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CPA Australia says ATO data reveals more people using the myTax app just as returns are getting more complicated.
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Shift away from tax agents ‘holds pitfalls for crypto, gig workers’
11 August 2022
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The shift away from tax agents to self-lodging via the myTax app holds risks for those holding cryptocurrency or earning through the sharing economy, said CPA Australia.
Figures released by the ATO this week showed myTax lodgements growing fivefold since the app was introduced and 9 per cent in 2019–20 alone, eroding the share of returns done by tax agents from a peak of almost three-quarters in 2013–14 to less than two-thirds.
But CPA Australia senior manager of tax policy, Elinor Kasapidis, said some people relying on the app could fail to recognise potential pitfalls.
“The tax office has made it easier through things like data matching and prefill for Australians to do their own tax returns,” she said, “and for those with simple affairs, they may not have the money for a tax agent, it’s important to be able to access those services. We support digital solutions that make life easier.
“But it also highlights a concern that perhaps people don’t realise when they need to see a tax agent.
“For example, recently with cryptocurrency, some people didn’t know that they had to pay tax.
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“Having a tax agent can make sure that people are aware every time they do something new, or they’re participating in the sharing economy, they set themselves up rather than being chased later on by the tax office.”
Cryptocurrency tax is one focus of ATO compliance for the tax year just ended while companies running the sharing economy – represented initially by taxi apps such as Uber or accommodation sharing like Airbnb – will soon have mandatory reporting requirements that turn the spotlight on gig workers.
The director of tax communications at H&R Block, Mark Chapman, admitted the ATO myTax app was a hit with younger taxpayers especially.
“So myTax basically has taken a dominant role in relation to a lot of low-income individuals and also particularly younger people lodging their first tax returns, they tend to migrate straight into myTax,” he said.
For 2019–20, myTax was used for almost 5.2 million returns, an increase of more than 440,000 on the year before, while tax agents saw 100,000 fewer clients.
Despite the decline, Mr Chapman said H&R Block numbers had held up well but the firm needed to reposition itself to handle growth areas such as crypto investments, shares and dividends, rental properties, businesses and the sharing economy.
“We’ve not really seen a significant decline in our client base but it’s something we need to be aware of,” he said.
“We need to be proactive, developing a particular specialism so, you know, rental properties, businesses, etcetera, you know, those more complicated returns, which can offset the loss of some of those very straightforward salary returns.
“People who have those sources of income tend not to be self-lodgers because it tends to be too complicated, there are [too] many ins and outs, too many things to worry about.
“So basically, if we can get a good foothold in that market, which we have done, then that hopefully should hold us in good stead.”
He said the average H&R Block client paid $100–$200 for their return, in line with ATO figures for the median cost of managing tax affairs in 2019–20 of $180, while the average at $333 was influenced by small numbers of taxpayers who incurred high costs.
“Those ATO figures are probably skewed by some of these extremely wealthy people who might have litigation on hand, they might have sophisticated tax advice. That tends to skew that figure,” Mr Chapman said.
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