The Federal Court has imposed over $80,000 in penalties on an individual and her company after they admitted to breaches of the Tax Agent Services Act 2009 by providing and advertising tax agent services whilst unregistered.

Between July and December 2010, the individual provided tax agent services on 7 occasions, receiving around $1,000 for her work. From January 2011 to August 2013, the company provided tax agent services on 44 occasions and advertised the availability of those services on 5 occasions. The company received around $7,000 in fees for its services.

In determining the amount of the penalties to be imposed on the company, the Federal Court examined penalties imposed in similar cases and took into account the large number of offences committed over an extended period and the relatively small amounts received for the tax agent services. In relation to the individual, the Court also considered her poor health, current status of unemployment and her level of co-operation. The Court said that the contraventions were at the “lower end of any scale of seriousness”, but that the continuation of the company’s conduct over a period exceeding 2 years was a “significant circumstance of aggravation”. The Federal Court also noted that while corporations are subject to a much higher maximum penalty, “the difference between corporate and individual trading should not be taken too far” in the case of a small company. Accordingly, the Court was prepared to reduce the penalty imposed on the company for providing tax agent services (from $92,250 to $71,500).

The Federal Court imposed a $4,000 penalty on the individual, while the company was ordered to pay $71,500 for providing tax agent services whilst unregistered and $6,000 for advertising those services whilst unregistered.

However, the Federal Court refused to grant the Board of Taxation injunctive relief concerning future conduct which may contravene the Tax Agent Services Act 2009. In the Court’s view, it was most unlikely that the individual and her company (which had ceased to trade) would in the future engage in any business. Furthermore, the Court was not satisfied that the individual breached the advertising rules.

(Tax Practitioners Board v Lamede Group Pty Ltd [2016] FCA 63, Federal Court, Dowsett J, 10 February 2016.)