Local finance guru shares tax time tips for workers
WORKERS will be winners from new changes to the reporting requirements of businesses at tax time, according to Rockhampton finance expert David French.
But the managing director of The Investment Collective has some timely advice for them - don't be in a rush to lodge your tax return this year as you might not be better off by doing so.
The ATO this week revealed that about nine million employees won't be receiving payment summaries direct from their employers this year as part of the reforms.
Instead, employees will be able to access this information online via their individual myGov (online) accounts.
Mr French, who has more than 25 years experience in finance and economics, said the changes came about because of the implementation of the ATO's single-touch payroll system.
"It means the ATO gets income data from employers as employees are paid,” he said.
"All employers with more than four staff are expected to be set up with single-touch payroll by now.”
Mr French said the new system meant the ATO could match the payroll data provided to employers to check whether they had their payroll tax and superannuation obligations up-to-date.
"This is a very positive development because many businesses do not pay their commitments to the ATO on time, and they do not pay employer superannuation,” he said.
"Having this type of real-time checking is good, both so that businesses pay the right amount of tax on behalf of their employees, and because employees will have the ATO in their corner shouting if super is not paid as it should be.”
Mr French said workers should not become complacent though.
"Employees should always look at their pay slips,” he said.
"Mistakes can be made and it's also important to check that superannuation is actually being paid to your super fund - you need to log on to your account in the fund and check.
"That's the best way to ensure you are getting what you are entitled to.”
ATO assistant commissioner Karen Foat said most employers had until July 31 to finalise their employees' income statements, and she strongly encouraged taxpayers to wait a few weeks before lodging their tax return.
"What she is saying here is that there is no point in lodging a return before employers have brought all of their data up-to-date,” Mr French said.
"Basically, if employees submit the data before the ATO has it and the data does not match that held by the ATO, there will be backwarding and forwarding to get it right which will obviously delay things.
"I'm not sure how many people have been listening though as 650,000 tax returns have already been lodged.”
The ATO says taxpayers who have linked their myGov accounts to ATO online services will receive a message when their income statement is tax-ready.
Mr French said the myGov portal, which provides access to government services - including the ATO, Centrelink and National Disability Insurance Scheme - was a good idea but far from user-friendly.
"Firstly, setting it up is a pain.
"Secondly, to use it you have to have access to a mobile phone which is next to useless for people who do not live in an area with mobile coverage like those living on the land.
"Alternatives exist, but you have to have a computer.
"On top of that, older people who may not be IT literate will simply find it difficult to use.”
Mr French said those who did not have access to computers would have to consult an accountant who could access the portal.