How a Bookkeeper Can Handle Tax Returns
Written by Bindi Gethen
The world of business is filled with excitement, intimidation, and yes, a fair share of challenges. The biggest of these? Managing your financial transactions and navigating your country’s tax laws. That’s why you need someone with dual expertise in financial statements and tax records.
So can a bookkeeper do tax returns? The Australian Taxation Office (ATO) stipulates that only registered tax agents can charge a fee to prepare and lodge tax returns. This means that unless your trusty bookkeeper also happens to be a registered tax agent, they technically can’t do your tax returns. However, they can still help you prepare the necessary financial reports, which can be a massive help when tax time rolls around.
Can a bookkeeper in Australia do tax returns?
In Australia, a bookkeeper cannot directly handle tax returns unless they are a registered tax agent. They can certainly assist in preparing the groundwork, providing accurate financial statements, and organising receipts and invoices.
But when it comes to submitting the return to the ATO, this step requires a registered tax agent. This is due to the complexities of ATO compliance and tax regulations, which require specific expertise and certification to navigate effectively.
To become a registered tax agent in Australia, there is a specific process outlined by the Tax Practitioners Board (TPB). The first step is to meet the necessary educational requirements – a course in Australian taxation law and commercial law approved by the TPB. This is usually a degree-level study that covers all aspects of tax, financial management, and commercial law.
Next, you would need to gain relevant experience. For a tax agent, this requires working in a relevant field for a minimum of 1,400 hours within the past five years. This practical experience is crucial, as it exposes you to the real-world application of the principles learned in your course.
Once you’ve met the educational and experience requirements, you can apply to the TPB for registration. This process includes conducting a fit and proper person test.
Related articles:
How to Apply for a Tax File Number – Australia
What Happens if You Haven’t Paid Taxes in 3 Years? | Australia
Benefits of bookkeepers registering as tax agents
1) Authority to sign and lodge tax returns
For my fellow bookkeepers, one thing to note is that registering as a tax agent grants you the authority to sign and lodge tax returns on behalf of your clients. This authority is particularly pertinent when dealing with businesses that are required to submit a Business Activity Statement (BAS).
As a BAS agent, you’re trusted not just to prepare, but also to lodge these statements, making sure that businesses meet their reporting obligations in a timely and accurate manner.
2) Increased trust and credibility
When you’re both a bookkeeper and a registered tax agent, you’re presenting an extra layer of trust and credibility to your business operations. Tax agents are bound by professional codes of conduct and must meet certain rigorous standards to maintain their registration. This, in turn, translates to financial records accuracy and reassurances that your tax preparations are handled with the utmost proficiency and integrity.
Clients, prospective customers, and even financial institutions are likely to view your business more positively. This increased trust and credibility can pave the way for enhanced relationships and opportunities, both now and in the future.
3) Improving decision-making and planning capabilities
The accuracy of financial records is critical for effective decision-making. Tax professionals understand the nuances of financial data and tax laws, which they can leverage to provide insightful advice and forecasting.
Pro tip
When you gain a clear understanding of your financial standing, it becomes easier to identify opportunities, assess risks, and make informed decisions that propel the business forward.
4) Expanded range of services
When bookkeepers register as tax agents, they extend their service offerings beyond maintaining accurate financial records. They’re able to handle intricate tax matters, provide strategic tax advice, and assist with tax return preparation and submission. This expanded range of services makes them a one-stop shop for all financial and tax needs.
To be more specific, registered tax agent bookkeepers offer a comprehensive range of services that extend beyond basic bookkeeping. This includes payroll management where they calculate wages, process payments, and prepare end-of-year payment summaries. They’re equipped to manage accounts receivable and accounts payable and thus can guarantee that all incoming and outgoing payments are properly tracked and recorded.
They prepare and lodge Business Activity Statements (BAS) and Instalment Activity Statements (IAS), enabling businesses to meet their Goods and Services Tax (GST) and Pay as You Go (PAYG) obligations.
They also provide financial reporting services, preparing essential reports such as profit and loss statements, balance sheets, and cash flow statements which are critical for business decision-making. Not to mention, they offer tax planning and consulting services, advising on the tax implications of business decisions, ensuring compliance, and helping businesses leverage tax concessions and incentives.
5) Stay informed and compliant
A registered tax agent who is also a bookkeeper can make the complex world of taxation and finance understandable and manageable. This dual role goes beyond number crunching. It’s about strategising, planning, and paving the way for a business’s financial success.
By registering as a tax agent, a bookkeeper is not merely adding another feather to their cap; they’re enhancing their ability to serve businesses with more accuracy and insights. They stay up-to-date with the latest changes in tax laws and regulations.
Choose the right tax professionals with The Bookkeeping Studio
Every purchase, sale, payment, and receipt paints an important part of your brand’s bigger picture. You need a holistic understanding. Every transaction shouldn’t just be recorded but analysed and understood in the context of taxation laws and financial strategies.
That’s why you may want to consider partnering with our team at The Bookkeeping Studio. Our team isn’t just well-versed in accounting. We’re also registered tax agents who can offer a 360-degree perspective on your business’s financial landscape. By investing in tax preparation services, you can rest assured that your finances are in the safest hands.
See how much your peace of mind for your business costs today.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
