Choosing a tax accountant

Whether you're an individual wanting to escape the hassle of doing your own tax return, (as well as maximising your return), or your business requires tax assistance, using a qualified tax professional is a sensible idea. Depending on a number of factors - including turnover, whether you're a sole trader, a company or a partnership - what you require from your tax accountant will vary.

CA or CPA?

There are a number of official accounting bodies in Australia, allegedly with different levels of expertise – often disputed amongst accountants – which can mean different charges to the individual or company.

In 2005 the Institute of Chartered Accountants (CA) began to run TV ads suggesting they were of higher quality than their largest rival, the Chartered Practicing Accountants (CPA). Many people feel, however, that both offer a high standard of accreditation, and other things are far more important. CAs have a graduate diploma, whereas the CPA qualification does not entail this, but they're still highly trained professionals. The CA qualification is probably a bit more technical, and the CPA is probably a bit more practical, but there is little in it. As ABC Radio journalist James Valentine once asked a guest 'Do the CAs like rugby union and the CPAs rugby league?' Yet in practice, there are some differences. Many large scale firms prefer to use Chartered Accountants, and this difference can sometimes, certainly not always, mean a higher fee, for a supposedly higher service.

It is confusing, and there are a number of accredited bodies. Bob Duncan, President of the Association of Taxation and Management Accountants (ATMA) explains:

"In all, there are five bodies…We're one of the five recognised professional associations under tax legislation, so that our members are deemed to be on an equal par with CPAs, Institute members and NIA (National Institute of Accountants) members for tax (purposes)." Whether this ultimately means better service from one type of accountant is disputable – but the following should help bring you closer to choosing one.

How to choose an Agent

• Reputation. An easy one to begin with, but important. Ask if the accountants your friends and colleagues use contact them throughout the year with advice and recommendations - not just at the end of the financial year. A forward thinking outlook is a good idea.
• Size. You might be able to find some good rates with a large firm, but at small to mid size firms, you may get a better service, with a team or individual more committed to your account, whether you are an individual or business. Big firms also might be subcontracting your accounting to more junior staff.
• Other Services. Before you choose an accountant, do you need other areas organizing as well – could you be choosing one for financial planning advice, retirement advice, or help with a business plan?
• Specialisation. Many accountants specialise in particular areas. Try and find out what this is to see if their area of expertise is right for your needs.
• Qualifications. Unsurprisingly, there are some shifty people offering services they are not qualified to, so always check for accreditation from an officially recognised body. Only registered agents are authorised to charge for preparing or lodging a tax return. Look out for people trying to charge you for using e-tax, which you yourself could download free from the ATO.

Most importantly, a person, partnership or company is not entitled to charge a fee for preparing an income tax return or transacting business on behalf of a taxpayer in income tax matters unless they are registered as a tax agent with the Tax Agents' Board. You can check to see if an agent is registered at the Tax Agents' Board.