Recently published figures from the ATO (Australian Tax Office) has shown that 2.1 million taxpayers across the country have so far received an average tax refund of $2,490 this contributing to a total of $5.3 billion, in the first four weeks into 2021 tax time.
Assistant Treasurer Michael Sukkar tried putting a positive spin on the figures as Greater Sydney residents faced the reality of four more weeks of lockdown. The extended lockdown is estimated to cost the economy upwards of $100 million a day.
“The injection of over $5.3 billion into the economy is welcome news during the current COVID-19 pandemic. Australians should be confident in the government’s plan for economic recovery and support for individuals and families across the country” said Assistant Treasurer Michael Sukkar.
The rush to lodge early this year comes as no surprise, as taxpayers look to secure their$1,080 low and middle-income tax offset, a measure that has been extended to this financial year and is anticipated to cover nearly 10 million people.
Taxpayers are also expecting larger refunds this year, with up to four and a half months of backdated stage 2 tax cuts, and substantial working-from-home expenses following a year hampered by covid-19 enforced lockdown restrictions which caused many businesses to close their office doors.
Over 170,000 Australians Lodged Their Tax Return On 1st July 2021
This year on 1st July over 170,000 taxpayers rushed to lodge their tax return. Despite this, the Australian Tax Office (ATO) has warned of common mistakes that could potentially result in some Australians have their refunds adjusted.
The ATO confirmed that 172,000 individual tax lodgements were received on 1st July 2021. These figures are just under a quarter of the 740,000 lodgements it received in its “biggest 1st July ever” last year.
When discounting the events of the covid-19 pandemic that led to the huge increase in 2020, the figures for 2021 are still an increase from the 100,000 lodgements that were made on 1st July 2019. This has come despite the ATO announcing that it would only commence the full processing of tax returns from 7th July this year.
This means that tax refunds are only expected to flow from Friday 16th July this year.
The huge number of early lodgements made by Australian taxpayers has come despite the fact that the ATO has given employers across the country until the end of July to complete their Single Touch Payroll finalisation declaration as a result of the covid-19 pandemic.
The ATO has said that lodging before income statements are finalised was an easy way to run into mistakes that could slow down refunds.
“We understand the rush to get a refund as fast as possible, but racing to lodge your return can often lead to easily avoidable mistakes,” says ATO assistant commissioner Tim Loh.
Cryptocurrency At Tax Time
Data from the ATO illustrates that there are over 600,000 taxpayers across Australia who have invested in crypto assets following a surging interest in the currency over the duration of the covid-19 pandemic.
This year, The Australian Tax Office (ATO) engaged around 100,000 taxpayers in the lead up to tax time to inform them about their required tax obligations as it moves to strengthen its stance on accounting for cryptocurrency.
On Friday 28th May, the ATO warned taxpayers that they will likely be contacted as there are growing concerns that many taxpayers incorrectly believe their cryptocurrency gains are tax-free or only taxable when their holdings are cashed into Australian dollars.
Furthermore, the ATO anticipates that their proactive engagement will result in at least 300,000 taxpayers to make note of cryptocurrency in their 2021 tax returns.
The ATO’s tough crackdown is followed by a softer educative approach adopted through the 2020 income year. Last year, the Tax Office contacted 100,000 taxpayers who had traded crypto assets and provoked 140,000 taxpayers to lodge returns.
The ATO is concerned that the anonymous nature of trading crypto assets led taxpayers to believe their investments were untraceable. ATO will head into tax time with access to more data and the ability to track those investing in crypto assets more closely.
The ATO is alarmed that a number of taxpayers think that the anonymity of cryptocurrencies provides a licence to ignore their tax obligations.
Although it appears that cryptocurrency operates in an anonymous digital world, the ATO has the power to closely track where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer.
The ATO will use data-matching methods to link transactions from cryptocurrency-designated service providers to individuals’ tax returns, to ensure investors are paying the correct amount of tax.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
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