Under the current self-assessment system, said H&R Block, taxpayers face big fines if they incorrectly claim deductions and do not declare income.
Mark Chapman, director of tax communication at the accounting network said the self-assessment system leaves taxpayers lodging returns on their own vulnerable to making mistakes and facing the consequences.
“This means in effect taxpayers can claim ‘anything within reason’ but if the claims are found to be incorrect, the taxpayer is required to repay the tax avoided, plus pay interest on incorrect claims at around 9.5 per cent per annum.
“If the ATO office believes that the taxpayer has acted carelessly, a penalty between 25 per cent and 95 per cent of the tax avoided may also be charged,” added Mr Chapman.
H&R Block has issued a list of common mistakes it says taxpayers must look out for, including not declaring all your income, alienation of personal services income, failure to claim excess imputation credits, failure to claim senior Australian tax offset and claiming tax deductions for items that you use part for work and part personally.
The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day