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Tax Law

Tax law is a complicated area of law concerning taxation. The Australian Tax System is based on a mix of income, corporate, and sales taxes. These taxes are collected by the Federal (and sometimes, State) Governments and distributed to provide public services.

Income tax requires that a portion of the income of those who earn above the nominated threshold (currently $18,200 per annum) be withheld by their employer. Corporate tax is the tax applicable to businesses. Finally, the Goods and Services Tax (GST) is a 10% fee on the majority of goods and services.

Although these are the three fundamental elements of the Australian Tax System, there are many other taxes (such as Capital Gains Tax or Payroll Tax) that apply in different circumstances.

The Australian Taxation Office (ATO)

The ATO oversee all tax administration and enforcement in Australia. Both individuals and businesses have to lodge their tax returns and other tax-related documents with the ATO. If these requirements are not complied with, or if you are found to have avoided or evaded paying tax, harsh penalties will apply.

What is a tax lawyer?

Tax lawyers provide expert advisory work and advice on tax audits, tax disputes against the Australian Taxation Office (ATO), taxation concessions, taxation planning, international tax and tax debts. These lawyers can assist business owners with drafting and reviewing legal documents that deal with tax issues. These lawyers will commit to ensuring you comply with Australia’s taxation system and are well-informed of your rights and obligations.

If an issue can only be resolved in a legal proceeding at court, taxation lawyers will represent you or your business in litigation.

What can a tax law professional do for me?

A taxation lawyer will do transactional, financial and business work for an individual or business. They are experts at interpreting and applying taxation laws to your situation in pursuit of attaining a personalised outcome that suits your needs. There are numerous risks involved if you do not consult with taxation lawyers, such as severe fines.

Taxation lawyers are proactive and will take the necessary steps to prevent you or your business from suffering detrimental legal consequences.

5 tips when hiring a tax lawyer

Engaging with a tax lawyer can be overwhelming as there are many lawyers and law firms to choose from. It is recommended you consider these tips before making a decision on which person you want as your taxation lawyer:

1. Find a qualified lawyer that understands and suits your needs. Seek out a lawyer that is personable and has extensive knowledge about your situation or industry your business operates in. Look at their profile, awards and clients for an idea.
2. Consider more than one lawyer before making a decision. It is important you find someone who has the skills and is willing to work hard on your behalf.
3. Find a lawyer working in tax law that is compatible with your budget. Ask about legal costs and fees. If a lawyer advertises the first consultation is free, then enquire for an estimate for legal work following this.
4. Determine the type of relationship you want with your lawyer. Taxation lawyers will often do repeat work for clients and a good relationship may reduce costs and improve turnaround time.
5. Read the retainer your taxation lawyer provides. It will inform you of the obligations held by both you and your lawyer, as well costs.

How much will a Tax Lawyer charge?

Hourly rates and Court fees

Fees charged by a tax lawyer can be on a fixed-fee or hourly basis. Hourly rates differ amongst lawyers, but there are lawyers who provide their fees ‘on-spec’ or on a ‘no win no fee’ basis. This can be an attractive alternative if you want piece of mind at the conclusion of your matter.

What can a lawyer legally charge?

Costs can rise very quickly in litigation. However, this is sometimes hard to avoid when work is being done by a lawyer on an hourly basis. Where fixed-fees are not offered by the lawyer, you should expect to be invoiced on a monthly basis. Lawyers are required to adhere to the rules outlined in the relevant acts. For example, in NSW and Victoria, this is the Legal Profession Uniform Law 2014.
Lawyers are required to provide to their clients a document called a ‘costs disclosure’ if your costs will be higher than $750.00. This document will outline how costs will be calculated in relation to your case. Also be mindful that costs are divided into ‘professional costs’ and ‘disbursements’, and you will be expected to pay for both. Professional costs are the costs of the actual work done by the lawyer, whilst disbursements cover incidentals such as court filing fees, telephone calls, photocopying charges – amongst other things.

What if I don’t agree with the costs?

You have the right to request an itemised bill that will outline how much time was spent on each task in relation to your matter, and how this adds up to the fee you’re requested to pay. If you wish to dispute the cost, you can make a complaint to the The Office of the Legal Services Commissioner (OLSC) and they will investigate the matter and may allocate a costs assessor. You can also take further legal action in the Courts if you feel you have been unfairly charged.

Useful reading:

• What Happens If You Don’t Lodge Your Tax Return On Time?
• Tax Benefits of Registering A Business
• What To Do If You’ve Lost Your Tax File Number (TFN)
• How to Apply for a Tax File Number Online