On Wednesday 31 July 2013, Tax Counsel Deepti Paton CTA attended the weekly Tax Time 2013 update with the members of the ATO Tax Practitioner Forum (ATPF). Subsequent to this meeting, the ATO has issued the following key messages:
- Tax Time 2013 is proceeding very well.
- The ATO has received approximately 2,470,000 returns (for all years) and has finalised approximately 1,482,000 returns (for all years).
Processing performance compared with Tax Time 2012 (current year returns)
|Returns Recived||Returns Finalised||Number of Refunds Issued||Value of Refunds Issued|
|To 28 July 2013||2,210,000||1,131,000||1,096,000||$2.46bn|
|To 28 July 2012||2,373,000||1,216,000||1,184,000||$2.4bn|
Telephony service standard performance to date:
From 1 July 2013 to 30 July 2013 we received 1,025,295 inbound calls and achieved service commitments of:
- Tax practitioner calls - 88.4% of calls answered within 2 minutes
- General taxpayer calls - 80.5 % of calls answered within 5 minutes
During this period, the average wait time was 41 secs for Tax practitioners and 124 secs for general taxpayers.
(From 1st July 2013, full industry standard is being used to calculate the service commitments. This calculation excludes escalated and abandoned calls from “within standard” totals. Escalated calls are now excluded from the calls received total).
Weekly updates on performance standards are published on our website.
As at 23 July 2013:
- 13,336 returns have been stopped for review;
- 6,665 have been by registered preparer channels.
As at 30 July 2013, data loaded onto the pre-filling tables was as follows:
- Payment Summaries – 52%
- Interest – 80%
- Dividend – 81%
- Private Health Insurance – 0%
- Taxable Payments Annual Reports – 0%.
Pre–Filling Private Health
BUPA and Medibank have lodged, however no data has been loaded to the pre-fill tables due to processing issues which are currently under active management. Agents can still lodge using the information provided in their clients’ private health insurance statements.
Pre-Filling Taxable Payments Annual Report
Data not loaded to pre-fill pending completion of testing and validation.
Centrelink payment summaries
This year Centrelink will not be sending annual payment summaries to their clients, instead Centrelink recipients can obtain it themselves through:
- Centrelink Online Services
- Express Plus mobile apps
- Self-service terminals at Centrelink service centres
- When they are calling their usual payment line.
If for some reason your clients' Centrelink payments do not show on the pre-filling report on the Tax Agent Portal, you should ask them to obtain a payment summary from the range of options Centrelink are providing.
DHS has advised that they have not ceased the automatic issue of amended payment summaries. Their customers will continue to receive amended payment summaries as per the current process.
Your clients can find out more details by going to the Centrelink website
Ensure the IT5 and IT6 income tests labels are completed correctly
In 2012-13 individual income tax returns, the IT5 and IT6 labels are auto-filled from other labels and sub-labels in the return. Agents need to check that these amounts are correct prior to lodgment.
When preparing your clients' returns, you need to split investment-related income and deductions into three components:
- financial investments – relevant to IT5;
- rental income – relevant to IT6;
by completing the required sub-labels.
Some returns have been completed incorrectly with:
- Other deduction D15 expenses such as income protection insurance attributed to the ‘financial investments‘ sub-label rather than 'other';
- General business losses being attributed to the ‘financial investments‘ sub-label rather than 'other';
- Low value pool expenses attributed to the ‘financial investments‘ sub-label rather than 'other'.
Incorrect completion of the sub-labels could mean overstating your clients’ adjusted taxable income. This could result in a reduced entitlement to a private health insurance offset or affect their adjusted taxable income used in calculating certain benefits and child support payments if they are customers of the Department of Human Services.
If you have any feedback on this matter could you please contact us at firstname.lastname@example.org. If possible, please provide details of the software package used.
Important Private Health Information
- $1 debit rounding to calculate the correct amount of the private health insurance rebate
The ATO has implemented rounding rules for notices of assessment such that a liability for an amount less than or equal to 99 cents will be rounded down to nil. For amounts greater than $1 the amount is not rounded. This outcome was the subject of a late change request published on the Software Industry Liaison Unit (SILU) website and accordingly it is possible that not all software providers were able to build the rounding rules into their products.
- Ex-spouses with dependent children
A problem has arisen for ex-spouses who both declare their children as dependents when providing their private health insurance information to the ATO where the children live part-time with each parent.
In these circumstances, and assuming that all the dependents are covered by an appropriate level of private health insurance, both parents are substantially maintaining the dependent children and therefore will not be subject to Medicare levy surcharge and will be income tested based on the family thresholds.
- What thresholds (single or family) will apply to each single parent?
In short, single parents who contribute in a substantial way to the maintenance of the dependent child during the income year are income tested on the family thresholds.
For the Private health insurance, this is the relevant frequently asked question from our Webpage.
- I separated from my spouse during the year. What income should I use to calculate my rebate?
If you separated from your spouse during the financial year and remain single with no dependents as at 30 June of that year, your rebate entitlement is calculated only on your own income (that is, the single income thresholds apply).
If you separated from you from your spouse during the year but substantially maintain a dependent child you will be income tested under the family income thresholds.
For Medicare levy surcharge purposes; this is the explanation of family from this Webpage.
- Family situation
We consider you to be a member of a family during any period during the year that you contributed to the maintenance of a dependant. Any parent, including a sole parent, who contributed to the maintenance of a dependent child or children is considered to be a member of a family.
- In what circumstances will the single parents be subject to Medicare levy surcharge
A single parent may be liable for Medicare levy surcharge if they, and all their dependants, do not have an appropriate level of private health insurance cover.
Extract from our webpage:
- You do not have to pay Medicare levy surcharge if you had an appropriate level of private patient hospital cover for the whole of the year and you:
- did not have any dependants;
- had dependants who all had an appropriate level of private patient hospital cover for the whole of the year.
Members who require further information should contact us at Tax Policy.