Peroy and Tax Practitioners Board

[2024] AATA 12

Peroy and Tax Practitioners Board [2024] AATA 12 (10 January 2024)

Division:                  TAXATION AND COMMERCIAL DIVISION

File Numbers:         2022/0168

2022/0252

Re:Gary Peroy

Peroys Pty Ltd

APPLICANT

AndTax Practitioners Board

RESPONDENT

DECISION

Tribunal:Mrs J C Kelly, Senior Member

Date:10 January 2024

Place:Sydney

In proceedings 2022/0168, relating to Mr Peroy, the reviewable decision is varied to the extent that the termination takes effect on 1 July 2024.

In proceedings 2022/0252, relating to Peroys Pty Ltd, the reviewable decision is varied to the extent that the termination takes effect on 1 July 2024.

.................................[sgd].......................................

Mrs J C Kelly, Senior Member

CATCHWORDS

TAX AGENTS – breach of TASA Code of Professional conduct – tax agent registration termination – whether the applicant has ceased to meet the registration requirements in the TASA as an individual and sole director of the Company – whether the applicant complied with taxation laws – whether sanctions should be imposed – reviewable decisions varied

LEGISLATION

Tax Agent Services Act 2009 (Cth)

CASES

Bell and Tax Practitioners Board [2020] AATA 2424

REASONS FOR DECISION

Mrs J C Kelly, Senior Member

10 January 2024

Introduction

1. After investigation, the Tax Practitioners Board (the Board) decided on 9 December 2021 to terminate the registration of Mr Peroy and Peroys Pty Limited (the Company) as tax agents, pursuant to paragraphs 40-5(1)(b) and 40-15(1)(b), respectively, of the Tax Agent Services Act 2009 (Cth) (TASA).

2. Mr Peroy and the Company (the Applicants) were notified of the decisions in separate letters sent by email on 23 December 2021. Both termination decisions were effective from 20 January 2022. Both Mr Peroy and the Company were advised that they may re-apply for registration in the future but must demonstrate that they meet the eligibility requirements of the TASA prior to registration.

3. The Applicants applied for review in this Tribunal and for a stay of the reviewable decisions which were ordered, by consent, on 19 January 2022. The stay orders were subject to the Applicants undertaking that they would not take on any new clients to whom they would provide tax agent services.

4. The conduct of concern in this case is a lengthy history of late lodgements and tax debts from about 2013, and failure to comply with orders of the Board made on 27 November 2019. The Applicants did not substantially dispute that history. They argued that there were extenuating circumstances which had arisen over the years that had adversely impacted Mr Peroy’s ability and capacity to focus on the practice since 2013. Those circumstances include Mr Peroy’s serious health and financial difficulties, the health of his brother for whom he is carer, the death of an important client, and that the Company had had staffing issues and was subjected to ongoing NBN outages for weeks at a time which required his attention. The Applicants claim that their failure to maintain their tax affairs up to date was only ever oversight and not intentional. 

5. The Respondent does not dispute the evidence about the extenuating circumstances. 

6. There is no complaint about the quality of the tax agent service that the Applicants provided to clients.

   The issues

7. The Applicants and the Board set out their final positions in documents provided after the hearing. The Applicants proposed ‘conditions’ in a document dated 24 October 2023. In its response dated 26 October 2023, the Board addressed those conditions and maintained that the reviewable decisions should be affirmed.

8. In light of the parties’ final positions, the substantive issues to be decided are whether:

   (a)the Applicants have ceased to meet the registration requirements in paragraphs 20-5(1)(a) and 20-5(3)(a) of the TASA that Mr Peroy, as an individual and as a sole director of the Company, is a fit and proper person; and

   (b)In the exercise of its discretion, the Tribunal should affirm the decisions to terminate the Applicants’ tax agent registrations under paragraphs 40-5(1) and 40-15(1) of the TASA or set aside the decisions and impose another sanction available under subsection 30-15(2) of the TASA for failure to comply with the Code of Professional Conduct set out in the TASA (the Code) or set aside the decisions.

9. For the reasons that follow, I have decided to vary each reviewable decision. In each proceeding, the registration as a tax agent will be terminated with effect from 1 July 2024.  That will give both Applicants further time to arrange payment of the outstanding debts and otherwise get their tax affairs in order before reapplying.

   Background facts

10. Mr Peroy’s father started the practice in 1967. Mr Peroy has been a registered tax agent since 14 November 1995, a director of the Company since its incorporation on 3 July 2001, and the sole director since 10 February 2020. The Company has been a registered tax agent since 1 June 2002.    

11. Before the stay was issued, the Company employed more than eight staff (six accountants and two support staff). It has 300 clients. The Company’s employees and Mr Peroy depend on it for their income.

12. On 20 June 2019 and 16 July 2019, the Board advised the Company (Mr Peroy and his brother as the directors) and Mr Peroy, that it would investigate their conduct under Subdivision 60-E of the TASA. Both were given the opportunity to respond to the resulting concerns.

13. On 27 November 2019, two years before the reviewable decisions were made, the Board advised each of the Applicants of the outcome of the investigation, including the findings made and the consequential sanctions which had been decided on 7 November 2019 (the 2019 Order).

14. The Board decided to impose upon Mr Peroy the following administrative sanctions pursuant to subparagraph 60-125(2)(b)(i) of the TASA because it was satisfied, after conducting an investigation, that he had breached section 30-10(2) of the Code (which requires compliance with the taxation laws in the conduct of personal affairs):

    (a)To issue a written caution under paragraph 30-15(2)(a) of the TASA, and

    (b)to impose an order under section 30-20 of the TASA requiring him to:

    (i)bring all his personal lodgments and lodgments of the Company up to date by 31 December 2019; and

    (ii)enter into a formal payment arrangement with the Australian Taxation Office (ATO) in relation to his and the Company’s respective debts within six months from the date of the order and comply with all requirements under the arrangement (and advise the Board accordingly, including of any default or cancellation of that arrangement).

15. The Board also advised Mr Peroy that he and the Company needed to ensure that all income tax returns (ITRs) and business activity statements (BASs) were lodged on time in the future, and that any failure to comply with the Board’s order, and/or failure to comply with their taxation obligations, may result in termination of Mr Peroy’s tax agent registrations.

16. On 7 November 2019, the Board had made the following findings with respect to Mr Peroy: 

    Mr Peroy had breached subsection 30-10(2) of the Code by:

    (i)failing to lodge his personal ITRs by their respective due dates for the years ending 30 June 2011 to 30 June 2017;

    (ii)failing to pay director penalties of $437,445.57 to the ATO;

    (iii)failing in his capacity as director, to cause the Company to lodge ITRs as and when they fell due;

    (iv)failing, in his capacity as a director, to cause the Company to lodge BASs as and when they fell due;

    (v)failing, in his capacity as a director, to cause the Company to pay its tax liabilities as and when they fell due.

17. The Board issued to the Company a written caution under paragraph 30-15(2)(a) of the TASA for failure to comply with the Code and an order under section 30-20 to the same effect as that issued to Mr Peroy.

18. The Board’s reasons were:

    (a)the Company had breached subsection 30-10(2) of the Code in that it did not comply with the taxation laws in the conduct of its personal affairs by failing to:

    (i)lodge its ITRs by the respective due dates for the years ending 30 June 2011 to 30 June 2018;

    (ii)lodge 37 monthly activity statements (AS) by their respective due dates between 31 July 2014 and 31 May 2019;

    (iii)lodge 18 quarterly BAS by their respective due dates for periods ending between 30 September 2014 and 30 June 2019; and

    (iv)pay its Client Activity Centre (CAC) and superannuation guarantee (SG) debts to the ATO.

19. On 7 November 2019, the Company’s Integrated Client Account (ICA) debt was $894,700.50 and its SG debt was $31,085.39.  

    The reviewable decisions

    Proceedings 2022/0168

20. On 10 June 2021, the Board sent Mr Peroy a Notice of decision to investigate (the Notice) pursuant to Subdivision 60-E of the TASA. It specified that the conduct to be investigated related to alleged failure to comply with the following provisions of the Code: subsection 30-10(2) (You must comply with the taxation laws in the conduct of your personal affairs) and subsection 30-10(14) (You must respond to requests and directions from the Board in a timely, responsible and reasonable manner).      

21. The Notice referred to the 2019 order and stated that the most recent contact with the Board was on 13 May 2021 when Mr Peroy’s representative stated that they planned to meet electronically with the ATO the next week with a view to finalising a resolution to the payment arrangement sought by Peroys and advising that we will be in contact with an update following the meeting. As of the date of the Notice, there was no record that a formal arrangement with the ATO had been entered into in relation to Mr Peroy’s personal debts and the Company’s debts. On 10 June 2021, the payable and due debts were:

    ·Mr Peroy’s personal Pay As you Go Withholding (PAYGW) Director Penalty account was $483,483.24; and

    ·The Company’s debts were: ICA $931,589.98; SG $38,832.76.

22. The notice stated that Mr Peroy and the Company had completed the ITRs and BASs.

23. The investigation proceeded. 

24. The Applicants’ solicitors responded to the Notice on 8 July 2021 setting out the extenuating circumstances, expressing regret and apologies, and the intention to meet and maintain compliance with all obligations to the ATO in the future.

25. The Applicants had struggled to enter into a payment arrangement with the ATO by the due date of 27 May 2020 because Mr Peroy’s home and investment property had been damaged by a storm in 2015, were subsequently deemed uninhabitable, and consequently could not be used as security for finance. He was returning to live in his home and was able to rent out his investment property. His financial situation was stabilising.

26. The Applicants had taken significant steps to stabilise and streamline the Company’s internal functions so that the issues about complying with obligations to the ATO did not reappear.

27. The Applicants were in a position to commit to finalise a payment arrangement with the ATO. They expected to enter such an agreement in the ‘coming weeks’ (following the submission of 8 July 2021).

28. In those circumstances, the Applicants requested that they be allowed the opportunity to finalise the payment arrangement with the ATO and no action be taken against them.

29. In a letter dated 27 October 2021, the Board notified Mr Peroy of his alleged non-compliance with the TASA, potential sanctions, attached a submission that its Conduct Committee would consider, and invited him to respond.

30. On 24 November 2021, the Applicants’ legal representative responded to the letter of 27 October 2021. He repeated the extenuating circumstances which began with Mr Peroy being ‘nearly killed’ in a car accident in 2013, the storm damage to his home and investment property in April 2015 and consequential remedial works, expenditure and stress, and added that a bank’s maladministration of Mr Peroy’s loans relating to his home and investment property prevented him from complying with the 2019 Order to enter into a payment arrangement with the ATO, and that NBN failures had contributed to delays lodging ITRs and payments of debts. The letter also referred to the health issues suffered by Mr Peroy and his brother, and staffing issues. The Company and Mr Peroy committed to putting in place a payment arrangement with the ATO prior to Christmas (2021) and were seeking to clear the entirety of the debts through raising additional finance within one to two years.

31. The Board’s reasons for the decision to terminate Mr Peroy’s registration as a tax agent were set out in the letter dated 23 December 2021:

    Mr Peroy had failed to comply with subsection 30-10(2) of the Code, in that he did not comply with the taxation laws in the conduct of his personal affairs:

    (a)In his capacity as an individual, he failed to lodge his ITR for the year ending 30 June 2020 by its due date;

    (b)in his capacity as sole director of the Company, he failed to lodge its ITR for the year ending 30 June 2020 by its due date;

    (c)in his capacity as sole director for the Company, he failed to lodge its monthly AS for February 2020 and its quarterly AS for March 2020;

    (d)in his capacity as an individual, he continued to fail to pay or address his PAYGW Director Penalty Account 5 debt of $483,483.24 as and when it fell due, since 27 May 2020, being the date by which the Board’s 2019 Order required him to address his taxation debts; and

    (e)in his capacity as a director of the Company, he failed to pay taxation debts as and when they fell due, including:

    a.an ICA debt of $1,018,210.68

    b.an SGC (Superannuation Guarantee Charge) debt of $39,744.60

    since 27 May 2020, being the date by which the Board’s 2019 Order required him to address his taxation debts.

32. The Board observed that Mr Peroy’s debts had only increased after the 2019 Order with no meaningful attempts to address them. He had not disputed the debt amounts.

33. Mr Peroy had failed to comply with subsection 30-10(14) of the Code as he did not respond to requests from the Board in a timely, responsible and reasonable manner as he failed to comply with the Board’s orders imposed on 27 November 2019 and he did not enter into a formal payment arrangement with the ATO in relation to his personal debts and debts of the Company within six months from the date of the Order. Nor did he comply with all requirements under the arrangement and advise the Board accordingly, including of any default or cancellation of that arrangement.

34. The Board noted that he had advised the Board that he would be entering such an arrangement on 20 September 2019 but as of the date of the letter, there had been no payments made toward the debts and no active payment arrangements made.

35. The Board was satisfied that Mr Peroy had ceased to meet the tax practitioner registration requirement that he was a fit and proper person as required by section 20-5(1)(a) of the TASA because:

    (a)He had engaged in conduct that led to breaches of subsections 30-10(2) and 30-10(14) of the Code.

    (b)He had demonstrated that he was not of good fame, integrity and character as he:

    a.had demonstrated a pattern of behaviour of failing to comply with taxation laws in relation to his individual tax affairs and the tax affairs of the Company of which he is sole director over an extended period of time;

    b.despite the requirements of the 2019 Order to lodge outstanding lodgements by 31 December 2019 and set up payment arrangements with the ATO to repay substantial debts by 27 May 2020, he had demonstrated a continued disregard of taxation laws and adherence to the requirements of that Order;

    c.had failed, in his capacity as sole director of the Company, to comply with the 2019 Order to the same effect; and

    d.had engaged in conduct that undermines the integrity of the tax system and therefore is not a person that the Board, Commissioner of Taxation and the public could have confidence would perform the functions as a registered tax agent competently and with integrity. 

    Proceedings 2022/0252 

36. The Board notified the Company in a letter dated 18 November 2021 that it had decided to conduct an investigation that may affect its registration as a company tax agent. 

37. The Company’s legal representative responded in the letter dated 24 November 2021, referred to above at paragraph 30.

38. On 9 December 2021, the Board decided to terminate the Company’s registration as a tax agent because it no longer met the registration requirements in:

    (a)paragraph 20-5(3)(a) of the TASA that its director was a fit and proper person (for the reasons previously set out in relation to Mr Peroy);

    (b)paragraph 20-5(1)(a) of the TASA that it is a fit and proper person, because:

    (i)it had failed to follow the Board Orders issued on 27 November 2019.

    (c)paragraph 20-5(3)(d)(i) of the TASA that the Company must have a sufficient number of individuals being registered tax agents to provide tax agent services to a competent standard and carry out supervisory arrangements because the Board had determined to terminate the tax agent registration of its sole director and supervising agent, Mr Peroy, on the basis that he is not a fit and proper person.

39. The Board decided not to determine a period during which the Company may not apply for registration pursuant to subsection 40-25(1) of the TASA.

40. The Board made the following findings.

41. The Company had failed to comply with subsection 30-10(2) of the Code, in that it did not comply with the taxation laws in the conduct of its personal affairs by:

    (a)Failing to lodge its ITR for the year ending 30 June 2020 by its due date;

    (b)Failed to lodge its monthly AS for February 2020 and its quarterly AS for March 2020;

    (c)Continuing to fail to pay or address its ICA debt of $1,029,601.14 as and when it fell due, since 27 May 2020 (the date by which the Board’s 2019 Order required the Company to address its taxation debts); and

    (d)Continuing to fail to pay or address its SGC debts of $39,744.60 as and when it fell due, since 27 May 2020 (the date by which the Board’s 2019 Order required the Company to address its taxation debts).

42. The Company had failed to comply with subsection 30-10(14) of the Code because it did not respond to the Board’s requests in a timely, responsible and reasonable manner, that is, the requests in the Order dated 27 November 2019.

    Events after the reviewable decisions were made

43. On 26 July 2022, the ATO advised the Board that a formal payment arrangement with the Company to address the ICA debt had been entered into on 20 June 2022, ending on 1 February 2025 with a lump sum payment of $836,708.66 for the balance of liabilities. An upfront payment of $100,000 was payable upon entering into the plan, to be followed by six monthly instalments of $5,000 commencing 30 June 2022, 12 monthly instalments of $7,500 commencing 31 January 2023, and 12 monthly instalments of $8,500 commencing 31 January 2024. The instalments were payable on the first of each month.

44. The Company was complying with the payment plan for the ICA debt. 

45. The Company reduced the SG debt from $15,593.61 on 10 June 2022 to $0.12 credit balance on 15 September 2022.

46. ATO records dated 10 June 2022 showed that the Company had added three clients to its client list and had lodged a monthly AS for one, prima facie, in breach of the stay order.

47. The Board sought an explanation from the Applicants. The Company responded that it had provided a service for an existing client by establishing and registering a subsidiary company with ASIC and the ATO. One was an existing client and the third was not active but was a prior client who requested a status of outstanding returns but no work was done and no charge was made. The Company refused to complete his ITRs.

1. The Applicants have requested remission of general interest charge (GIC) on 31 January 2022, 25 March 2022, 24 March 2023, 14 September 2023 and 9 October 2023 (by newly appointed legal representatives). Before September 2018, the ATO fully remitted accrued GIC of $114,231. In the period January 2020 to January 2021 a portion of accrued GIC was remitted as well as failure to lodge (FTL) penalties, attributable to the COVID-19 pandemic.

2. A telephone directions hearing was held on 10 October 2023 because the Applicants had not complied with directions. 

3. Mr Peroy’s most recent witness statement is dated 11 October 2023. He believed that ‘…there is no good reason for the Commissioner (of Taxation) not to remit the entirety of the GIC accrued to date’. His belief was based on having seen ‘dispensations provided to other taxpayers’ and ‘anecdotally, the Commissioner has been very forthcoming in remitting GIC’. He also believed that if the Commissioner remitted all the GIC, he could pay the primary amounts owed by the Applicants ‘quickly, i.e., no later than 2-4 weeks depending on the lender’ as he had ‘indicative conditional offers of funding, including one recently for $700,000’. In those circumstances, the Deed would be terminated by performance.  However, if negotiations did not result in the remission of the GIC in part or whole, and a payment plan negotiated or no amount of GIC being payable, ‘I cannot make a realistic proposal to the Respondent’.

4. Mr Peroy calculated that the primary amounts owed, after allowing a personal refund to him of $92,011 which would be applied to the Company’s debt, was around $568,000 and GIC and FTL fines were approximately $314,000.  

5. He believed that his recently appointed legal representative would negotiate a satisfactory outcome with the Commissioner but that ‘any formal outcome is likely to be beyond the hearing date’.

6. A telephone directions hearing was held on 18 October 2023 to deal with the Applicants’ application to adjourn the hearing.

   The position at hearing

7. The hearing was held on 19 October 2023. It was not disputed that on 17 October 2023:

   ·the Company’s outstanding debts were:

   (i)ICA debt of $984,597.39, and  

   (ii)Costs ordered by Court Account debt of $16,741.80.

   ·the Company had defaulted on its last three payments under the payment plan up to October 2023. 

   ·the Company’s AS for the period ending 30 June 2023 was overdue.

   ·Mr Peroy did not have a payment plan in place for his Director Penalty Account debt.

   ·Mr Peroy’s PAYG Withholding Director Penalty Account debt was $356,426.11.

   The Applicants’ position – before and after hearing

8. Although the final positions of the parties were set out in the documents they submitted post-hearing, it is useful to set out the Applicants’ pre-hearing position as expressed in their outline of submissions dated 11 October 2023 to demonstrate how their position changed. 

9. In the pre-hearing outline of submissions, the Applicants submitted that:

   (a)All lodgements were up to date and resulted in refunds to Mr Peroy in each year; 

   (b)The payment plan was entered into on 15 June 2022, over $300,000 had been paid towards the primary tax debt, ‘some GIC is being disputed’, and the Applicants had obtained preliminary approval for a loan of $700,000 to pay out the primary tax debt.

   (c)The Applicant had not ceased to be a fit and proper person.

   (d)No sanction was appropriate; or

   (e)If the Tribunal thought a sanction was necessary, the appropriate sanction was that Mr Peroy complete a course of education or training specific to tax lodgment timing and obligations and require him and the Company to report to the Respondent’s executive every six months for two years to confirm ongoing compliance with tax obligations.

10. The Applicants’ proposed conditions post-hearing pursuant to paragraph 60-125(2)(b) and subsection 30-15(2) of the TASA were that the Tribunal order:

    1.Pursuant to subsections 30-20(1)(b) and 30-20(2) of the TASA, Mr Peroy and the Company must:

    (a)  Lodge all outstanding lodgements with the Commissioner within two months of the order; and

    (b)  use an independent tax agent for the preparation and lodgement of their statutory lodgements with the Commissioner until at least 30 June 2026.

    2.Pursuant to section 30-25 of the TASA, suspend the registrations of the Applicants as a tax agent until the earlier of:

    (a)  the time that Mr Peroy’s and the Company’s ICAs with the Commissioner are paid in full and/or compromise, such that they have a nil balance or are in credit, and

    (b)  30 June 2024.

    and If condition (a) is not met before 1 July 2024, Mr Peroy’s registration as a tax     agent be terminated.

11. The Applicants explained that only Mr Peroy’s registration was to be suspended because the Company will appoint a director who is a fit and proper and person to the satisfaction of the Respondent, and Mr Peroy will resign. The Company will also appoint a supervising registered tax agent, which will allow the Company to maintain its registration in compliance with s20-5(3) of the TASA.

    The Board’s response to the Applicants’ post-hearing proposal

12. In response, the Board maintained its position outlined in its written and oral submissions that the appropriate sanction was termination of the Applicants’ tax agent registration. It provided the following response to the Applicant’s proposed conditions.

13. In relation to 1(a), the Applicants did not comply with the previous order the Board imposed under section 30-20 of the TASA.

14. In relation to condition 1(b), the Board does not have and should not be required to divert regulatory resources to monitor this arrangement for three years. Such an order imposes a financial implication on a person. For those reasons, the Board would not ordinarily make such an order. The option of using a registered tax agent to assist the Applicants with their tax affairs has always been an option available to them.  It is a matter for them whether they wish to retain such assistance.

15. In relation to the proposed condition 2(a), contingent suspensions are not possible under the TASA. Section 30-25 states that a suspension must be for ‘a period determined by the Board’.

16. Imposing a fixed period suspension proposed by condition 2(b) gives the Board and the Tribunal no certainty that the debt will be paid before 1 July 2024.

17. The proposed termination of Mr Peroy’s registration as a tax agent if payment of his ICA was not made before 1 July 2024 seems to relate to the termination decision currently under review and not any further investigation and regulatory actions that the Board may take.

18. In relation to the Company appointing a different director, there is no evidence that Mr Peroy has found such a person/practitioner willing to take on this burden. There appears to be no reason why the Tribunal would vary the Board’s decision in relation to the Company. 

    Consideration

19. The Applicants have failed to comply with the taxation laws in the conduct of their personal affairs (subsection 30-10(2) of the Code) and failed to respond to requests and directions from the Board in a timely, responsible and reasonable manner (subsection 30-10(14) of the Code).

20. The Board (and the Tribunal on review) is not obliged to impose a sanction. Whether it is appropriate to do so and what is the appropriate sanction depends on the circumstances of the case.

21. As pointed out by Deputy President McCabe in Bell and Tax Practitioners Board [2020] AATA 2424 at [17]:

    The legislation uses the word ‘sanction’, but administrative action is not intended to punish an agent. The Code of Conduct is intended to protect the public which uses the services of tax agents, and to facilitate the efficient operation of Australia’s system of taxation self-assessment.

22. As in Bell, the unsatisfactory conduct in this case relates to non-compliance with the taxation laws in the conduct of the Applicants’ personal affairs. That non-compliance has occurred over almost 10 years and has resulted in very large debts. Even at the time of the hearing, the Company had an outstanding lodgment of one AS and was in default of the payment arrangement with the ATO, and Mr Peroy had an outstanding debt and no payment plan in place. In addition, the Applicants had not complied with the 2019 Order.

23. Mr Peroy has faced a number of considerable difficulties in that ten year period.  However, as in Bell at [20], the Applicants’ behaviour:

    sets a poor example for (their) clients and other tax agents. It also threatens the effective working relationship that must exist between each agent and the ATO.  Even if there are no concerns about (their) integrity as such, (the Applicants’) behaviour undermines the integrity of the system of self-assessment.  That system depends on the expectation that individual taxpayers, shepherded by their tax agents, will comply with their basic obligations.

24. The Applicants’ conduct, particularly since the 2019 Order was sent to them, has demonstrated that they do not appreciate the seriousness of failing to comply with the taxation laws in the conduct of their personal affairs and not complying with the requests and directions from the Board in a timely, responsible and reasonable manner. 

25. The Applicants’ pre-hearing proposal for no sanction or that Mr Peroy undertake a course specific to tax lodgment and timing, reflected that lack of appreciation.    

26. I am not satisfied that the Applicants’ post-hearing proposals are appropriate for the following reasons.

27. Given the Applicant’s past failure to comply with an order, I am not satisfied that issuing an order under section 30-20 of the TASA to comply with their legal obligations will be effective.

28. As far as ordering the Applicants to use an independent registered tax agent for three years, that course is open to the Applicants without an order. I accept the Respondent’s objection to diverting regulatory resources to monitor the proposed arrangement and that it would impose a financial burden on the Applicants. They can choose to pay for that service.   

29. A suspension must be for a period. Suspending Mr Peroy’s and the Company’s registrations for a period is not going to ensure that the debts will be paid before the end of that period, which seems to be the intent of the proposed condition 2. The Applicants have had since November 2019 to attend to payment. Whether the mooted financial arrangement eventuates is speculative. 

30. The Company acknowledges that it is open to it to appoint a director who is a fit and proper person to the satisfaction of the Respondent.  No such person had been nominated at the time of the hearing.

31. I am satisfied that the Applicants’ breaches of the Code are so serious that the appropriate sanction in each case is termination of their registration pursuant to section 30-30 of the TASA. It is unnecessary to determine whether Mr Peroy is a fit and proper person pursuant to section 20-5(1)(a) and 20-5(3)(a) of the TASA.

32. Taking into account the conditions the Applicants proposed post-hearing, the termination in each case takes effect on 1 July 2024. That will give the Applicants’ a final opportunity to fulfil the intention expressed in those conditions.  

33. I will not determine a period during which the Applicants may not apply for registration pursuant to section 40-25 of the TASA.

34. It is unnecessary to consider the alleged breaches of the stay.

    DECISION

35. In proceedings 2022/0168, relating to Mr Peroy, the reviewable decision is varied to the extent that the termination takes effect on 1 July 2024.

36. In proceedings 2022/0252, relating to Peroys Pty Ltd, the reviewable decision is varied to the extent that the termination takes effect on 1 July 2024.

I certify that the preceding 83 (eighty-three) paragraphs are a true copy of the reasons for the decision herein of Mrs J C Kelly, Senior Member

.................................[sgd].......................................

Associate

Dated: 10 January 2024

Date of hearing:

19 October 2023

Date final submissions received:

26 October 2023

Counsel for the Applicant:

Solicitor for the Applicant:

Mr M Bennett

Mr A Athanasiou, Thomson Geer

Counsel for the Respondent:

Solicitors for the Respondent:

Mr T Liu

Ms S Pannam & Ms J Mills, Tax Practitioners Board