounting profession is built on trust, ethics, and compliance. As accountants, we have an obligation to act in the public interest, ensuring integrity and professionalism in everything we do. Recent 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 see well-structured legislative updates as an opportunity to further strengthen client trust and industry standards.

To put this into perspective, ethical lapses in accounting have historically led to serious consequences for businesses and individuals alike. These new regulations are designed to prevent such scenarios and ensure that accountants remain 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 are dedicated 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 are bound by professional and ethical obligations to ensure fair and transparent financial practices.
• Building trust and enhancing our brand – Ethical behaviour is at the core of our business, strengthening our relationships with clients and the broader community.
• Avoiding ethical dilemmas – By proactively adhering to ethical standards, we prevent compliance issues that could lead to reputational damage or legal consequences.
• Meeting professional body requirements – As members of professional accounting bodies, we must 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 exists to protect 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

Beyond these direct risks, failing to adhere to ethical standards can also erode long-term client relationships and undermine the credibility of the profession as a whole. By maintaining a strong ethical culture, we not only protect ourselves but also ensure 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 was expanded to include eight additional requirements. These changes impact accountants of all business sizes, with different deadlines for compliance:

• 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, they have been met with some industry resistance due to their broad scope.  Perhaps the most contentious addition is the ‘dob-in’ provisions as there is various conflicting advice on how this provision is written and how the regulator has indicated they will implement.  However, at Lemonade Beach, we see most of the additions as an extension of the ethical principles we already uphold daily. To prepare, we are reviewing our internal processes and ensuring that our team is well-equipped 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, you may at times find that we ask more questions than your previous accountant, but this is in everyone’s best interest – yours and ours. By ensuring compliance, we protect our clients from potential audits and penalties, giving them peace of mind in their financial affairs.

For example, if a client presents us with financial records that seem inconsistent, or it doesn’t appear to have been documented, we will take the time to clarify the discrepancies with them. This diligence not only ensures compliance but also protects the client from unintended tax or legal consequences.  If a client is not willing to comply with tax obligations, including correcting a past false or misleading statement, we may need to dis-engage the client and, depending on the severity and the application of TASA breach reporting requirements, we may be compelled to report the false or misleading statement.

At Lemonade Beach, ethics aren’t just a set of rules – they’re the foundation of how we do business. By embracing these changes, we continue to provide a high-quality, trustworthy service to our clients while safeguarding the integrity of the accounting profession.