Hate filling out your tax return? The Australian Taxation Office could have the answer. The federal budget, which will be released on May 13, is expected to include ‘tick and flick’ tax returns from 1 July 2014.
Up to 1.4 million Australian taxpayers could be saved from the hassle of completing their tax returns, in a move by government to reduce an annual $1 billion worth of red tape.
Not only will it save on costly red tape, it should also save individuals time and money. According to the latest Tax Statistics released earlier this week, taxpayers spend 4.6 hours on average filling out their tax returns, or an average of $371 paying someone else to do it.
So, who gets to tick and flick? The ATO was unable to provide details as to which taxpayers would qualify for the new plan, or how you would find out if you are eligible.
“We’ve identified this as a possible service initiative and we’re working towards it,” said an ATO spokesperson. However, another announcement is expected in coming months which should clarify the details.
Tick and Flick to ‘No Touch’ tax returns
The idea behind tick and flick is that the taxpayer will receive a pre-completed tax return, with details such as income earned, tax paid, Medicare claims, bank interest, shares and dividends already completed for them.
For obvious reasons, this service would only be available to taxpayers with straightforward tax returns – those who are wage and salary earners with bank interest, dividends and straightforward deductions.
When the taxpayer receives this tick and flick tax return, all he needs to do is check it, sign it to declare that the pre-filled information is accurate and complete, and send it back to the ATO.
However, the next step would be to introduce a ‘no touch’ tax return, which would allow taxpayers to accept the pre-completed tax return without having to take any action.
A trial of automated tax returns is expected to take place between 2015 and 2016, with more than 4.5 million taxpayers taking part.
While this new system has raised some cause for concern among retail tax agents, most believe the change will not affect them, as tick and flick returns would be targeted mainly at DIY tax lodgers.
Tax industry groups also support streamlining process for the majority of taxpayers. “We support anything that makes compliance easier for taxpayers with simple tax affairs,” Institute of Chartered Accountants Australia head of tax policy Michael Croker said.
Thank you for your taxes
One of Treasurer Joe Hockey’s campaign promises was to provide tax receipts to each taxpayer showing how their tax dollars were spent, including how much money was spent on welfare, health, education, defence and other spending.
In the May budget, Hockey is expected to keep that promise, announcing the introduction of ‘thank you’ tax receipts from July 1 this year.
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