Legal & Accounting Industry News – NEWSLETTER 247

ACT Tribunal Bans Two Lawyers Over False Affidavit

Two Canberra-based lawyers have been publicly reprimanded and banned from applying for a practising certificate for two years after being found guilty of serious professional misconduct involving a false affidavit.

Findings by the ACT Civil and Administrative Tribunal

The ACT Civil and Administrative Tribunal (ACAT) agreed with the Law Society of the ACT that both solicitors, referred to as the “vendor solicitor” and the “advising solicitor”, engaged in conduct that breached their professional duties of honesty and integrity.

The tribunal determined that the vendor solicitor knowingly swore an affidavit containing false information in support of a statutory demand.

The affidavit wrongly claimed that:

• No instalments of a purchase price for a law firm (the debt in question) had been paid.
• The purchase price was due and payable; and
• There was no dispute about the existence or amount of the debt.

Despite knowing the affidavit was misleading, the vendor solicitor instructed that proceedings be defended when an attempt was made to set aside the statutory demand, an action the tribunal found was taken for an improper purpose.

The tribunal described his conduct as a “serious failure to honour the trust and confidence required of lawyers”

The Advising Solicitor’s Role

The advising solicitor was found to have signed and issued the statutory demand while knowing the affidavit contained false information and that the matter was in genuine dispute. He also participated in the preparation, settlement, and witnessing of the affidavit.

The tribunal noted that the advising solicitor had shown no remorse or insight into his actions, raising concerns about his fitness to practise.

However, given his previously unblemished career and good character, the tribunal decided that removal from the roll was not warranted, instead imposing a public reprimand and two-year practising restriction.

Tribunal’s Decision

In its findings, the tribunal said both lawyers’ actions had undermined the integrity of the profession, warranting firm disciplinary action.

“A public reprimand maintains the standards of the profession and has a deterrent effect, both generally and for the advising solicitor in particular,” the tribunal stated.

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ATO Puts Tradies and Professional Service Providers Under the Spotlight

Small businesses in the construction and professional services sectors are set to face increased scrutiny from the Australian Taxation Office (ATO), as the regulator sharpens its focus on industries with recurring compliance issues. 

ATO Turns Up the Heat on Key Industries

In its latest update, the ATO identified construction firms and professional, scientific, and technical service providers including engineers, consultants, and accountants as areas of concern for 2025.

“We continue to see recurring issues in specific industries,” said ATO Assistant Commissioner Angela Allen. “We’re watching closely, conducting audits, and applying penalties and interest where needed.”

Allen urged small businesses to be proactive: “If you’re struggling to meet your tax obligations, don’t ignore the issue. Seek help early whether from your tax adviser, business adviser, or the ATO directly.”

The Common Compliance Pitfalls

The ATO highlighted several red flags frequently detected during audits, including:

• Underreporting income or omitting sales in BAS or tax returns.
• Overclaiming deductions and GST credits.
• Incorrect R&D Tax Incentive (R&DTI) claims, particularly for ineligible activities.
• Failing to register for GST despite meeting the threshold.
• Reporting private expenses as business-related.

Many small firms, especially subcontractors, were also found to have failed to seek independent advice from registered tax agents – a step the ATO strongly recommends.

What This Means for Business Owners

The ATO’s message is clear: get your tax reporting right. Businesses that fail to meet their obligations risk audits, amended tax returns, and penalties with added interest.

To stay compliant, the ATO advises small businesses to:

• Report all assessable business income accurately.
• Claim deductions and offsets only for legitimate business expenses.
• Ensure R&DTI claims meet eligibility criteria and are backed by records.
• Seek advice from qualified, registered tax professionals.

Supporting Compliance, Not Punishment

While the ATO is tightening oversight, it also says its goal is to help businesses succeed. “As small businesses grow, their tax and super obligations become more complex,” Allen noted.

The ATO aims to support small business owners, particularly those with turnovers between $1 million and $10 million, to understand their responsibilities and avoid costly mistakes.

“Our focus is on creating a level playing field,” Allen said. “We want to ensure honest businesses aren’t disadvantaged by those cutting corners.”

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