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Individual lodgement numbers are ahead of where they were last year, and some tax professionals believe the royal commission and stricter lending conditions are driving businesses and individuals to lodge early.
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Individuals speed up returns, royal commission drives early rush
14 September 2018
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Tougher lending conditions in the wake of the royal commission and a tighter regulatory environment are continuing to impact clients’ access to finance.
Speaking to Accountants Daily, Anderson Tax and Consulting director Debra Anderson said she has seen a spike in clients wanting to lodge their returns earlier in the year and believes it has to do with the new conditions laid out by the banks.
“This year… all businesses want everything done earlier, and I think it has to do with the banking royal commission,” said Ms Anderson.
“The banks have really tightened up on their lending and in the past you would have been able to give them the 2017 tax return and give them draft accounts for 2018 and the banks would be fine.
“This year, that’s not good enough — the banks want lodged 2018 returns and I’ve been saying to clients in the last six weeks that we cannot expect to have finalised returns in August.”
Accountants Daily can reveal that individual returns have also come in earlier this year, with returns lodged by self-preparers running by about 10 per cent ahead of last year and agent-prepared returns coming in 2 per cent ahead.
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For Ms Anderson, it’s understandable why the banks are getting more stringent with their processes, but she believes it may be an “over-correction”.
“I can give [the banks] letters, reports, but it is not good enough, so it has been a painful process because you can’t charge for it,” said Ms Anderson.
“I did a letter for a client yesterday saying the client would be using the ute for business purposes and the bank wasn’t happy with the wording, and I had to change it from business use to predominantly business use. The banks are getting really specific on what they want.
“I can see why the banks have done it, but they are probably over-correcting the market. That’s been quite frustrating from a practitioner’s perspective.”
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