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Fiveminute tax returns spark surge in diy lodgement at ato

TAXPAYERS eager to grab a quick refund are taking charge of their own tax return in record numbers.

The Australian Taxation Office says the number of people completing their own tax return last month was 20 per cent higher than a year ago, and included more than 10,000 who lodged on July 1.

The ATO has already handed back 1.85 million refunds, worth $4.8 billion, and says new technologies such as its streamlined online lodgement system myTax have driven the surge in do-it-yourself returns.

Assistant commissioner Graham Whyte said completing a return with myTax could take as little as five minutes and be done on a PC, smartphone or tablet.

Launched last year, myTax only asks questions relevant to the person lodging and automatically includes information provided by employers, banks, government agencies and other third parties, he said.

Most of this pre-filled data had now been provided, Mr Whyte said. In many cases, people just need to review the information, add in a few details and click submit.

The ATOs records show that in July almost 800,000 self-lodgers used myTax, more than 400,000 used the 15-year-old longer-form e-tax, and more than two million people lodged through a tax agent.

Deakin University senior lecturer in tax and financial planning Adrian Raftery said the lure of getting money back from the taxman was larger for workers today because many were using their own cars rather than company cars, taking work home and setting up home offices where they could claim deductions for equipment, technology and energy use.

So theres the likelihood of a greater refund, he said.

Dr Raftery said the jump in online returns showed that people had become more comfortable sending personal data over the internet. An element of trust has been built.

He said online self-lodgement had been aggressively promoted by the ATO. The promise of pre-filled data was another positive, but it increased the risk of people getting their tax wrong by filing too soon and missing things such as investment fund income that had not yet been sent to the ATO.

The ATO systems had a bad July. A lot of newbies have tried lodging returns online but have had a bad experience. It might not be as popular this time next year, Dr Raftery said.

The ATO plans to retire e-tax next year, and says myTax will be available for all taxpayers, including rental property owners and sole traders.

Savings grow slowly as term deposits remain low

SAVERS with cash stashed in the bank are continuing to receive low returns and some lenders have already started to drop their interest rates.

While homeowners are revelling in the Reserve Banks cash rate drop to 1.75 per cent, those looking to grow their savings are becoming increasingly frustrated.

Deposit marketplace Cashwerkz estimated savers could be losing interest on up to $3.8 billion of term deposits every year simply by not paying attention.

Lenders attract customers with an attractive 12 or 24 month rate but, when that term expires it usually drops to a nominal interest rate so to maximise your income you need to move it elsewhere.

Data from financial comparison website Canstar found some smaller lenders including the Bank of Sydney and Qld Police Credit Unit have dropped their interest rates on some term deposit accounts recently so its critical borrowers sit and up take notice.

Macquarie Bank even got in early by reducing its term deposit rates the day before the last recent cash rate decision with decreases ranging from five to 20 basis points.

We expect to see many institutions cut term deposit rates,’ says Canstar spokeswoman Justine Davies.

At-call (online) saving deposit rates are already so low that in many instances theres nothing more to cut.

Canstars database shows on a $10,000 deposit the average interest rate on a six month term deposit is 2.59 per cent, a 12 month term deposit is slightly higher at 2.69 per cent while an online at-call savings account pays an average of just 1.9 per cent.

Online savings accounts allow customers to have flexibility and access their funds at any time without penalty but often include conditions which dont suit everyone.

Cashwerkzs chief executive officer John Edginton says term deposits have long been a popular savings mechanism, particularly for older Australians, but he says they have definitely taken a tumble.

People need to continually watch what rate they are getting and when it expires rather than just rolling it over, look at what else is out there in the marketplace,’ he says.

Theres also a lot of money in savings accounts that is potentially earning no interest or a very small fraction.

He suggests savers mark their term deposit expiry date on their calendar and make sure they review it before it rolls over to a lower interest rate.