The Updated Code of Professional Conduct: Key Changes Explained

2025 marks a pivotal moment for tax practitioners and the businesses that rely on them. The Tax Practitioners Board (TPB) has made important updates to its Code of Professional Conduct to enhance ethical standards, improve compliance, and create fairness throughout the industry.

These changes aim to bolster community confidence in the profession; non-compliance can lead to severe consequences, including termination of registration for practitioners.

For SME owners and financial service professionals, staying compliant may feel overwhelming amidst ongoing announcements and regulatory jargon. But with the right guidance and understanding, navigating these updates can be straightforward and manageable.

What You Need to Know About the Updates

The revised Code of Professional Conduct introduces several new obligations for tax practitioners. These changes address misconduct, uphold ethical practices, and ensure consistent standards across firms of all sizes. 

While larger firms have been required to comply since 1 January, smaller firms (with 100 or fewer employees) have until 1 July 2025 to implement these updates.

Key Changes Practitioners Must Implement

The TPB announced eight changes to the code in October 2024. These include:

1. Ethical Standards: Practitioners must actively promote the ethics of the tax profession.
2. Honesty: False or misleading statements to the TPB or the Commissioner are prohibited.
3. Conflict of Interest: Firms must take reasonable steps to identify, disclose, and avoid material conflicts of interest, particularly in dealings with government agencies.
4. Confidentiality: Tax agents must maintain confidentiality in all interactions with Australian government agencies.
5. Record-Keeping: Practitioners must retain tax service records for at least five years, even for former clients.
6. Supervision and Training: Teams must possess the necessary skills and be supervised to ensure adherence to standards.
7. Quality Management: Firms need a robust system to monitor compliance with the code, including maintaining appropriate documentation.
8. Client Communication: Tax agents must keep clients informed about matters relevant to their services.

The TPB published detailed guidance documents in December 2024 to support firms in aligning with each of these new obligations. The documents outline practical steps and best practices to ensure concerns are addressed. 

How Will These Updates Impact Your Business?

Many of these requirements will likely feel like formalising what you’re already doing — assuming your firm already follows sound ethical and operational practices.

However, they also serve as an excellent opportunity to evaluate your existing processes and ensure you meet the highest standards. Seeking professional advice can provide peace of mind and help identify any gaps in your compliance efforts.

For business owners, these changes bring added accountability to the tax profession. By aligning with the updated code, tax practitioners can provide:

• Greater Reliability: Stricter standards reduce the likelihood of errors, protecting businesses from penalties or financial risks.
• Improved Transparency: Clear communication with clients fosters trust and ensures everyone is on the same page.
• Stronger Partnerships: A commitment to ethical practices reinforces confidence in outsourced accounting services.

Navigating the Code of Professional Conduct in 2025

The Code of Professional Conduct updates are here to elevate the tax profession, ensuring higher standards and greater trust for businesses like yours. While compliance may seem daunting, most firms will find these changes reasonable and achievable with the right preparation.

By understanding and implementing these new obligations, you can mitigate potential risks, improve your operations, and strengthen client relationships. For tax practitioners, this is an opportunity to establish yourself as a trusted partner in your clients’ financial success.

If you’re unsure where to begin, AFP Accounting is here to help. Our team specialises in accounting services that save you time and money while ensuring compliance with regulatory requirements.

Download our free eBook today for practical insights into the Code of Professional Conduct and other upcoming changes, or contact us to discuss how we can support your business through these changes.

Let us help you take the guesswork out of compliance and position your business for success in 2025 and beyond.