Tax practitioner application fees 2022-23

1. Introduction

Purpose of the CRIS 

This CRIS provides information on how the Tax Practitioners Board (TPB) will implement partial cost recovery for the processing of applications for registration and renewal of tax agents, BAS agents and tax (financial) advisers (collectively referred to as tax practitioners).  

It should be noted that the Government’s response in November 2020 to the Independent Review of the TPB, led by Keith James, will impact on the TPB’s future costing framework and the future funding arrangements for the TPB are under active review so the CRIS needs to be considered in light of likely changes.

About the TPB 

The TPB is an independent statutory body created under Tax Agent Services Act 2009 (TASA) and is comprised of Board members appointed by the relevant Minister. The TPB administers the TASA and Tax Agent Services Regulations 2022 and is responsible for regulating entities providing tax agent services in Australia for a fee or reward, which includes the services provided by tax practitioners. 

For more information about the TPB, see About the TPB.

2. Description of the regulatory charging activity

Tax practitioners are charged for the processing of applications for registration, including renewal, as a tax practitioner, on the basis that it is equitable that tax practitioners, rather than the general public, bear these costs. The TPB undertakes a range of activities to satisfy this mandate. These activities can broadly be described as follows: 

• engaging with stakeholders – including potential applicants, applicants, registered tax practitioners and professional associations

• providing policy advice on the registration and renewal eligibility requirements 

• providing technical and operational guidance on the registration and renewal process and eligibility requirements  

• developing and maintaining online tools to enable the registration and renewal process (including online forms and a tax practitioner portal ‘MyProfile’) 

• assessing and processing registration and renewal applications.

However, in 2022-23 the TPB will not be charging for its compliance activities, which include: 

• investigating conduct that may breach the TASA, including non-compliance with the Code

• ensuring registered tax practitioners continue to meet the ongoing eligibility requirement

• breaches of the civil penalty provisions 

• imposing administrative sanctions for non-compliance with the Code

• applying to the Federal Court in relation to contraventions of the civil penalty provisions in the TASA.

3. Policy and Statutory Authority to Cost Recovery

The TPB’s ability to charge application fees is established under the following: 

• Tax Agent Services Act 2009

• Tax Agent Services Regulations 2009

• Treasury Laws Amendment (2018 Measures No. 1) Regulations 2018.

Policy approval for a new fee structure was announced in the 2018-19 Federal Budget. Increased application fees were effective from 1 July 2018, with the application fee amounts being subject to an annual consumer price index adjustment from 2019-20 onwards.

The amended application fee amounts and structure that apply are as follows:

Table 1: Tax practitioner application fees

Application fees (payable at least once every three years)	FY 2020-21 ($)	FY 2021-22 ($)	FY 2022-23 ($)
Registration as a tax agent	700	704	731
Registration as a BAS agent	140	141	146

4. Cost Recovery Model

TPB’s regulatory charging activities are outlined in Table 2 below.  

The cost of regulatory activities is based on the staff effort to process the registration applications which is then applied to the three tax practitioner types (tax agent, BAS agent and tax (financial) adviser). 

Staff time which relates to the receipt, checking, assessment and verification of information, making a determination on the application, as well as notification to the applicant, has been worked out through the use of management reports and staff questionnaires.

Table 2: TPB's regulatory activities

Activity	Cost driver	Activity description
Stakeholder engagement	Indirect cost	The TPB engages with a range of stakeholders (including tax practitioners, professional associations, education providers and other government entities such as the ATO and Australian Securities and Investments Commission (ASIC) to guide and inform our decision making and operations.
Education	Indirect cost	The TPB uses a variety of communications channels and products to educate tax professionals about the registration and renewal eligibility requirements.
Guidance	Indirect cost	Providing policy advice on the registration and renewal eligibility requirements.
Registration tools	Indirect cost	Developing and maintaining online tools to enable the registration and renewal process.
Application assessment	Direct cost	Assessing and processing registration and renewal applications.

The nature of the cost drivers are outlined in Table 3 below. 

Table 3: Main cost drivers

Cost driver	Driver description
Direct costs	Costs for employees involved in directly processing new and renewal registration applications (for example, staff salaries, superannuation and leave expense) and supplier costs (for example, training and IT costs).
Indirect costs	Costs for employees indirectly involved in processing new and renewal registration applications (such as employees involved in policy development, online forms development and communication activities) (for example, staff salaries, superannuation and leave expense) and supplier costs (for example, training and IT costs).
Support cost	Includes all TPB employee and supplier costs not classified as Direct or Indirect. These costs will have no direct relationship to processing registration forms but are relevant TPB operational costs. The nature of these costs include travel, human resources support, finance support and property operating expenses.

Table 4 illustrates the 2022-23 estimated cost for processing new and renewal applications by cost and tax practitioner type. This table also illustrates the 2022-23 revenue from application fees by tax practitioner type and shortfall from revenue against cost.

Revenue has been estimated using anticipated volume of applications over a three-year period, based on historical trends and known timing of renewal applications.

Table 4: 2021-22 revenue and expense estimates (for the registration process only)

2021-22 Estimate	Tax agent	BAS agent	Average
Application volumes	19,389	5,587	24,976
Cost	$	$	$
Direct	34.39	31.40	33.72
Indirect	44.45	39.89	43.51
Support costs	428.07	428.07	428.07
Total cost per application	507.01	499.37	505.30
Estimated total cost ($'000)	9,830	2,790	12,620
Application fee revenue
Rate ($)	731	146
Estimated revenue ($'000)	14,173	816	14,989
Surplus/(Shortfall)($'000)	4,343	-1,974	2,369

5. Financial Estimates

TPB expenses and revenue estimates for processing new and renewal applications are set out in Table 5. The full cost of processing applications is cost recovered by the application fee, across the budget year and three forward years.

Table 5 illustrates the 2021-22 estimated against actual expenditure. The 2021-22 deficit result difference between revenue and expenses is not expected to carry through into 2022-23 and both expenses and revenue are expected to return to pre-COVID numbers.

Table 5: TPB revenue and expenses estimates (for the registration process only)

Year	Estimates	Expenses	Revenue	Surplus/ (deficit)	Cumulative balance
2018-19 Actual	$'000	$14,622	$12,703	-$1,909	-$1,919
2019-20 Actual	$'000	$10,615	$13,194	$2,580	$661
2020-21 Actual	$'000	$15,725	$15,983	$258	$918
2021-22 Estimate	$'000	$15,696	$14,861	-$835
2021-22 Actual	$'000	$13,983	$13,968	-$16	$902
2022-23 Estimate	$'000	$12,620	$14,989	$2,369	$3,271
2023-24 Estimate	$'000	$12,726	$13,815	$1,089	$4,360
2024-25 Estimate	$'000	$12,771	$15,025	$2,254	$6,615
2025-26 Estimate	$'000	$12,810	$18,153	$5,343	$11,958

Shortfalls from revenue against expenses are funded by additional government appropriation.

6. Non-financial performance

The number of tax practitioner applications processed each year is reported in the TPB’s Annual Report (see the section regarding performance measures in the TPB Annual Report).

The revenue and expense associated with tax practitioner application fees will vary in accordance with the number of applications received and processed annually.  A further review of the application fee amount and structure will be conducted if the difference between estimated and actual applications received over a three-year period exceeds 20 per cent.  Whilst projected figures show an overall surplus in estimates in the next three years, this is likely to be significantly revised following anticipated TASA review outcomes and changes to the Costing Framework.

Consistent with Government policy, the charge will be regularly reviewed to confirm that the charge meets the government policy objective of ensuring that tax practitioners rather than the general public bears the costs of regulating tax practitioners and index it for appropriate increases in costs.

7. Risk assessment 

The risk of the increase in 2022-23 is considered MEDIUM. 

The number of tax practitioners is stable and the application fee process is mature however the Government’s response to the James Review, and the TPB Charging Framework review are all likely to significantly change projected estimates so this risk impact may change.

8. Stakeholder engagement 

TPB will review its CRIS annually and will notify changes to stakeholders through the TPB’s existing stakeholder engagement and communication strategy, which includes the TPB’s website, eNews, consultative forums and social media. 

Stakeholder consultation will take place through the TPB’s primary consultative mechanisms – the TPB Consultative Forum and the Governance and Standards Forum.  Approximately 4 forums are held per year and provide the professional associations and the TPB with opportunity to discuss and consult on key matters affecting tax practitioners. 

9. Key forward dates and events

This section sets out an outline of the key events.

Key event	Estimated date
TPB publishes the CRIS	July 2022
Application fee increases commence	July 2022
Review cost recovery arrangement prior to the CRIS being updated	As part of TPB Charging Review TBA

10. CRIS approval and Change register

The table below shows approvals and changes pertaining to this CRIS. 

Date	Description	Approved by
July 2022	Endorsement of the CRIS	TPB Secretary/CEO
10 October 2022	Certification of the CRIS	ATO CFO
31 October 2022	Approval of the CRIS	The Minister for Revenue and Financial Services