Login
iscover
CPA Australia says ATO data reveals more people using the myTax app just as returns are getting more complicated.
Shift away from tax agents ‘holds pitfalls for crypto, gig workers’
11 August 2022
•
6 minute read
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.
“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.
You need to be a member to post comments. Become a member for free today!
- 2019-20 lodgement numbers are old news. Any more recent lodgement statistics about the 2020-21 lodgements? Feels like the ATO are hiding the numbers and only announce statistics that suit their narrative.0
- People doing their own returns are missing out on legitimate claims! I am not so sure about that. My experience is that people doing their tax returns tend to over-claim. When they come to us to get their tax done, we often have to explain to them what they have been claiming in the past is not deductible. I see no problem with the ATO getting people to do their own returns. The whole tax system is becoming increasingly dysfunctional anyway. Runaway red tape, staff shortages and very poorly trained ATO officers. Even tax agents are caught up in this as the growing inability to attract competent staff increasingly means accounting firms are putting out some very low-quality, error-ridden work. On the basis that the whole system is dumbing down I do not see it as a problem – it is the new reality.1
- As above the ATO are doing this to suit their own interests. People doing their own returns are missing out on legitimate claims. Many new clients now have made a total mess of their affairs doing it themselves and come to us to get it fixed. Recent frauds on GST claims etc are possible because people do their own returns with advice on Facebook. The cost to overall tax revenue and in investigations must be massive. Government awake?1
- Tax management should not be so difficult that you need to see an accountant. (Especially at 20-25 years of age). Just remember the ATO always makes decisions in their favour, so when doing your own tax - simple errors are always in your favour. No it's not deliberate but merely a misunderstanding with no desire to reduce tax payable. (LOL)1
- I find that have to amend past returns of new clients who believed the tax office mantra that you just push a button and it's done.0
- Still blows me away that people don't think crypto activity is reportable (depending on what you're doing, of course).0
- And in addition to my above comment, I recently had a retired single lady come to me enquiring why she wasn't receiving the full age pension. When I looked into her Centrelink account I discovered she had been having tax taken out of her pension for the last five years. Her previous tax agent had not been in touch with her since she retired. She had over $15,000 of accumulated PAYG tax sitting in at the tax office which was not required, with no tax liability at all during those five years. Needless to say she was very pleased to have her returns brought up to date and get that money back. She was also very pleased to have the tax deduction from her pension stopped. The data matching between Centrelink and the Tax Office failed her miserably. Good one Cenetrelink. Good one ATO.0
- The ATO is deliberately bypassing tax agents in their engagement with taxpayers, even where taxpayers have used a tax agent previously. I have two elderly clients who received a pre-filled Claim for Refund of Franking Credits based on dividends from a company they hold shares in. What the tax office didn't allow for was the AMIT statement from an Australian share fund they have recently invested in. Had I not also been their financial adviser they may well have missed nearly $4,000 in refunds from that fund. Good one ATO.2
