One third of depreciation providers may be in breach of law: Washington Brown

More than one in every three firms providing investors with depreciation reports are not registered tax agents, according to Washington Brown's Tyron Hyde.

A study, undertaken by Washington Brown, analysed more than 80 firms across the country.

Under the Tax Agent Services Act 2009 (TASA), all property depreciation schedule providers are required to be registered Tax Agents, Hyde confirmed.

“The Act was introduced ensure firms have the adequate skill set and insurances to protect consumers,” he said.

“The fact that so many firms are unregistered is definitely a concern, and a case of buyer beware.”

Of the study, the most common illegal provider found appeared to be from property valuers and building inspectors offering the service.

“What this means is that property investors are buying and submitting depreciation claims that could be in breach of the Act," he warned.

Each year, there are 1.6 million people claiming depreciation.

“The worst case I saw was a company that proudly displayed the Tax Agent Number on its website, but when I checked on the Taxation Board’s website it turns out the firm’s registration had been revoked due to insufficient qualifications,” he said.

The penalties can be severe, with the penalty for individuals and corporations under subsection 50-5(1) of the Tax Agent Services Act being $27,500 and $137,500 respectively.

Tyron Hyde's top three tips to ensure you receive an acceptable report:

?    Ask the service provider what Tax Agent Number will be printed on the report.
?    Visit the website www.tpb.gov.au and ensure that Tax Agent number is valid.
?    Ensure the service provider has current Professional Indemnity Insurance.

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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