Aussies worried by tax time, use refunds to catch up on bills

Almost a third (31%) of Australians are worried about tax time, with top concerns cited as making a mistake (41%), finding it confusing (40%) and not knowing what can be claimed (38%), according to recent research by MYOB.

Twenty-eight per cent of the 1,052 survey respondents plan to use their tax refund to catch up on bills and 23% will invest it. Ten per cent will use the money to pay for a holiday and four per cent will use it to buy something frivolous. One in five (19%) don’t expect to get much back.

Changes brought about by COVID-19 means this will be a different tax year for many, with increased working from home, new subsidies and potentially a different income tax bracket to factor in.

Apprehension around tax time can by allayed by leaning on professionals who can assist, according to Jacqueline Lim, MYOB’s Tax Specialist.

“End of Financial Year is daunting for many, and the research shows only 43% of respondents use an accountant or tax agent to manage their tax. 

“A tax agent can assist with the record-keeping requirements and by explaining what expenses can be claimed. Speaking to a specialist could be worthwhile to maximise your return. 

“For example, the changes in many employees’ working arrangements during COVID-19 restrictions led to the ATO introducing a shortcut method for claiming working from home related tax deductions. It is worthwhile considering whether this option could lead to a better financial result than using the existing methods.”

Tax time will provide a cash injection for some, though only 10% of respondents expect their refund will be higher than last year. 

Compared to the previous year, one in five respondents (21%) say their income in the 2020-2021 financial year will be lower. For 61% of those, the drop in income was specifically due to the COVID-19 pandemic.

“For individuals lodging their own tax return, it’s important to remember the 31 October deadline, if this is missed it can lead to financial penalties. Also ensure any tax owed is paid on time to avoid interest charges from the ATO.

“If you expect a tax refund this year, consider lodging online, as the refund process is faster and money is deposited directly into your bank account,” Ms. Lim said.

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For further comment or other information please contact:

Selina Ife, Communications Consultant, MYOB
E: [email protected] 

About MYOB

MYOB is a leading business platform with a purpose of helping more businesses in Australia and New Zealand start, survive and succeed. MYOB delivers end-to-end business management tools and accounting solutions for SMEs and the mid-market, direct to businesses, as well as a network of accountants, bookkeepers and consultants. MYOB operates across four key segments: Small and Medium Enterprises (SME), Enterprise, Financial Services and Practice. For more information visit myob.com or follow @MYOB on Twitter.