Over 4 million tax return refunds have now been sent out, compared to 3 million refunds issued in the same period last year.
The spike in taxpayers rushing to lodge this year follows the passage of the government’s personal income tax cuts, with low and middle-income earners chasing the $1,080 offset.
ATO assistant commissioner Karen Foat said that despite the agency’s best efforts to issue refunds, some mistakes, including the omission of income, have slowed down the process.
“When refunds get sent to incorrect bank accounts, redirecting them to your new account will take more time. This tax time, we’ve seen some people who are really keen to get their refund, having missed this important step,” Ms Foat said.
“Another big obstacle getting between some people and their return is forgetting to declare some income. Common things people forget to include are rental income, bank interest and government allowances or payments — particularly if they lodged before our prefill was available.
“If our data shows us that you’ve likely left out income, that can slow down the processing of your return while we make additional checks.”
Omitted income is one of two main components the Tax Office believes is fuelling the $8.7 billion individual not in business tax gap.
Work-related expenses are the other main driver for the gap, with deductions for rental property expenses also contributing, albeit to a lesser extent.
“Our data analytics also flags instances of people making claims out of the norm for their occupation and income level,” Ms Foat said.
“While we want people to claim what they are entitled to, where claims seem unusual we may do some additional checks, which could mean longer until you get your refund. So, make sure you only claim what you are entitled to and keep your receipts so that you’ll have them on hand quickly if we do need to see them.”
The rush to lodge early this year comes even as the ATO warned that early lodgers could be susceptible to making errors because of the lack of prefill data.
The Institute of Public Accountants general manager of technical policy Tony Greco also warned against lodging early this year, citing the introduction of Single Touch Payroll as a potential tripping point, leading to incomplete data and a possible spike in tax assessments.