It’s tax time, as you’ve no doubt realised by the annual mid-year flowering of A-frames outside of nondescript suburban shopfronts promising YOUR TAX RETURN IN 14 DAYS and FA$T RETURN$ HERE and HOT CHICKENS COOKING NOW AND ALSO TAX RETURNS. Or maybe that last one was just in my dreams.
Anyway, when considering the hot, juicy offers before you as far as accountants and tax agents go, you might idly wonder “say, if I hire someone qualified to do my tax for me and they get it wrong, who gets to face the wrath of the Australian Taxation Office?”
And here’s the answer: it’s you.
Now, it should be pointed out that if you think there’s something wrong with your tax return you can amend your return through the ATO. And, as they explain at their site, you should do it quickly too:
“Whatever the reason, you should correct any error as quickly as possible. In some cases, there are legal time limits to making adjustments. And the longer you leave it, the greater the possible consequences in terms of interest and penalties you may have to pay, if the amendment increases the money you owe.”
ato.gov.au
But what if you don’t realise and it’s only when Johnny Tax comes a-knocking at the door that you realise that something was awry? Well… that’s unfortunate.
Under Australian law your accountant is acting as your agent, which means they are doing stuff under your advice. You sign a declaration when your tax return is filed saying that the information is true and correct which means that you accept full legal liability.
And that’s the case even if the screw up isn’t yours. If you’ve given all the correct information to your accountant and they add stuff up wrong because they’re using a knock off Pepster Pigg calculator with no seven which they bought from a stall in Bali, then guess what? Legally, if you don’t notice, that’s your problem.
So what are your options? Well, they exist but none of them are great.
One is to run your stuff by a second accountant or a tax lawyer, but if you’re using a low-rent accountant you presumably don’t have that sort of money. That, or you’re making an informed choice to specifically pick someone who plays fast and loose with their tax advice.
Or you could do it yourself, which might not reduce your chances of being wrong but at least makes assigning blame more efficient.
And definitely do some research on your tax agent before engaging them. Established firms are pricier but most likely have a decent track record; Steve’s Tax And Meat Curing Service Parked Behind The Fish Shop is probably less reputable.
And remember: even once it’s all over, you get to do it all again next year. Yay!