'Unacceptable risk': Tax Institute raises major concerns with proposed powers for TPB
What happened
Treasury’s draft legislation would give the Tax Practitioners Board interim suspension powers that can be used before an investigation is finalised. The draft text allows suspension where clients are likely to suffer loss, which industry bodies say is broad and risks disproportionate outcomes. Watch whether submissions lead to narrowed thresholds or added procedural protections and whether suppliers immediately change contract language
Buyer takeaway
Treat this as a material regulatory change for tax/payroll suppliers because it raises the probability of sudden adviser unavailability and contract disputes
Cost / money
Directional increase in remediation and legal costs: suppliers are likely to seek pass-through mechanics or premium terms to cover suspension-related work
Supplier / commercial
Expect suppliers to narrow SOWs, add exclusions for TPB actions, and seek contract clauses shifting liability or requiring buyer indemnities
Safety / operations
Operational continuity risk rises: a suspended adviser can interrupt payroll cycles or delay tax-critical decisions, increasing uptime dependency on alternates
What to watch
Watch for immediate contract amendments, new exclusion clauses, or supplier notices that change support windows or minimum-engagement terms
Key facts
- Draft enables TPB to impose interim suspension prior to finalising an investigation
- Industry submission flags the threshold allowing suspension when clients may suffer loss
Source excerpts
The Tax Institute has raised concerns that draft laws to implement interim suspension powers for the Tax Practitioners Board are too broad and lack appropriate safeguards. Treasury released draft legislation last month which would enable the TPB to impose interim suspension of registration for tax practitioners without the need to commence or finalise an investigation
The proposed framework for the TPB's interim suspension powers could lead to unjust or disproportionate outcomes for tax practitioners, the institute warns. The Tax Institute has raised concerns that draft laws to implement interim suspension powers for the Tax Practitioners Board are too broad and lack appropriate safeguards
In a recent submission on the draft bill, the Tax Institute expressed significant concerns about the breadth of the interim suspension powers as drafted and the "limited procedural fairness protections that accompany them". While the draft EM states that interim suspension is intended to apply only in very exceptional circumstances, the Tax Institute said the legislative threshold does not reflect this intent
