Chapter 1 of 16 · 10 min read · reviewed 31 July 2026

Start here

Overview

Understanding the new Code duties

The new Code duties have created a fair amount of anxiety in small practices. Some practitioners have been told they need a large-firm compliance manual. Others have heard that every client mistake may need to be reported. Neither view is a useful starting point.

The better way to understand the changes is this:

Most tax practitioners were already expected to act honestly, take reasonable care, protect client information and provide competent services. From 1 July 2025, small practices also became subject to clearer duties about records, quality systems, client disclosures and what to do in some serious false-statement situations.

The change is not a requirement to create paperwork for its own sake. It is a requirement to run the practice in a way that gives you reasonable confidence that the Code is being followed—and to keep enough evidence to show that.

What applies

What applies from 1 July 2025?

The combined Code comes from two places.

The original Code

Section 30-10 of the Tax Agent Services Act 2009 contains 17 Code items. Items 1 to 16 are direct duties. They cover:

  • honesty and integrity
  • your own tax affairs
  • client money held on trust
  • acting lawfully in a client's best interests
  • conflicts
  • confidentiality
  • competence and reasonable care
  • other professional responsibilities.

Item 17 requires practitioners to comply with additional duties made by legislative instrument.

The eight additional duties

The Tax Agent Services (Code of Professional Conduct) Determination 2024 adds duties dealing with:

  1. ethical standards and public trust
  2. false or misleading statements
  3. conflicts when undertaking professional activities for government
  4. confidentiality of government information
  5. proper client records
  6. competence and supervision of people working on your behalf
  7. quality management systems
  8. information that must be given to current and prospective clients.

For a registered practitioner with 100 or fewer employees as at 31 July 2024, these duties applied from 1 July 2025. That includes most sole practitioners and small firms.

Sole practitioners

What this means for a sole practitioner

A sole practitioner does not need to copy the procedures of a national accounting firm. The TPB's guidance recognises that a quality system should fit the size and nature of the practice.

However, being the only person in the practice does not remove the obligation. A sole practitioner still needs a sensible answer to questions such as:

  • How do I decide whether to accept a new client?
  • How do I identify conflicts in a family group?
  • What do I do when records do not make sense?
  • What do I keep on a straightforward return file?
  • What extra work do I document for a complex advice matter?
  • How do I deal with an error found after lodgment?
  • Who can access the practice if I become seriously ill?

The answers do not all need separate policies. A short manual, supported by working checklists and proper client files, may be enough for a straightforward sole practice. The important point is that the system reflects what you actually do.

Labels

Three labels used in this guide

To avoid turning good-practice suggestions into invented law, the guide uses three labels.

Legal requirement

— a duty stated in the Act or Determination.

TPB guidance

— the TPB's published explanation or example of how it considers the duty applies.

Practical approach

— a sensible control that may help a small practice comply and show evidence of compliance.

For example, the law requires a quality management system to be documented and enforced. It does not say that every sole practitioner must review exactly five files each year. Reviewing a small sample of files is a practical way to test whether the system is working.

The central idea

The central idea: the file and the system must tell the same story

Imagine a practitioner says:

“I always ask clients about unusual deductions.”

That may be true. But if the client file contains only a final tax return, there is no record of what was asked, what the client said or how the practitioner dealt with the answer.

Now imagine the practice manual says every return receives a final review, but contractor-prepared returns are lodged without any review evidence. The written policy and the actual practice do not match.

The Code is concerned with both:

  • the professional decision made on the client matter; and
  • the practice controls that support reliable decisions across all matters.

Documentation

Do not confuse documentation with volume

Good documentation is not measured by page count.

For a salary-and-wage return with clear records, a completed checklist, supporting documents, a few query notes and the client's approval may tell the full story.

For a trust restructuring, residency advice or disputed deduction, the file may need a detailed record of facts, assumptions, technical research, risks and advice.

The question is not, “How many pages do I have?” It is:

Could another competent practitioner understand what I was asked to do, what I relied on, what I decided and why?

Reflect

Before moving on

Take a moment to think about your own practice.

  • Which Code duties are already well controlled?
  • Which duties are handled mainly from memory?
  • Which process would be difficult to prove if the TPB asked for evidence?

Keep those answers in mind as you work through the course. The goal is not to produce a perfect manual in one sitting. It is to identify the few changes that will make the practice more reliable and easier to defend.

Reference

Official sources