Australia’s largest group of tax accountants, H&R Block, has challenged a call by Mr Geoff Leeper, Second Commissioner of the Australian Tax Office, for the ATO move to automated tax returns, possibly linked to a change to the system which would see taxpayers claim less deductions.
The firm, which has 440 offices across Australia, said the ATO’s push to automation can only work if the deductions rules are changed so that the ability to claim work-related deductions is either dramatically scaled back or replaced with some form of standard deduction. Millions of taxpayers could lose out as a result.
Mark Chapman, Director of Tax Communications at H&R Block said “Whilst we believe the ATO has a duty to make life as easy as possible for taxpayers – and automation is an element of that – that can’t be at the expense of the legitimate ability of taxpayers to offset work-related expenditure they have incurred against their income.”
“Automation has proven overseas to work against the interests of many individual and business taxpayers, who are entitled to claim deductions as part of their income producing activity”.
H&R Block recently submitted a Green Paper submission as part of the Federal Government’s now-suspended review of the tax system, reflecting the concerns of its 750,000 clients, who are typically ordinary Australians, particularly individuals, families and small businesses.
The group’s formal response to the Federal Government’s White Paper on tax reform (“Re:think”), includes suggestions to improve the tax system like:
· Loosening the rules around the deductibility of self-education expenses so that taxpayers can claim the costs of career advancement (so that, for instance, nurses could claim the costs of training to become doctors).
· Maintaining the current ability of taxpayers to claim deductions for work-related expenses on the grounds that such deductions are fair and in many cases essential to enabling employees to fulfil their duties at work.
· Introducing further tax breaks for small business, including the ability to offset trading losses against prior-year taxable income and simplifying the various small business capital gains concessions.
