At a glance
- BAS agents face growing compliance expectations.
- Late lodgments, outdated documentation and unchecked client data are key pitfalls.
- Minor process improvements can protect your registration and reduce risk.
Over the past few years, compliance expectations for BAS agents have steadily increased. The Tax Practitioners Board (TPB) expects agents to maintain a documented quality management system, current professional indemnity insurance and evidence of continuing professional education (CPE) activity as part of their ongoing registration obligations, while the Australian Taxation Office (ATO) continues to pick up high volumes of errors in activity statements.
Among the $85 billion in GST revenue raised last year, the most common issues were incorrect coding, reporting in the wrong period and mismatched or missing records. While mostly unintentional, compliance issues have consequences, such as delayed refunds, ATO reviews, administrative penalties and deregistration.
We break down five of the most common compliance risks and how to avoid them.
1. Letting professional indemnity insurance lapse
For many BAS agents, professional indemnity (PI) insurance is set up once and then forgotten until renewal or claim time. But even modest business growth can quietly push your policy out of compliance.
Peter de Cure, chair of the TPB, says this can leave agents exposed.
“If a tax practitioner fails to maintain PI insurance that meets the requirements, they will not be meeting an ongoing registration requirement and will be in breach of the Code of Professional Conduct,” he says. “This can result in termination of registration.”
Letty Chen, Tax & Super Advisor at the Institute of Public Accountants (IPA), says there is some commercial risk if your policy doesn’t match your profile because of increased fees, new service offerings or larger clients.
“You may not be covered for the legal costs and damages, which will threaten your business viability,” she says. “While business growth is a good thing, be sure to increase your cover if your turnover jumps into the next coverage threshold under the TPB rules.”
2. Lodging BAS late
Late lodgments often come down to clients delivering incomplete or last-minute data, but not always. If a BAS involves an unfamiliar area that takes time to untangle, it can take longer.
Chen says early client communication and education can reduce this risk.
“Be sure to let the client know of the potential consequences to them if their BAS is lodged late or with inaccurate information,” she says.
“Staying on top of CPE, and in particular any new or complicated areas, will mitigate the delays that can be caused when the BAS agent is spending a lot of time trying to navigate unfamiliar territory.”
A simple, repeatable workflow and a good quality management system can also help.
3. Substandard engagement letters
An engagement letter alone isn’t enough. It needs to meet the TPB’s Code of Professional Conduct obligations, updated in 2024 to include new mandatory TPB disclosure requirements and a requirement to communicate your obligations if a client refuses to comply with tax law.
De Cure says an annually updated engagement letter can take on various forms and help you stay compliant while avoiding misunderstandings.
“A letter of engagement can include a variety of written communications, including a formal agreement, a standard form handout, a brochure, leaflet or electronic communication,” he says.
4. Falling behind on CPE
Chen says it can be difficult for agents to stay on top of a heavy workload and CPE requirements.
“For a standard BAS agent registration, the TPB requires a minimum of 20 hours per year and 90 hours every 3 years,” she says. “One option is to break these requirements down into shorter timeframes, e.g. you could set a flexible goal of at least 7 or 8 hours per quarter so that you don’t have to try to meet most of the minimum hours in the final one or two months.”
Not all CPE requires time away from work. Technical reading and podcasts can count in moderation, and tools like the TPB’s CPE log make tracking simple.
5. Accepting client data without review
Under the TPB Code, BAS agents must take reasonable care to ensure the accuracy of information provided to the ATO. That means you can’t rely solely on client spreadsheets or verbal summaries, especially when figures are incomplete, inconsistent or unverified.
You’re expected to request source documents when needed, such as invoices, bank statements and reconciliation reports. If GST claims look unusually high or income doesn’t match deposits, make further enquiries early and document them.
Getting these five areas right is about more than simply ticking compliance boxes. It’s how you protect your registration, client relationships and the reputation your practice is built on, especially when things get busy.
More information on IPA’s support for BAS agents here.
