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A new poll by CPA Australia has revealed whether people are keeping their record-keeping obligations in mind, or putting them to one side, as the halfway mark through the 2021-22 income tax year passes.
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‘Out of sight, out of mind?’: Approach to record-keeping revealed
19 January 2022
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CPA Australia’s latest LinkedIn poll asked: “We’re over halfway through the 2021-22 income tax year! How would you describe your approach to record keeping so far?”
The results paint a varied picture. The majority, 36 per cent, cited their approach was “Good” however “there are gaps”.
Meanwhile, 30 per cent rated their approach as “A+”. Eighteen per cent said they haven’t thought about it, and 15 per cent said they were “keeping a mental record”.
Commenting on the results, Elinor Kasapidis, senior manager Tax Policy, CPA Australia, said: “It’s a bit alarming to think that over one-third of people aren’t keeping records of their income and expenses. And another third acknowledge that there are gaps in their record keeping.
“Based on our poll, it seems that plenty of people are adopting an “out of sight, out of mind” approach to their taxes. Only 30 per cent of respondents are up to speed with their record keeping obligations.
“Trying to retrospectively construct records at tax time isn’t a good strategy. This approach is likely to leave the taxpayer worse off. Inevitably, some deductible expenses will be forgotten or the records needed to prove them lost.”
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Ms Kasapidis noted that the shortcut method for calculating working-from-home expenses offers an alternative to hanging onto receipts, “however, individuals must still maintain a record of the hours they worked”.
“Digital records such as online diaries and meeting invitations make this easier,” she added.
Going forward, Ms Kasapidis encouraged tax agents to remind their clients of the importance of record-keeping.
“We’re just over half-way through the 2021-22 tax year. Now is a good time for tax agents to remind their clients of the importance of record keeping,” she said.
“It’s much easier for tax agents to prepare personal income or business tax returns if their client has done the record keeping ‘leg work’ during the year.
“The ATO has highlighted that it’ll be checking expense claims closely come tax time. Encouraging clients to spend more time on record keeping now could save them time, money and grief later on.”
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