Episode #50 Unregistered Bookkeepers Providing BAS Services
Why can only some lawfully offer BAS services?
If you discover an unregistered bookkeeper providing BAS related services, should you dob them in? And what CAN an unregistered bookkeeper legally provide anyway?
In an insightful episode Amy shares her personal experience, along with her professional opinion about when, why and how to report unregistered bookkeepers to the Tax Practitioners' Board.
The real message of this episode is: “As professionals we need to educate ourselves and others. And when we speak the truth, let's do it with empathy and good motives.”
Host: Amy Hooke
Guest speaker: None
Topic: Unregistered Bookkeepers Providing BAS Services
Amy Hooke: Good morning. Thank you for joining me again. Today I'm going to be speaking to you about something very personal. I'm going to be sharing with you my secret about BAS agent registration, and more specifically, I'm going to be talking about bookkeepers who are working as basically in BAS agent role, but they're not registered.
Amy Hooke: I've never actually shared this before so publicly, but I thought to do it after I'd commented on a post in another group last maybe, yeah, about a week ago. Because someone had posted in this group about whether they should dob in a BAS agent or bookkeeper who's not registered as a BAS agent.
Amy Hooke: There was a comment on the thread, which was made by a Matthew Addison, from the ICB. He made a comment, “Most bookkeepers don't know that working unregistered is illegal.” Or he said, “Most bookkeepers don't know it's illegal.” But referring to working unregistered.
Amy Hooke: When he said that, it actually gave me the courage to share my story because I'd always thought about sharing it, but I guess, I was actually a bit worried about sharing it because I didn't want people to think I was unprofessional. I knew that it was something that was frowned upon and so I was actually ashamed that I had worked as a bookkeeper without being registered.
Amy Hooke: I also was a bit worried of how confessing something like this could actually affect my career or even potentially affect my current BAS agent registration. I guess the thing that made me feel confident to share it, is because Matthew Addison does have a level of authority in the bookkeeping industry in that he is very highly involved in the Australian Taxation Office, in the Tax Practitioners Board, and other organisations. He does a lot of work on behalf of BAS agents and bookkeepers.
Amy Hooke: Also, just being a member of the ICB, I joined the ICB not that long ago, quite recently, I think maybe about five or six months ago. I didn't actually know, but they have a members only Facebook group and I've been a member of that group. I haven't really interacted too much in the group just yet, but I've really found it a very good group. Because it's a group where you can ask technical questions about bookkeeping without fear of being judged or looked down upon, which really like.
Amy Hooke: I do attribute that to the leadership of the group. There's all kinds of groups out there on Facebook, whether they're bookkeeper's group, or whether they're business groups. The why that members treat each other in the group really comes down to the leadership in the group. Because the leadership set the tone and they set the rules.
Amy Hooke: Often when you find groups where people are belittling one another, or they're judging one another, or they're harsh towards each other, or they're posting a lot of drama, or they're posting a lot of negative things, they may be complaining in a way that's not constructive. I think complaining and venting has its place in groups, but it's got to be from a constructive point of view and a view of wanting to receive feedback from others and get their input into things and something that we're willing to take on their feedback and everything.
Amy Hooke: When I joined this group, I didn't really know much about ICB or any of the staff at ICB. And since I joined that group, because I'd only seen Matthew Addison interacting with bookkeepers in other groups, and so I didn't really know that much about what he did or who he was. But being in his private group, which is part of the ICB, I got to see a bit more of him and the way that he interacts with the group.
Amy Hooke: And I thought, “What a generous, knowledgeable person who really does dedicate a lot of time into supporting bookkeepers and BAS agents and really going into bat for us against the higher up authorities such as the TPB and the ITR.” So it was something about him saying that most bookkeepers don't know that it's illegal, that gave me the confidence to be able to share my story.
Amy Hooke: I hope that by sharing this story, because I'm sure there'll be people listening on this podcast right now who have been in the situation that I've been in, or perhaps they've come across a bookkeeper who's working unregistered. So I think regardless of where you're at you will learn something new about this.
Amy Hooke: I really hope that the outcome of this podcast will be a change of heart of both people who are risking the businesses that they're working with and they're risking their own profession by working unregistered. But I also hope to change the hearts of those who think that the only solution to and on an unregistered bookkeeper is to report them to the TPB and to stand in a place of judgement against them.
Amy Hooke: Out of this little exercise, as I started to type out my thoughts on this topic, I actually thought it would be really helpful to put together some kind of a checklist on how to approach someone who's not who's not registered. So I've actually put something together. It's not fully formed yet, but it's just really my thoughts at this stage. So I'd love to get your input on that. I will document it into a checklist that you can actually get a copy of.
Amy Hooke: Then I would love to actually get input from you. I would actually plan to say if I can get input from the ICB on what their thoughts are for it. Because I think that by putting a process in place for this on how to approach somebody, could actually really win over the heart of a bookkeeper who thinks it's okay to work unregistered.
Amy Hooke: So I'm going to share my story. I'll share that checklist and I'm going to share also the reasons why. I'm not just going to leave it at, “You shouldn't do this.” But I'm going to explain the reasons why, and I'm also going to talk about what about a BAS agent and the bookkeeper are actually allowed to do. Because as you're listening to this, you might be thinking, “Well, I'm doing certain bookkeeping tasks, but I'm not actually preparing and lodging the BAS. So this doesn't apply to me.”
Amy Hooke: But I want to really make it clear on what a BAS agent can and can't do. Sorry, what a bookkeeper who's not a BAS agent can and can't do so that you will know where you sit in this discussion. Then you'll know how to take on both the feedback that I'm going to give you. You'll be able to know, “Okay, for sure this doesn't apply to me, so I don't need to take any action.” Or you will think, “This does apply to me and I do need to take some action.”
Amy Hooke: Or you might be a BAS agent already and you'll get some information that will be helpful to share with your clients. And it will also be helpful to be able to share with other bookkeepers who are unregistered in the future, especially if you're deciding to follow the process that I've put together and speak to that person directly, instead of complaining about them in a Facebook group.
Amy Hooke: Which I feel is unproductive, especially when it's coming from a place of judgement and it's not coming from a place of, “Hey, I found out this bookkeeper's doing this, what should I do? How can I approach them, how can I have this conversation with them?” Or to answer that question, “Should I dob them into the Tax Practitioners Board?”
Amy Hooke: But firstly, I'll share my story. So for those of you who don't know my background, I was about to say I grew up in an accounting firm, in my bookkeeping career, I certainly did. I did grow up in bookkeeping, I started doing bookkeeping around the age of maybe 12 or 13. I used to work for my dad's business on school holidays. Doing bank reconciliations, following up overdue invoices. Can you imagine a 12 year old on the phone doing debt collection? I loved it.
Amy Hooke: And even making spreadsheets to calculate import costs and profit on various items. I'd put in checks into NYB do the bank… It was just, I was doing bookkeeping type tasks when I was quite young. Also setting up filing systems in my dad's office with his accountant. So that's going to be, let's say in four years time when I'm 42, that will be 30 years that I've been doing bookkeeping.
Amy Hooke: I also started studying accounting at school and computers and financial mathematics, all of those subjects I started studying at school in year eight. So around that time, which is what sparked my interest in becoming, at the time I wanted to become an accountant. Dad said to me, “Why don't you come into the office and work with our accountant and see if you like it.”
Amy Hooke: From there I worked on and off for dad's business, in school holidays and not really a full time job or anything like that. When I was 19, I got a traineeship in accounts payable. So I worked for a manufacturing company, in semi-trailers and we had a very large accounts payable. My job was to reconcile the invoices in our system to the supplier statements and work out how much we needed to pay each month and then provide that information to my boss.
Amy Hooke: I joined this company in 2000 which is when GST came in. So my job was to add in ABNs to all of the supplier records as well. That was quite a fun little project. I think that was my very first project when I started working for the company and I absolutely loved doing this job. Then as time moved by, I got into a little bit of managing the cash sales that came through from our service department. So we manufactured semi-trailers and we also service semi-trailers. So we had two different departments there.
Amy Hooke: But the main focus was in accounts payable. Then after I learned the skill of reconciling, my job was also to enter all of the supply invoices when they came in and writing a lot of checks. So I finished [inaudible 00:11:36] in office administration during that 12 month period. After I finished my traineeship, I was offered a full-time job in that company and I stayed there for about four or five months.
Amy Hooke: Then I left because I got a job in an accounting firm, which I really couldn't believe. I'd applied for the job because I wanted to move into the city and I was very surprised that I got offered a job in an accounting firm, especially because I didn't have a degree yet. I was a little bit shocked. I went to the job interview thinking I don't even know why I'm going for this job, and I got the job.
Amy Hooke: My job in that accounting firm was to prepare tax returns for sole traders, companies, trusts and superannuation funds. Obviously, not all at the start, but eventually that's what I was doing. So I worked in that accounting firm for on and off, if you add up all of the time that I worked there, it's like 10 or 12 years. I was there for, yeah, definitely at least a decade.
Amy Hooke: So I worked in tax for about two years. I also did a bit of bookkeeping or what they call bookkeeping and accounting firms, which is basically just tallying up, making a summary of the bank reconciliation, and categorising all of the expenses, and then coding them into their system and making any adjustments. So there was no checking tax invoices or anything like that.
Amy Hooke: Then after I'd been there for about two years, I said to my boss, “I'd like to go to uni and get my accounting degree.” Because I wanted to become a chartered accountant eventually. So the next step for me was to do my accounting degree. My boss said to me, “Well, I've got an idea while you're at uni, why don't you do some bookkeeping?”
Amy Hooke: He said, if I did bookkeeping, I could actually be out and about on-site with the clients. A lot of the clients were sort of in the area where I lived. So he said I could go out on-site and then after I'd finished the job on-site, I could go home and do my study, or go to uni, or I could do a bit of work from home if I wanted to. And I thought, well, that sounded great.
Amy Hooke: The hourly rate was a lot higher than my accounting work, which I thought was pretty cool. Obviously I was a contract for the time, so didn't understand that probably if you subtract all the entitlements and that kind of thing, it might not have been a higher hourly rate. But, yeah. I started that out, I think my first bookkeeping job was like $16 an hour, but quickly moved to 20, 25 and eventually 30, 35 and $40 an hour over time.
Amy Hooke: So I really loved that because I liked getting out of the office. It was really nice to go out and be in different places and then go off to uni, do my study, do a bit from home. So during that initial season, I didn't really do too much tax work. I would just help out if there was a bit of an overflow and I was always the expert in the firm. So whenever someone needed help with NYB, they always came to me.
Amy Hooke: So the bookkeeping practise was actually owned by the same owner and he'd also gone into business with a bookkeeper, but it wasn't under the name of the accounting practise. They created a new name, but their office was in the same office and that kind of thing. So often what would happen is my boss would, he'd subcontract me out to different businesses and then at some point the businesses might say to him, “We'd like to hire Amy directly.”
Amy Hooke: So what he would do is he'd charge them a large fee to, release me and then I'd work for them directly as a contractor. Now this was before the requirement to become a BAS agent had come in. So there wasn't any requirement. I could just go out there and work as a contractor for any company and it was legal.
Amy Hooke: Then what would happen is, at some point when they needed to hire an employee and I didn't want to work as an employee, I would go back to the accounting firm and into their bookkeeping practise and do work through them again for new clients. Then the same thing would happen over again. At some point I got offered a full-time job with a company that was listing on the stock exchange and they offered me a full-time job there
Amy Hooke: Because I was assisting their accountant there and their accountant decided that when they listed on the stock exchange that he wasn't at the level they needed to be their CFO. So they knew they had to hire a CFO and then he decided to move into State anyway and he wasn't going to take the job. I took his job as the accountant who was supporting the CFO. But still in a senior bookkeeper role. I still did all of the bookkeeping as well as the assistant accounting work. Assisting with the audits and preparing the annual reports and things like that.
Amy Hooke: This was a great job, I worked there for a year and a half. Then I got hit by a car and I broke my neck. At some point after that injury, I really struggled at work and I decided to go back, because I hadn't finished my degree. I decided to go back to uni and finish my degree, so that was 2009. So originally when I'd gone to uni, I did my first year, but I actually stopped.
Amy Hooke: Because I thought, “I'm a bookkeeper, I love bookkeeping, I don't really need a degree.” And I decided to stop. But at this point I thought, “Well, I'm unable to work, I'm interested in accounting again, so I'd like to finish my degree.” So I went back and I actually really struggled through uni, it was a really hard season because of the injury that I had.
Amy Hooke: I had to have disability support from the university so that I would have extended time for exams, or I'd be able to use a computer, or I'd have to have a special chair and things like that. So it was a really hard season and it was a hard season financially as well. I was on a study at the time, or I think it was on study or might have been on disability. Not a disability pension, but like a sickness allowance for if you get some kind of an injury or something like that.
Amy Hooke: So I was studying, had a fairly low income and I was looking for way to supplement my income and there was a coffee shop right near my uni. I used to go there every day and the guy that worked there was really friendly and he used to chat to me all the time. He'd say, “Hey, what are you studying?” I said, “Accounting.” He said, “Oh, yeah, I need some help with my bookkeeping and tax returns.”
Amy Hooke: I was like, “Oh, okay. Yeah. Cool. I can do it.” Now, by the time this happened, it was 2010. March, 2010 was when the requirement to a registered BAS agent came in. I graduated at the end of 2010 so it was during that year. I had heard something about it. So back maybe, it must've been a couple of years before or no… I apologise. Actually at that time I was also doing a couple of clients for that accounting firm.
Amy Hooke: It was during that sort of 2009 season, that I'd heard something about bookkeepers having to be registered. But I didn't really take it seriously or I didn't know if it was serious and I figured that if it did come in, somebody would tell me. So I sort of about it, but I sort of didn't know about it. So when this coffee shop asked me to work for them, I said, “Well, yeah.” I sort of thought, “I don't know if I'm allowed to do this.”
Amy Hooke: So I said to them, “Well, can you work with me through the accounting firm that I work at?” So I sent them what my rates were and they didn't want to pay those rates. So I was that, I think they were going to have to pay like 40 bucks an hour, which was way cheaper. I gave them a big discount, but I was going to be getting 25 out of that. I thought that was the cheapest I could go and they didn't want that. So I thought, “All right, well I'll work for them directly for 25 bucks an hour as a contractor and I'll just do it for them.”
Amy Hooke: I figured technically it was my client, it was nothing to do with the accounting firms, so I knew that I could take that client directly. But then I was providing services to them that required me to be registered. But because I hadn't really taken it seriously, I just thought, “Oh, it doesn't apply to me.” I don't know why I thought that. It was just kind of where I was at the time.
Amy Hooke: So I provided them with all kinds of tasks that are actually restricted by non-BAS agents. So including BAS preparation. So when I did their BAS preparation, what I would do is I would give them the numbers for the BAS. I'd say, “I don't think I'm allowed to lodge your BAS, so you have to lodge your own BAS.” So what I'd do is I do all the bookkeeping and then I provide them with the figures, but I didn't lodge it, just gave them the numbers and then they filled it out.
Amy Hooke: Well, so I didn't actually know, or the way that I explained it or thought that I could get around this was to provide them with the numbers and then they fill out the form and then technically I'm not preparing or lodging their BAS. I didn't actually realise it was only, a couple of weeks ago actually, where I really sat down and dug into, “Okay.” I sort of vaguely knew what a bookkeeper and a BAS agent can and can't do, but I'd never really looked that deeply into it.
Amy Hooke: I wanted to put something together because I needed to inform some of my potential clients about this. So it wasn't until I did this a couple of weeks ago that I realised that providing the numbers for a client to fill out their own BAS is considered to be providing a BAS related service, which is not allowed to be performed by a non-BAS agent. There's also an understanding or a misunderstanding from bookkeepers who think that they're just not allowed to charge for the BAS service. Okay?
Amy Hooke: But I'm going to tell you what it says on the Tax Practitioners Board website and this might be paraphrased, because I've put together a little article for my clients that explains it in a bit more everyday language. So here it's, “Legally any bookkeeper providing a BAS related service or any service related to a BAS provision must be either, registered with the tax practitioners board, supervised by a registered BAS agent or tax agent, or a PAYG employee of your company”
Amy Hooke: When I say your, I'm speaking to the business owner. Actually, that first line is from the tax practitioners board about providing a BAS related service or any service related to a BAS provision. Okay? So I thought, “Well, what is a BAS provision? I need to be really clear with the client.” What is a BAS provision? So a BAS provision includes, GST law, one equalisation tax law, luxury car tax law, fuel tax law, fringe benefits tax law related to collection and recovery only, pay as you go, PAYG withholding and PAYG instalments.
Amy Hooke: So any services related to a BAS provision, aka anything on that list, is restricted to the person needing to be a registered BAS agent. Or if they're not a registered BAS agent, to be supervised by a registered BAS agent or a tax agent, or to be a PAYG employee of the business. When I read that and I was putting that information together, I realised just how many tasks that I was doing as an unregistered bookkeeper, were actually outside the scope of what I was allowed to do.
Amy Hooke: During the time of working with this business owner as well. also processed paying their employees. Now when I say employees, they were not legal employees, they were cash on hand employees. So I said to the business owner, “You cannot be paying them cash in hand, if you do, this is not deductible. Also you're putting your business at risk because they're not protected. You need to be paying PAYG and putting them through the books correctly.”
Amy Hooke: Now by doing that, I was actually breaching, what I'm allowed to do. That was a BAS provision, what I was doing there. I was advising the client about needing to calculate PAYG. I did a summary, so because when I told the client they wanted to know, “Well, how much are we going to have to pay?” So I put together a summary and it included the amounts of PAYG and superannuation. They looked at they said, they didn't want to do that.
Amy Hooke: The other thing I was doing was, I was advising them about what was and was not deductible. When I'm talking about deductible, I'm talking about GST, claiming the GST, and I'm also talking about whether it's a tax deduction or not. So in that scenario, I was providing a BAS provision to the client, while providing advice to them about GST coding. Which a non-BAS agent is not allowed to do.
Amy Hooke: If a bookkeeper is processing some bookkeeping and they're not sure whether something should have GST on it or whether the client can even claim it, they need to be supervised by a BAS agent, or have a BAS agent or tax agent make that decision. I thought it might be helpful at this point to actually go through the detailed list of what is considered to be a BAS related service. Not just from my example, but also from what the Tax Practitioners Board says.
Amy Hooke: Again, this is a paraphrase. So what I've done is I've taken, there's a checklist, I'll include the link in the podcast and the link is all about information on what is and what is not a BAS related service according to the Tax Practitioners Board. Here I've put it together in a more simplified summary. I've just basically, I've kept all of the items, I've just worded them in a bit more of a simple way. Just sort of everyday language because it's for providing to business owners who don't necessarily need all the jargon.
Amy Hooke: Here's the list of things that a BAS agent can do. I apologise. It's not just what a BAS agent can do. This is what an unregistered bookkeeper who's not a BAS agent, or not supervised, or not appear PAYG employee cannot do. Okay? So if you're not registered, you cannot apply for IBNs and you cannot update GST or PAYG withholding registration statuses. So if someone's registered, you can't register them, and if they're registered and want to de-register, you cannot de-register them. If they decide to take on a PAYG employee, you cannot add the PAYG withholding to the registration.
Amy Hooke: You also can't advise them about whether they should. That includes, an example would be looking to say, “Oh, you guys are over the threshold. You really need to get registered for GST.” Or, “Now that you're taking on employees, you need to register for PAYG.” You cannot give that advice if you're not registered.
Amy Hooke: The next thing that you cannot do if you're not registered, and you can do if you are, is coding transactions, tax invoices and transferring data into a computer programme for clients requiring the interpretation or application of a BAS provision. So again, remember what's on that list of BAS provision. So, “If the client is not registered for GST, you may code transactions and tax invoices. If the client is registered for GST, you cannot interpret or apply a BAS provision.” So you cannot apply anything that comes under GST law, or PAYG, or any of those other items that I mentioned. So if you are doing these things, you need to be supervised by a BAS agent.
Amy Hooke: The other thing that you can't do is, adding figures to, completing, or lodging the BAS. So, the way that I got around that when I was working was to not complete and lodge the BAS, I'd just give them the numbers. I would not fill out the form, I'd say, “Here's the numbers, fill out the form.” But here's the next item. Providing figures to a business owners so they can complete their own BAS. That is not allowed. That is considered to be providing the BAS service. Providing advice regarding GST coding, again, similar to what I mentioned before.
Amy Hooke: Determining and reporting superannuation guarantee, so that's basically superannuation. So the superannuation guarantee is the amount of super that's put aside for employees when they work their hours, which is currently 9.5%. So you cannot determine or report superannuation guarantee, which basically rules out processing payroll. Processing, setting up super through a clearing house or accounting software. That includes, going into Xero and grubbing the payable amounts and clicking them and lodging them through the Xero superannuation portal. Through the clearing house or any other clearing houses.
Amy Hooke: Completing and lodging a taxable payments annual report. So that's your TPAR. So that's where you're reporting all of the ABNs and the amounts and the names of the contractors. This is related to those in the trade and construction, related to all of their contractors. It also now applies to anyone who's providing a cleaning service.
Amy Hooke: The other thing you can't do, is send employee tax file declaration, tax file number declarations, TFN declarations to the tax office. You can't provide any payroll service, which involves applying PAYG withholding, or fringe benefit tax. That basically again, rules out any processing of payroll. Also, you can't provide payroll services involving interpreting and applying a BAS provision, including reporting of employee payroll information through the use of STP enabled software.
Amy Hooke: Finally, payroll compliance reviews. So providing an assessment or an opinion as to whether the client is compliant with one or more BAS provisions. An example that I would give, is before how I looked at that client's payroll and said, “Hey, you can't pay cash wages.” And I guide them a summary saying, “This is the PAYG you'd have to pay in the superannuation.” Or going through and reviewing someone's file and saying, “Hey, you're over the threshold. You need to actually register the GST, and this is how much she would if you registered.”
Amy Hooke: At this point you might be thinking, “Oh my goodness, what actually can an unregistered bookkeeper legally do for our business” It's sort of seeming like that rules out pretty much everything. So it really does come down to the fact that non-registered bookkeepers are very limited in what they can do unless they're supervised by a BAS agent or tax agent, or they're a PAYG employee of the company.
Amy Hooke: If you're in this position now, you'd probably be interested in looking at getting supervised because here's what you can do. You can install a computer accounting software without determining default GST code. So you could set up a client's Xero file, but you can't touch the GST codes.
Amy Hooke: You can code transactions, tax invoices and transfer data onto a computer programme for clients through a process that does not require the interpretation or application of a BAS provision. Or more simply said, processes that do not require the interpretation or the application of GST, PAYG and all of those other tax laws. Basically that comes down to businesses that are not registered for GST. You'd be able to do those things.
Amy Hooke: I would say you could probably get around it by, let's say you are using a software bought from receipt bank and you'd go in there and you don't look at the GST codes, you just publish everything and then you leave it for the client to check the GST codes or a BAS agent to check them, which I think is not really going to work and probably.
Amy Hooke: Yes. The other thing you can do is general training in relation to the use of computerised accounting software that's not related to a client's particular circumstances. So you can do general training. So as opposed to showing a client how to enter a tax invoice and just select the correct GST code, which you would not be allowed to do, you would be able to do general training. For example, this is how in general you reconcile a bank, or this is how you set up a sale, or this is how you complete a bank reconciliation.
Amy Hooke: So you could do some generic training on this is how to use Xero, but you can't design that training to okay, “This is how your business is set up, and this is how you need to do it. Therefore, this is the process that you should follow.” The other thing you can do is, to prepare bank reconciliations. That means once the data entry is done, either under the supervision of a BAS agent or as a PAYG employee or if you're registered yourself.
Amy Hooke: Well, obviously we're talking about if you're not, so you're allowed to prepare the bank reconciliations after somebody else has processed the data if you're not supervised. So whether it's the client, maybe the client is entering their own supply invoices and coding everything up. But you're allowed to go through and check off the bank reconciliation.
Amy Hooke: The other thing you're allowed to do is, enter data that doesn't have any involvement or calculation of figures that need to be included on the BAS. To me, that sounds like you might be able to enter in transfers in between bank accounts. You'd be able to enter personal transactions that go through the business account and code them to drawings. I guess anything that goes in the BAS excluded or non-taxable code depending which software that you're using, but I'm not really sure. So don't hold me to that one. I don't know if that's correct.
Amy Hooke: The other thing that you're allowed to do is transmit data to the ATO through single touch payroll enabled software where the data transmission doesn't require the interpretation or application of a BAS provision. So I have no idea how that works I'll confess. Because if you're entering wages, then you're applying PAYG. So I'm assuming this means that if the staff are not paying PAYG, then you're allowed to put it through STP. So it may be very small businesses that have a staff member working a couple of hours, I'm really not 100% sure on how that actually works. I don't know how you can get around processing a pay without a BAS provision
Amy Hooke: So it's pretty full on. Going through this list, I was a bit surprised because I knew, I'd heard people saying, “Oh, as a non BAS agent, allowed to really do that much. You're very limited in what you can do.” But because I'm a BAS agent, I never bothered to look into it because I'm like, “Oh well it doesn't apply to me.” So I hadn't really paid attention. But I started to realise that I needed to pay attention because I needed to educate my clients. Also, I would like to be able to help all the bookkeepers to understand what is and what isn't.
Amy Hooke: Now I want you to keep in mind that, his is my interpretation. So I've gone through and read the items of what it actually says on the Tax Practitioners Board, which you can check out for yourself. But obviously the commentary that I've given on each item, it is my view and it is my interpretation of it. If you think that I've got something wrong out of this, or you have questions about it, I'm more than happy for you to let me know. Because as I said, I started looking into this a couple of weeks ago and as I'm reading through those items, I'm just going off of my experience of what I think that this means.
Amy Hooke: So the way that I've taken it is that a BAS provision includes anything to do with on that list and that includes, coding something and applying GST or PAYG. That's the way I've interpreted it, I don't know if it applies. So if you're just entering something and it's got, for example, if let's say something comes through receipt bank and it picks up that the items got GST on it straight from the tax invoice, I am not 100% sure if that is allowed or not allowed. So, for example, if the invoice comes through and it's just picking it up off what's on the invoice, then I'm not sure that that counts as… definitely doesn't count as interpretation.
Amy Hooke: Interpretation would be let's say, let's say the invoice didn't have GST or let's say the tax invoice was missing and you wanted to, I don't know, let's say it was under the threshold of 75 plus GST. So let's say $50 invoice came through, an expense came through on the bank statement, but there was no tax invoice. But you asked the client what it was and they said, “Oh, I bought some stationary.” Then you go, “Okay, well stationary has GST on it.” So unless they bought a drink at the shop, which is not deductible, you would be able to claim a 10th or you would be able to look up the shop and actually look up their ABN and see if they registered for GST. And then you would determine, “Okay, this should have GST on it.
Amy Hooke: I know from what I'm reading, you would not be allowed to do that. Whereas if the tax invoice comes through and it clearly states that this is a tax invoice and here is the tax amount, I don't know that falls under this part that says, “Requiring interpretation of.” So we know it's not interpretation, but is an application of a BAS provision. You're applying GST. That's the shady area for me. So I will admit that that is the shady area.
Amy Hooke: I'd love to do a little bit more homework on this, and it's quite funny because that grey area, whichever way that it goes could make a big impact on a BAS agent. So I think that this is something that we really need to know about. I know that the ICB have put together a resource where they say what you can and can't do. It's a bit more simplified than my list. So it's not listing everything word by word from the Tax Practitioners Board. The way that they've listed it there, is that it said that, “A non BAS agent can process and ask questions about something, but they can't determine or make decisions about something.”
Amy Hooke: Yeah, the way that I read it, I don't see that there's any way around it, but the way that I read application of a BAS provision means putting the GST code on anything. So it is quite limiting there, and if you're listening to this and you're thinking, “Man, pretty much everything that I do means I should be registered.” Then there are options and you need to find somebody to supervise you in the work that you're doing for a period of time.
Amy Hooke: Then the great thing about getting supervised is that, you'd be able to have your point supervised over at your hours, supervised over a period of time, and then you'd be able to get registered once you've got a thousand hours, if you're a member of an association like ICB or Australian Bookkeepers Association. Not Australian Bookkeepers Network, I think that they are not considered an association. However, there's a benefit of going through ABN, they do have a supervision service. I recommend that you check that out and see that you can get supervised by them.
Amy Hooke: Otherwise, you can approach a BAS agent, ask them to supervise you, and normally there would be a fee involved in that per client. Pretty full on, huh? It's, it's pretty full on. So anyway, back to my story. I was working in that cafe, clearly providing BAS related services and BAS provision. So it's clearly doing the wrong thing. At the time, I don't know, I remember when it was, I think it was when… I don't know. I actually can't remember.
Amy Hooke: It was sometime in that year, I mentioned this to a colleague that I was working for this client directly. And so she was shocked when I told her, she was like, “Oh.” Now she wasn't rude to me, but she said to me, she's like, “Oh, are you a BAS agent?” I'm like, “No.” And she said, “Well, how are you doing this work?” I said, “Well, I don't know. I'm just doing it.” She said, “Well, you need to be registered.” I was like, “Oh, okay.”
Amy Hooke: Yeah. So I remember her telling me that and it was someone that I respected and I believed her and the way that she said it, she said it firmly she didn't make it sound like it wasn't a serious thing. She told me that it was serious and because she told me that, I respected her. She said it to me without judging me, but she made it clear how serious it was and what the consequences were. She made it clear to me that, not only was I putting the business at risk, but I was also putting the future of my own career at risk, in terms of getting penalised by the Tax Practitioners Board. Or I guess even potentially not being allowed to become a registered BAS agent in the future.
Amy Hooke: I thought, “Oh my gosh, I would die if I couldn't do bookkeeping.” Bookkeeping had been my livelihood for such a long time, and I thought, “Oh wow. I have been putting my career at risk.” I definitely didn't want to do that over something so small. The funny thing about all of this is that I've been working in an accounting firm with a bookkeeping practise for 10 years. At the end of those 10 years, I was the manager of the bookkeeping practise.
Amy Hooke: I wasn't connected in with any communities. I didn't know that there were a whole community of other bookkeepers out there. I wasn't a member of any associations and because there was no one in the firm… once I was at the point of being a manager in that practise, so he business partner had left long before that and it was being very poorly managed by a new manager that they brought in.
Amy Hooke: I came in and cleaned up the mess from that person and took over. Because I wasn't linked into any associations, I didn't have any professional memberships, I really didn't have that connection with the community. I had no connection with the community at all, and so I had no way except for this one bookkeeper that I knew who was able to tell me. So I went along doing this work, working illegally and breaking the law, but not knowing what I was doing.
Amy Hooke: But I found it so funny, kind of ironic that I'd been in this firm for such a long time, but I just wasn't exposed to the true information about what the rules were. I missed the fact that something so serious had come into force. I thought, “Oh, okay. I didn't get that memo. When did this happen?” Once I found out, once my friend told me, I did try and justify a little bit and I tried to pretend that she hadn't said it.
Amy Hooke: But very quickly I had in the back of my mind that I knew that this was wrong. I was now becoming anxious about getting caught, getting penalised or being unable to practise my profession in the future. I thought, “Okay, I've got to just do this. I don't know what's involved. The whole thing was a bit overwhelming.” But I went on the Tax Practitioners Board website and I well and truly had my alleys up. When I read what the requirement was, I had my alleys up.
Amy Hooke: I know not all bookkeepers are in this position and I know it's very hard. So I apologise that I can't relate to being in a situation where I desperately want to get registered, but I've got four years ahead of me of getting registered. Because I'd worked in the accounting firm doing so many BASes, I already had my hours off. So I approached my boss and I said, “I would like to become a BAS agent.” So he signed off
Amy Hooke: It took about three months to get my registration because I had to go do a couple of subjects. I had to study a GST subject and a payroll subject because although I had an accounting degree, a fairly recent one. It hadn't covered those two specific topics. A lot of [inaudible 00:44:56] have what they call a BAS agent skillset. So it's the additional couple of skills that you need on top of an accounting degree that are not included.
Amy Hooke: Whereas, I think if you go through the cert four wrap, those topics are included in the cert four. When I reflect back on this situation, especially when I see posts in Facebook groups about dobbing in bookkeepers who are not registered, I was so glad that fellow bookkeeper was willing to tell me the law and help me out. If she just reported me to the TPB without speaking to me, I would have been devastated.
Amy Hooke: If I got a call from the Tax Practitioners Board because someone had dobbed me and I would've been shocked. What I wanted to emphasise here is that, you can't judge when someone is working unregistered. When you discover that someone's not registered, you have to give people the benefit of the doubt. I'm hoping that by you hearing my story and I'm assuming the fact that you're listening to my podcast regularly, that you do respect my opinion and you also respect me as a colleague and potentially I'm somebody who you look up to
Amy Hooke: I'm hoping that you can say, “Oh wow. Someone who I really respect actually had done the wrong thing and went through this process themselves.” So I hope that that will give you peace of mind to know, yes, you are doing the wrong thing if you're working unregistered, it is illegal what you're doing. It's not just wrong or not the right thing to do, but it's actually illegal. You're actually breaking the law and you're putting business owners at risk and you're putting your own career at risk.
Amy Hooke: But if I can tell you that in a kind and humble way that says, “Hey, I made this mistake too.” Then I'm hoping that you will take this seriously because it really is serious. In fact, I'd love for you to have a listen to an episode that I did about the impact or the cost of rescue jobs on Australian small businesses. Because this is a serious thing. People think bookkeeping is just data entry. They think it's just an entry level skill that anybody can do.
Amy Hooke: The other thing I really want to emphasise here is that, if we give people the benefit of the doubt and we give them a chance to do the right thing by telling them, not just the rules but also the consequences of breaking the rules, then you're giving that person a chance to make the right decision. I believe that when someone hears this from you, they might not take it seriously the first time. That doesn't mean that they are bad person and who wants to do something illegal.
Amy Hooke: Every human being, when they hear the truth about something, it's probably going to take them time between hearing the news and then making the choice to make the right decision or to start the steps that they need to take towards making the right decision. That's why I've decided to put together this little checklist or process of how we can actually approach somebody. Because I do think that there is a place for reporting someone to the Tax Practitioners Board, but I think that there's a certain number of steps that need to happen before that.
Amy Hooke: What we need to do is we need to take the approach of educating our fellow bookkeepers and not making assumptions about their motives because to say, “Oh, this bookkeeper is working unregistered.” And assuming that they know the rules is not a good idea. And to approach a bookkeeper and to have a go at them or just to simply report them to the Tax Practitioners Board. I think that that, I see that as equally wrong as working unregistered. That's my opinion. My strong opinion if you want it.
Amy Hooke: But I think I would count you as in the same basket as someone… if you're someone who's willing to just dob someone in without taking the time to educate them or find out their circumstances, I just think, yeah… that really upsets me. I just think don't do that. Please. Let's take an approach of educating each other. We don't need to dob each other in and report each other, but of course there is a point where you would report somebody. So I'm not saying we don't do that, I'm just saying let's do it in the right order.
Amy Hooke: Here are the steps that I've come up with. Again, this is just me brainstorming. I haven't fully formulated all of this. I haven't bounced the idea off somebody yet. I haven't had it checked by any of the authorities or anything like that. But this is my thought. This is how I would personally do it.
Amy Hooke: All right. I've put together these seven steps here. Step one, speak to the bookkeeper directly if possible, in-person or on the phone. I recommend this above putting it in writing due to possible defensiveness and misunderstanding. However, if the only option is to do it in writing, I would say do that. Just make that your second preference.
Amy Hooke: If that person can hear your voice and they can hear that you're not angry with them or judging them and that you're truly coming from a place of helpfulness. If you're not really good at written communication and expressing your tone through written communication, which is something that's difficult to do. If you're not really good at that, if you've never written an email where someone's misunderstood you, then by all means send it by email.
Amy Hooke: But if you think that sometimes people misunderstand you on email, practise your nice voice and give them a call and just have a chat to them first. So that's step one. During that step, what I would suggest that you speak to them about it, it would be something like this. “Hi there Sally. My name's Amy, I am a fellow bookkeeper and I just wanted to see if you had a couple of minutes. I wanted to chat to you about something.”
Amy Hooke: Obviously, they would say yes or no, and if they say no, make another time and if they say yes, chat to them. Then obviously they'll want to know what you want to talk about and you say, “Oh, just some things come to my attention and I'm just a little bit worried. But I wanted to chat to you because I'm not really sure. I just want to find out a little bit more information. But I noticed that you're not a registered BAS agent and I'm not sure if you're aware of the requirements of being a BAS agent. But I thought if I gave you a call and had a chat to you, I might be able to provide you some information. But also if I've missed something, maybe I'm incorrect.”
Amy Hooke: Give the person a chance. Obviously, I don't know, you might not like the way that I've communicated that, but for me, I don't like to just hit people directly, because it comes across as harsh. So you can see the way that I've worded it is like, “Hey, I'm happy to be proven wrong here. I hope that I'm wrong, but I really want to be helpful here and I want to be able to give you some information if you don't already have it.”
Amy Hooke: The person might say to you, “Oh yes, I am registered. I just haven't had time to update my website yet.” For example. Or maybe you've checked them in the BAS agent, obviously I recommend before you do this, look them up, look up their name and see if you can find them as registered because maybe they haven't updated their website. Then from there you could say to them, “Look, probably a good idea to put that up because otherwise someone might take that the wrong way.”
Amy Hooke: If they say, “Yeah, I'm not registered.” They might say something like, “Oh, I'm not aware of that, I didn't know.” They might be telling the truth or they might not, but I would suggest that you believe them. So if someone says, “Oh, I didn't actually realise, what do I need to do?” And you say, “Look, I'll send you some information.” Then try and have a little bit of a chat to them on that call and just say, “Look, this is what you're allowed to do and not allowed to do and these are the consequences for if you breach that.
Amy Hooke: Here's the way around it. You can either get registered or you can find someone to supervise you. Or you could approach your clients and say, if you can work as a PAYG employee.” Give them some options. So they'll probably be very thankful and they'll say, “Great, can you send the information through? I'm really embarrassed about this. I didn't know.” And they'll be very grateful for your help.
Amy Hooke: Now there's a third option there and that's going to be the person who, they already know, or maybe they don't already know, but they're going to be defensive. So they're going to go… I don't know what they would say in that situation, but they might hang up on you, they might say, “Oh, that's none of your business.” Or they might say, “Well, I don't want to do that.” Or whatever. I can't imagine where that would happen.
Amy Hooke: If someone called me and said that, I can't imagine responding like that, but you just never know. So if that happens, don't get upset. If they say, “Look, I'm not interested in registering.” You can say, “Well look, these are the consequences and I don't want that to happen to you. But look, I'll send you some information anyway. It's up to you if you want to read it.”
Amy Hooke: You can say to them, “Look, I feel that it's my responsibility under my BAS agent registration to make sure that people are adhering to this. I'm sorry this has upset you and I'm sorry that you don't like it or you don't agree with me. But I will send you the information you need to do some homework and you can stop the steps towards this. I'm not asking you to get registered this second.”
Amy Hooke: They might say something defensive like, “Oh yeah, but it's going to take me four years to get that qualification.” You can say, “Well look, there's other way around it. You can get supervised. You can just start the steps towards it, get yourself supervised and then you're on that track or enrol yourself in a course and get on that track.” You can get off the phone with them and after you get off the phone, that takes me to step two
Amy Hooke: Step two is after you speak to them or write to them and confirm in writing what you've said, including any relevant links that you wanted to share with them about information. Then what I would do is I would give them some time. What I've put down for myself is that I would give them three months and you might be thinking, “well, we need to dob them in straight away, if they're not willing to change.” Or, “We need to follow up more quickly than that.”
Amy Hooke: I think three months is a good amount of time because it gives the person a fair bit of time to think about it. You could just do a month, but if you give someone, a month, two months, three months, I think that's a good amount of time. Then after that time, I'm going to suggest follow up with a phone call. So give them another phone call and say, “Hey, it's me again. I hope you don't mind me calling you back. But I just wanted to see how you're going?”
Amy Hooke: Just see if they've taken any steps and they might say, “Oh, I've been too busy.” Or they might say, “Yeah, I've enrolled in my cert four.” Or they might say, “I've found myself someone to sponsor me.” Or, “I'm under the ABN, Australian Bookkeepers Network mentorship supervision programme. So they might have some positive news like that, or they might say they've been too busy.
Amy Hooke: If they say they're too busy or if they say, “I'm not going to do it.” Or if they make some kind of excuse for taking no action, it would be at that point that I would mention reporting them to the Tax Practitioners Board. I wouldn't mention it in the first phone call. You let them know there's consequences and that they could get reported, but you don't have to say, “I will report you.”
Amy Hooke: But at this point, if the person has taken no action and they've had one or two or three months to take some action, I would then say, “Look, I feel responsible as a BAS agent to give you this information. I've sent you all of the information, I've let you know what's required and I feel like you're completely unwilling to take steps towards that. So I'm not going to report you straight away. But I want to let you know that if you haven't taken some action towards getting registered or getting some supervision taken steps towards meeting the criteria. If you haven't done that within the next 30 days, I'm going to have to report you to the Tax Practitioners Board.” And I would get off the phone.
Amy Hooke: So obviously that's that's step three. Give them three months time and then follow up with a phone call. In step three, you're giving them three months time following up with a phone call and you're warning them. Okay? So giving them a warning. Step four, after you get off the phone, write to them, confirm in writing what you've spoken about, including any suggested action steps for them.
Amy Hooke: For example, find a BAS agent to supervise you, complete an application, join the ABN BAS sponsorship programme or enrol in the required studies, et cetera. Including that email that you're giving them 30 days to take action and let them know that you will follow up with another final phone call in 30 days time. At the point, if you find that they haven't taken any action within the 30 days time, that you will be contacting the Tax Practitioners Board to report their activities.
Amy Hooke: Step five is to give them 30 days and then do a final followup call. If at this stage the person is still taking no action, then let them know that you will be reporting them to the Tax Practitioners Board and then see what they say. Because at that point, once they realise that you're serious, there's still a chance that they're going to change. So they'll say, “Okay, okay, I will do something about it.”
Amy Hooke: If they say they'll do something about it, say, “Well look, this time I'm going to give you a final 14 days because I do believe that you're going to take some action.” But if they adamant and they say, “I'm not doing it, you can go and get stuffed.” You can say, “Well unfortunately I will be reporting you.”
Amy Hooke: Step six is confirm in writing after the call, based on whatever conversation that you've had. If they refuse to take action, you can let them know in that email that you will be reporting them today. So you say, “I'll be reporting you today.” Or you can say tomorrow if you want to give them an extra day. You can say, “Look, if you change your mind, just reply to this email within 24 hours and I won't do it.” If they say, “Look, look, I will do it. I'm sorry, I didn't realise how serious this was.” Then confirm that in writing as well.
Amy Hooke: Just let them know, “Okay, look, I'm going to give you another 14 days or another seven days to do this. I want you to email me back and let me know what you have done. Otherwise I will report you on day 14.” Or whatever. But let them know in this email that you're still willing to help them to get on the right track. Even though you're becoming more firm and you're really letting them know you're serious, still keep a tone of kindness and willingness to help them.
Amy Hooke: Step seven is if they don't take action after the 14 days or that 24 hour period that you've given them, then contacts the Tax Practitioners Board and report them through whatever process you need to follow there. Put it into the hands of the Tax Practitioners Board who at that point will be able to put harsher discipline on them, warn them more harshly, find them if needed, and educate them in a much stronger way, which is not your responsibility.
Amy Hooke: Your responsibility as a BAS agent is to inform and educate and help fellow bookkeepers. But it's not your responsibility to punish them. I think that includes posting about them in Facebook groups, judging them, being nasty, spreading rumours about them, maybe telling other people about them, anything like that. There's no need to do any of that. I think that if we've got these steps at hand, you can come up with your own. If you want your own version, you don't have to follow mine.
Amy Hooke: I guess I've loosely followed a process that you might use in debt collection. When you're collecting debts, you don't call the person and the first thing and tell them that they going to jail. You contact them. You don't call them up and say you're getting legal action. You don't just take them to court, you give them a chance. You assume that maybe they've missed it or maybe, it's been an oversight that maybe they didn't have the tax invoice.
Amy Hooke: You take that same approach, then you will find, probably you'll get people a lot more open to receive the information that you've got and to be able to take action. So that's it. That is my secret about BAS agent registration. That is a whole heap of information about what a bookkeeper versus a BAS agent can and can't do. And here's my checklist on how to educate and approach a fellow bookkeeper who is working unregistered and to help them to get on the right path.
Amy Hooke: I really hope this has been super helpful. I'd love your feedback. I'd love your response to this. If you have any corrections to anything that I said that you don't believe is correct. Then you can email me my email address is . And if you email me, I will reply to you. I welcome any input into this. I'm going to pop a couple of notes and a couple of helpful links for you.
Amy Hooke: I'm going to give you a direct link to the Tax Practitioners Board page, which shows what a BAS agent and bookkeeper can and can't do. I'm going to share with you an episode of the cost of rescue jobs on Australian businesses and I'll give you also my checklist for how to approach a bookkeeper who is working unregistered. So I'll provide you a link for that as well.
Amy Hooke: Have a great day. I hope you enjoy these resources. I hope you've enjoyed this episode and that you've learned a lot about it. If you're in a position now where you've realised that you are doing the wrong thing, then I would urge you to take some of the steps that I've suggested, which would be to contact the Australian bookkeepers network. I'll put a link to that as well.
Amy Hooke: Then also, yeah, get yourself in the sponsorship programme or contact a BAS agent who you really like who you think would be able to mentor you and get that arrangement in place. Because once it's in place, you're perfectly allowed to do any of those things. Start the process, get on track, get the education that you need and the skills that you need and get on track.
Amy Hooke: If you're a BAS agent and you've been looking down on bookkeepers who are working unregistered or becoming offended, really take this on board and have a think about how you can be helpful instead of judgemental and perhaps you've got a bookkeeper in your life you'd like to have a conversation with. If you follow this process and it helps you, then please also let me know because I'd love to know that my resources are helping other people.
Amy Hooke: Hopefully you don't ever have to use it, but if you do, I hope it's a very big help for you. All right, well have a great weekend. Thanks for joining me and I'll see you next week.