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    2014 ATC 10-351

    PE Hack SC DP

    Administrative Appeals Tribunal, Brisbane


    Judgment date: 28 February 2014

    PE Hack SC (Deputy President):


    1. Mr Raymond Ayles wants to be registered as a tax agent. He would be content for his registration to be made conditional upon him being permitted only to prepare individual tax returns, including rental properties, capital gains and sole trader, and excluding company or trust returns. He applied to the Tax Practitioners Board (the Board) for registration but the Board rejected his application. The Board took the view that he was not eligible for registration.

    2. Mr Ayles seeks a review of the Board's decision.

    The statutory setting

    3. Registration as a tax agent is governed by the Tax Agent Services Act 2009 (Cth) (the Act) and the Tax Agent Services Regulations 2009 (Cth) (the Regulations). Section 20-20 of the Act permits an application to the Board for registration as a "registered tax agent". Individuals, partnerships and companies may apply for registration. By virtue of s 20-25 the Board must grant the application if the applicant is eligible for registration otherwise it must reject the application. The criteria for an individual applicant are described in s 20-5(1) of the Act in these terms:

    (1) An individual aged 18 years or more, is eligible for registration as a registered tax agent ... if the Board is satisfied that: (a) the individual is a fit and proper person; and (b) the individual meets the requirements prescribed by the regulations (including, but not limited to, requirements relating to qualifications and experience) in respect of registration as a registered tax agent...; and (c) the individual maintains, or will be able to maintain, professional indemnity insurance that meets the Board's requirements; and (d) in the case of a renewal of registration - the individual has completed continuing professional education that meets the Board's requirements.

    The Board accepts, and, so far as I am aware, has always accepted, that Mr Ayles is a fit and proper person. There is no doubt that Mr Ayles would be able to maintain professional indemnity insurance and the requirement in paragraph (d) does not arise. The Board refused Mr Ayles' application on the basis of paragraph (b).

    4. The requirements for section 20-5(1)(b) of the Act are set out in Part 2 of Schedule 2 to the Regulations. That Part sets out six alternative requirements, Items 201 to 206. Only one needs to be complied with. Mr Ayles' case is that he satisfies Item 202. It provides:

    202 A requirement is that:

    (a) the individual has been awarded: (i) a degree or a post-graduate award from an Australian tertiary institution in the discipline other than accountancy that is relevant to the tax agent services to which the application relates; or (ii) a degree or award that is approved by the Board from an equivalent institution in a discipline other than accountancy that is relevant to the tax agent services to which the application relates; and (b) if the Board considers it relevant to the tax agent services to which the application relates - the individual has also successfully completed as many of the following courses as the Board considers necessary: (i) a course in basic accountancy principles that is approved by the Board; (ii) a course in commercial law that is approved by the Board; (iii) a course in Australian taxation law that is approved by the Board; and (c) the individual has been engaged in the equivalent of 12 months of full-time, relevant experience in the past 5 years.

    At least initially, the Board was not satisfied that Mr Ayles satisfied the requirements of paragraph (c), dealing with relevant experience, however the satisfaction of this paragraph was conceded once Mr Ayles had clarified aspects of that experience during the course of the hearing. Additionally, the Board conceded that the requirements of paragraph (b) had been satisfied because Mr Ayles had made his original application prior to 1 July 2013. Ultimately the contest came down to a single question - was Mr Ayles' degree in a discipline, other than accountancy, that was relevant to the tax agent services to which his application related.

    Some further matters of fact

    5. The underlying facts were agreed. Mr Ayles has been awarded the degree of Bachelor of Arts (Humanities) from Deakin University.[1] It was conferred in May 1997. Mr Ayles was granted credit for prior learning and, between 1991 and 1996, completed subjects described as,

    The Australian City A

    Religious Experience A

    Religious Experience B

    Religious Systems A

    Religious Systems B

    Religious Investigations A

    Religious Investigations B

    Regionalism and Australia A

    Lifespan Development

    Regionalism and Australia B

    Physiology of Ageing

    Accounting 1

    Health Policy & Administration

    Contemporary Australia A

    Income Taxation Law & Practice.

    Mr Ayles was given a high distinction for Accountancy 1 and a credit for Income Taxation Law & Practice. Additionally, and not strictly relevant to the underlying issue, Mr Ayles has completed a postgraduate diploma of social science from James Cook University which was conferred in March 2002[2] and has undertaken other certificate level courses.[3]

    6. Mr Ayles lodged his application for registration in October 2012. At a meeting on 14 March 2013 a Committee of the Board determined that Mr Ayles did not satisfy the criteria for registration and accordingly made a decision to reject his application. Mr Ayles was informed of this decision, and the reasons for it, by letter dated 12 April 2013.

    7. These proceedings were then commenced.


    8. I note at the outset that Mr Ayles seeks registration on the basis of being confined to the preparation of returns for individuals and does not desire to prepare returns for companies or trusts. The solicitor for the Board accepted that registration could be made conditional upon a condition worded appropriately to give effect to that limitation. Thus I approach the issue on the footing that the tax agent services to which the application relates are confined in that way.

    9. It is also pertinent to note the wording of Item 202. It does not refer, expressly, to the subject matter content of the degree or post-graduate award, it refers instead to a degree or award "that is relevant to the tax agent services to which the application relates", in this case the preparation and lodgement of individual returns. The question then becomes whether Mr Ayles' degree was one relevant to those services. In my judgement, it was not.

    10. The wording of the regulation requires a judgement to be made about the overall nature of the degree or award. Mr Ayles' degree was in the humanities with a strong emphasis on the study of religion. I do not doubt that successfully undertaking that course of study made Mr Ayles a better person but I am unable to see how it could be regarded as being relevant to the provision of services as a tax agent, even on the limited basis proposed by Mr Ayles. The present case is not one where it is necessary to consider the breadth of the meaning of the expression "relevant to the tax agent services to which the application relates" but it must mean, at least, that the degree or award, viewed as a whole, has an evident bearing on the work to be performed in undertaking those services. That connection is entirely absent in the case of Mr Ayles despite the degree including one subject (Income Taxation Law & Practice) that is, in itself, relevant to that work and another (Accounting 1) having arguable relevance. But those two subjects do not satisfy me that the degree was relevant in the manner specified in Item 202.

    11. It follows that the decision under review will be affirmed.

    12. I would add that Mr Ayles forwarded written submissions after the hearing. Ordinarily I would not have had regard to them as leave was not granted to forward supplementary submissions. I have had regard to those submissions given that Mr Ayles received the Board's written submissions shortly prior to travelling to the hearing which resulted, he says, in his submissions at the hearing being somewhat "confused".

    [1]Exhibit 1, pp 59 - 60.

    [2]Exhibit 1, p 62.

    [3]Exhibit 1, p 63.



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