Tougher Penalties for Tax Advisors — What PAYG Employees Should Know
The Albanese Government is cracking down on dodgy tax advisors. Here's what the new sanctions mean for novated lease holders and salary packaging. Read more.
The federal government has announced stronger penalties for tax advisors who do the wrong thing — and it's not a minor tweak. According to the Treasury Ministers release, the Albanese Government is legislating criminal penalties for unregistered tax preparers, new civil penalties for breaches of the Code of Professional Conduct, and increased penalty amounts across the board.
The maximum duration for termination of a tax practitioner's registration is being doubled to 10 years. The Tax Practitioners Board (TPB) is also getting new powers: infringement notice penalties, enforceable voluntary undertakings, and the ability to impose interim and contingent registration suspensions. These changes respond directly to the PwC tax leaks scandal and recommendations from an earlier TPB review.
What this means for novated lease customers
If you're a PAYG employee using a novated lease, you're probably not the one gaming the tax system — but the advisor or employer arranging your salary packaging could be. These reforms are designed to raise the bar on who can legally prepare and advise on tax-related arrangements, which includes the FBT and income tax treatment underlying your novated lease.
In plain English: the rules that govern the people who structure your salary packaging are getting tighter. That's generally a good thing. It means less room for shonky operators to cut corners on compliance, and more accountability if they do. For customers working with a licensed, registered broker — one that's ACL-licensed and AFCA-registered, like millarX — this kind of reform reinforces why credentials actually matter.
It also serves as a useful reminder to check who's actually arranging your lease. Not every novated lease provider is operating under the same level of oversight. Registered, accountable advisors are now facing real consequences if they get it wrong — and that protects you.
Common questions
Does this change the FBT exemption on electric vehicles?
No. This reform is about advisor conduct and penalties — it doesn't alter the FBT exemption for eligible EVs or the existing novated lease rules. Your entitlements remain unchanged.
How do I know if my novated lease provider is properly registered?
Check that they hold an Australian Credit Licence (ACL) and are registered with AFCA. You can verify ACL status on ASIC's register and TPB registration at tpb.gov.au. Don't take a broker's word for it — look it up.
What was the PwC tax leaks scandal and why does it matter here?
The PwC scandal involved confidential government tax policy information being shared with clients. The new penalties are partly a direct response — raising the consequences for tax practitioners who breach professional conduct standards.
Could these changes affect my existing novated lease arrangement?
Unlikely, if your arrangement was set up correctly by a registered provider. These reforms target advisor misconduct, not compliant lease structures. If you're unsure about your arrangement, it's worth a review.
Why does it matter which broker arranges my novated lease?
Because the tax treatment of a novated lease — including GST, FBT and income tax — depends on the arrangement being structured correctly. A broker who cuts corners on compliance exposes you to risk, not just themselves.