iscover Managing client anxiety about when to lodge tax returns
BusinessWith mainstream media outlets awash with think pieces saying everything from ‘lodge now before it’s too late’ to ‘don’t rush to file’, it is imperative that accountants impart the wisdom that “chasing the ‘right’ tax refund” is always preferable to chasing what they think is best.
As is the case every EOFY, taxpayers are currently being inundated with online content on lodging their tax returns, with commentary from mainstream media outlets spanning the full spectrum of opinion. For individuals who may only pay passing attention to their taxation obligations, the wave of varying, if not contradictory, messaging may create uncertainty or even anxiety.
In conversation with Accountants Daily, CATS Accountants director Tim Garth – who also co-hosts the Two Drunk Accountants podcast with fellow CATS director, Dan Osborne – reflected on the mixed messaging that Australians will often see at EOFY, and how best accountants can help them navigate it to ensure returns are lodged properly and at a suitable time.
“My take is that it is always better to take a breath and hold off lodging returns until later in July at the earliest, even later for other clients with more complex matters or investments. Clients are, of course, desperate for their refunds, but they could get a rude shock down the line if additional income populates into the ATO’s portal for them, which was not included in their original tax lodgment,” he said.
“The ATO will most likely automatically amend their return and request repayment of the tax, potentially with some interest if it took them a while to find and process it. By this time, the client has almost certainly spent their refund on something and is left with a debt.”
“Don’t be on the opposite end of the spectrum and lodge late, either!”
“I think what taxpayers forget is that rather than chasing the ‘best’ tax refund, they should really be chasing the ‘right’ tax refund – otherwise it may come back to haunt you,” he said.
Such advice to clients will be imperative at what Garth called “a crazy time” for the profession, in the face of the newly legislated budget measures and myriad new regulatory requirements for business owners.
“Heads are spinning from the federal budget changes, and the doubt this has cast on entity structuring/trusts/CGT for small business owners. And this is aside from the many ATO PCGs run through in the last few years (effectively changing precedent/interpretations/rules without actually changing any laws – flying under the radar),” he said.
“The ATO now charges interest on overdue amounts at nearly 10 per cent, which I find despicable.”
“Mixed into this is a plethora of fear around regulatory changes such as TASA, AML/CTF, NOCLAR, which all overlap and mean similar but different things – though the vibe is a sense that the accountant is liable for any client misdeeds we ‘ought to have known or reasonably queried’. Oh, and don’t forget Payday Super has started,” he said.
Looking back over his nearly two decades of working in an accounting practice, spanning back to the GFC in 2008, Garth said that this “has been the most turbulent and busy end of financial year on record”.
This said, and while there are plenty of challenges for practitioners to deal with, there are also positives.
“We’re run off our feet, and business has never been stronger from a numbers sense.”
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Jerome Doraisamy
Jerome Doraisamy is the managing editor of Momentum Media’s professional services suite, encompassing Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times. He has worked as a journalist and podcast host at Momentum Media since February 2018. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of the Minds Count Foundation.