H&R Block recently undertook a study to review the accuracy of tax returns submitted through myTax.
Of the sample studied, just over 60 per cent contain errors. About two thirds of those errors favour the ATO and a third favour the taxpayer, said H&R Block’s director of communications Mark Chapman.
“Those findings were supported by other recent research which highlighted that whilst over 90 per cent of self-lodgers were confident that they had completed their myTax returns correctly, over 50 per cent of the same group was unable to accurately identify the correct treatment of common deduction items,” Mr Chapman told AccountantsDaily.
“[These include] self-education costs and work-related clothing, and well over half [were] unaware that income from pursuits such as ride-sharing is taxable,” he said.
As of mid-October, nearly 7.4 million individuals had lodged their 2016 tax returns, nearly 2.5 million of them using the ATO’s online lodgement system myTax. The rest – well over 5 million returns – were lodged by tax agents.
“On the face of it, those look like healthy figures for tax agents, but with an apparent market share of around 67 per cent, it’s worth noting that the percentage of returns lodged by tax agents so far this tax season is notably lower than the overall figure for 2015, when the percentage reached about 74 per cent, a figure that’s broadly in line with the trend for tax agent lodgements over many years,” Mr Chapman said.
“Of course, there are still plenty more lodgements to come in between now and the final deadline for agent-lodged returns next May, and it can be expected that the trend over that period will turn decisively in favour of tax agents, partly because the deadline for self-lodgers is now past and partly because remaining returns tend to be more complex in nature and less suited to the ATO’s do-it-yourself system.”
Turning year-end conversations into advisory work
By Tracey Loubser, Confident Cashflows PLUS
Young accountants and the future of our profession
By Paul Hilton, Power Tynan
Tips for managing change in your firm
By Louise Pope, Aequalis Consulting