‘Desperate’ Aussies cause tax time chaos
Last year, the tantalising promise of Scott Morrison's $1080 tax offset caused an massive spike in early tax return lodgements as Aussies rushed to get their hands on that extra cash.
By mid July, 1.3 million taxpayers had already filed, up by a staggering 600,000 compared to the same time in 2018.
There was such a flurry that the Australian Taxation Office even urged Australians "to wait a few weeks before lodging" - but now, industry insiders are expecting that frenzy to be even greater in 2020.
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H & R Block director of tax communications Mark Chapman said there would probably be "an even bigger spike" in early lodgements this year compared to last year's record deluge.
"A lot of people will be reliant on a refund this year, and that could well mean that people actually look to lodge their tax return as soon as possible in early July rather than later in the month," he told news.com.au.
"And that tax offset is coming around again this year which will be another incentive for people to lodge early.
"People will be desperate to get their hands on their refunds ASAP, especially people who have lost their job over the course of the year who are experiencing financial stress."
According to Ben Johnston from leading Sydney accounting firm Willett Johnston Partners, Aussie tax professionals were now preparing for what could potentially be the "busiest period" of their careers.
"We're bracing for an onslaught because I think a lot of people will be pretty reliant on refunds this year, and they will be keen to get it processed as quickly as possible," he said.
"There are two things to be careful about - one, even if you do get your tax return in early, historically, the ATO has taken a couple of weeks to start processing them so even if you lodge on July 1, there's usually a delay in issuing notices of assessment.
"And secondly, a lot of information relevant to preparing a tax return won't be available until some time in mid to late July - things like private health insurance statements, dividend notices and if you've got an employer who is still manually reporting, they have until mid-July to give out PAYG payment summaries.
"So if you rush in and do it within the first few days, there's the risk of omitting information pertinent to your tax return."
In the mean time, it is crucial to start gathering all the information you'll need to give your accountant now to make sure you're well prepared by the time your appointment rolls around.
"Make sure you're prepared now so your agent can lodge your return straight away - start gathering the information you'll need on things like investment properties, rental income, work-related expenses and anything else you plan to claim and start collating tax invoices," Mr Johnston urged.
He said while the industry was expecting an influx of Aussies to lodge their returns earlier than usual, he was confident the ATO would be able to cope with the increased demand and that there wouldn't be major delays on the ATO's end.
"But make sure you plan ahead, make your tax appointment early and have all the information you need ready, because there is a risk that if you fail to declare all your income, it can lead to an audit or you may have to pay your tax agent to amend your tax return to include any income or expenses you didn't include originally," he warned.
Meanwhile, a spokeswoman told news.com.au while there were always some who lodged early, the ATO was expecting more early lodgements in 2020.
"We know 2020 has been difficult for many, so we expect some people may want to complete their returns even earlier than they might have in previous years," the spokeswoman said.
"We often see early lodgers being more prone to making some obvious mistakes, particularly forgetting to include all their income. This can either delay processing the tax return or result in a bill later on.
"Those who lodge through our online myTax service can generally expect to have their refund processed in less than two weeks. In fact, many refunds are in people's hands in under a week. We expect to maintain this processing speed this tax time."
Originally published as 'Desperate' Aussies cause tax time chaos