More Aussies lodging their tax on time
Tax refunds in 2015-16 totalled $43.1 billion, but that’s not the most amazing figure that has come out of the ATO’s Annual Report for 2015-16.
This tax year saw several exciting improvements in the ATO’s digital services, and the results are in: More individual Aussie taxpayers and companies lodged their tax return on time in 2014-15 than in previous years.
As of June 2016, 88% of 2014-15 tax returns had been lodged, with 82% lodged on time.
In 2015-16, the number of individuals owing the ATO a “collectable debt” fell by 11.4% compared to 2014-15. The amount of collectable debt owed by individuals also decreased, by 8.2%.
The ATO says the decrease in individuals filing a late tax return – or not filing one at all – is due to their new early intervention programs. Habitual late-payers received an SMS reminder this year around tax time. Those who owed the ATO a debt were offered the option to set up a payment plan online, and the ATO found this method to be 22% more effective in collecting debt than other payment plan methods. This enabled the ATO to enter into 950,000 payment plans in 2015-16, or 17% more than last year.
However, the gain was slower in the small business sector. The number of small businesses earning less than $2 million who lodge their tax return, lodge their BAS, or pay their tax bill on time has been steadily increasing since 2010-11. But this year the increase was just 0.2% compared to more than 1.0% in previous years. 75% of companies lodged their tax return on time, compared to 83% of individual taxpayers.
— ato.gov.au (@ato_gov_au) November 25, 2016
The Digital By Default strategy employed by the ATO this year also appears to have made tax time easier for many Aussie taxpayers. From March 2015, the ATO website went through a site-wide refresh to make it simpler and less confusing. Survey and beta testing respondents have told the ATO the new website and digital services are easier to use, with the information now online being easier to understand and more reliable.
Other innovations introduced this year include the ATO app, the myDeductions tool, and Virtual Assistant Alex, which we discuss in detail below.
Source: Australian Taxation Office
ATO app now available for Google, Android, Apple, and Microsoft smartphones
More than 2.8 million people self-lodged their 2014-15 tax return using myTax and e-tax, on top of the 5.9 million people who lodged electronically through a tax agent. The next logical step was being able to lodge your tax return using your smartphone or tablet – and this year it became a reality.
The newly-released ATO app means taxpayers, small businesses, and SMSFs can now lodge a tax return from their smartphone or tablet, and also enables users to:
- Track the progress of your tax return
- Get tax and super information more quickly
- Use your voiceprint to access ATO online services for individuals and sole traders
- Pre-fill deductions into your next tax return by uploading deductions into myDeductions tool such as donations, work-related expenses, interest, dividends, and more (only available for individual employees, not small businesses or sole traders)
- Calculate how much tax to withhold from salary and wages
- Set reminders and alerts for tax and super obligations
- Compare your business against small business benchmarks with the Business Performance Check tool
- Visit SMSF Assist
- Use tax tools and calculators
Source: Australian Taxation Office
Virtual Assistant Alex now available to answer questions
Ever wanted an easier way to find the answers to your questions on the ATO website? Alex, the ATO’s new Virtual Assistant, answered over 15,000 questions in her first week on the job in March 2016.
By June 2016, after 3 months on the job, Alex had held over 270,000 conversations, averaging a first contact resolution rate of 75%.
— ato.gov.au (@ato_gov_au) July 29, 2016
Do your tax, consolidate your super
Many Australians followed the ATO’s prompt to consolidate their super accounts this year when they lodged their tax returns through myGov (MyTax 2016). More than 529,000 accounts were consolidated using myGov in 2015-16, which is an increase of 18% over 2014-15. The amount of super held in these funds added up to $2.5 billion, an increase of 29% from last year.
In total, the ATO still holds 5.7 million lost super accounts worth over $14.8 billion, but this is better than last year when they held 6.2 million accounts worth $16.2 billion.
Getting your tax right
This year the tax office’s enforcement focus was on omitted income, rental properties, and work-related expenses.
A “pop-up tax office” was piloted in a shopping centre in Melbourne in April 2016, and its great success led to opening 30 more pop-up tax offices in shopping centres around Australia at tax time. The pop-up offices were manned by ATO staff who could answer people’s general tax and super questions, show them how to use digital services, and explain the “enforcement focus” areas.
Phoenix schemes were another tax crime focus area for the ATO this year. The tax office conducted almost 1,000 audits into phoenix schemes, charging tax debts of around $250 million to these schemes. Another $133 million in tax liabilities were charged by the multi-agency Serious Financial Crime Taskforce for high priority serious financial crimes such as international tax evasion fraud and trust fraud, including the Panama Papers.
Tax agents still have a vital role to play
It would be understandable if tax agents were feeling miffed by the latest digital rollout by the ATO, with taxpayers being encouraged to self-lodge online using the MyTax tool via the central myGov website. Tax agents remain responsible for lodging tax returns for around 74% of individual taxpayers and around 95% of businesses (CPA Australia).
However, CPA Australia says in the last 12 months, they have seen the number of people using tax agents actually increase rather than decreasing and turning to MyTax. This may be largely because for the first time, the ATO also publicly encouraged people to seek professional tax advice:
“I think this year, certainly, the tax office’s messaging to the public … has amplified the importance of the role of the tax agent: ‘If you are not preparing yourself, go and see a tax agent.'” (Mr Paul Drum, Head of Policy, CPA Australia, in House of Representatives Hansard, 23 November 2016)
From July to October 2015, there were 5.9 million tax returns for 2014-15 lodged electronically by tax agents, on top of the 2.8 million lodged via myTax and e-tax.
The ATO has also dug into solving technical issues that have plagued tax agents en masse with the ATO website and the new digital tools. The ATO conducted 30 public forums with almost 2,600 tax agents and BAS agents, and also provided in-person, one-on-one advice in agents’ offices about systems issues, showing that they have reallocated resources to reprioritise engaging with tax agents.
With the move away from paper lodgements and phone calls to communicating and lodging with the ATO electronically, Mr Arthur Athanasiou of the Tax Institute says there will undoubtedly be “teething problems”. However, the Tax Institute expects that in a couple of years, “everything will have settled down” so that as MR Athanasiou put it, “We will not have the problems of the past.”
ATO on track to protect our planet
The ATO’s annual report shows it is on track to achieve its 2016-17 environmental protection goals to remain ecologically sustainable in most areas, as follows:
- Carbon emissions: 40% reduction achieved since 2011-12 (target was a 25% reduction)
- Electricity consumption: 11% year-on-year reduction achieved last year and this year
- Paper use: 68% reduction achieved since 2011-12, and 100% recycled paper used
- Air travel: 14% increase this year, largely due to in-person consultations involved in Reinventing The ATO program