Latest news with #AustralianTaxationOffice
Perth Now
43 minutes ago
- Business
- Perth Now
Billions to be slashed from student debt
Labor's key election promise to slash student debts by 20 per cent has passed parliament. More than 3 million Australians are set to see their debt reduced, with the average debt of about $27,600 receiving about $5520 in relief. The debts will be reduced automatically by the Australian Taxation Office over the coming months, with calculations backdated to the amount owed on June 1, 2025. The Opposition benches were notably empty as the Bill passed parliament on Thursday morning, with Labor, Greens and crossbench senators, David Pocock, Tammy Tyrell, and Fatima Payman supporting the motion. Education Minister Jason Clare said the promise was important to 'young Australians' who 'don't always see something for them on the ballot paper'. However he urged patience with the ATO now required to 'write about 50,000 lines of code to implement' the policy and 'make sure that they get it right'. 'But this is now going to happen. It's guaranteed and it will be backdated to 1 June this year, before indexation happened,' he told reporters. 'We're doing that for a reason – to make sure that we honour the promise we made to the Australian people in full, that we would cut their student debt by 20 per cent and today the parliament has acted and I'm glad to see that they have.' Labor's promise to slash thousands from students debts has passed parliament. NewsWire / Nicholas Eagar Credit: NewsWire One Nation senators Malcolm Roberts, Warwick Stacey and Tyron Whitten opposed the Bill. Standing up to speak after the Bill passed, Greens senator Sarah Hanson lashed the lack of Coalition presence in the Chamber, however was admonished by Senate president Sue Lines. 'I'd just like to draw attention to the state of the Opposition benches in the last 15 minutes. They seem to be invisible, missing,' said Senator Hanson-Young before she was cut off by Senator Lines. In response, the President said: 'This is not a time for a statement. It's not appropriate for a quorum because there are senators in here and the practice in this place is that we don't comment on whether senators are in the chamber or not'. The Bill also contained measures which will increase the minimum income repayment threshold before Australians begin to pay back their student loans from $54,000 to $67,000. Rates of repayments will also be lowered. More to come
News.com.au
6 hours ago
- Business
- News.com.au
‘Always makes my heart pound': Scary ATO scam trend that has become a ‘plague'
There's nothing that fills me with dread and panic more than an unexpected email from the ATO. But, at second glance the email that landed in my inbox this week is obviously a scam and it's clear I'm far from the only one receiving it. This year, I've been on the receiving end of a barrage of official-looking emails claiming to be from the Australian Taxation Office – spoiler alert, they're not. One of the most recent emails I received was the most realistic-looking email I'd gotten so far, which I stumbled upon while enjoying a lunch break at work. I instantly panicked because it appeared as a legitimate email from the Australian Taxation Office and I was caught off-guard. 'You have a new payment message in your inbox,' it read, with a 'View now' link to click. The email ended with, 'Regards, ATO.' It was simple and concise, which made the correspondence seem genuine. The email was particularly triggering because it's tax time, and I'm always worried I've made a mistake that will result in me owing the ATO a substantial amount of money. When the email appeared in my inbox my knee-jerk reaction was to click on it and see what the ATO wanted. I managed to stop myself from spiralling too much, and took a deep breath. I then clicked on the sender's email to double-check who sent it. Even though it appeared to be from the ATO, once I double-clicked on the email, it revealed a completely different and clearly unofficial email address. The ATO scam is scary, given how legitimate it appeared. If I had rushed to click on the link, we could be telling a very different story today. Thinking about what might have been is enough to give someone a stress rash. Accountant issues warning on 'plague' Accountant Linda Mirams said that ATO scams are becoming increasingly common to the point she called it 'a plague' that is impacting far too many Aussies. Ms Mirams had five clients this year alone who have been scammed by clicking on links in emails that they believed were official correspondence from the ATO. 'They prey on people thinking 'oh s**t, the ATO is going to come arrest me',' she told According to Ms Mirams, the way the scam works is that once people click on the link in the email, it somehow means hackers can obtain enough personal details to fill out the person's tax return without them knowing. The scammer then logs into the victim's myGov or ATO account, updates their bank details with their own, files their return, and pockets the refund. Obviously, because they're trying to get as much money back as possible. They'll also go to town on claiming stuff. Ms Mirams said the hackers are smart and also unlink people's tax agents from their accounts so accountants aren't notified. 'They are getting a few thousand dollars and are putting in deductions that the person wouldn't be able to claim,' she explained. 'Then they're getting the refunds and putting it in their bank accounts. One client was scammed and the person got her $5000 refund.' Often, clients will only discover they've been scammed after Ms Mirams goes to file their tax returns for them and discovers it has already been filed. 'I've stopped it a couple of times. I've contacted the ATO, and then they mark the tax file number as compromised,' she said. Ms Mirams explained she's only able to stop the transaction if the ATO hasn't already issued the refund. She managed to stop one scam recently, but only because her client clicked on the link and then regretted it, contacting her. 'If we catch it we can stop it,' she said. 'If it has already gone through then there's nothing we can do.' The seasoned accountant warned that people need to be particularly cautious this tax season to avoid falling victim to scams. They're sophisticated and realistic-looking, and it can be easy not to think to verify emails if the ATO makes you nervous. 'They make it look so legit. The key is never follow a link from an email. If myGov is asking you to do something go onto myGov and do it that way,' she said. 'Don't click on it. Call your tax agent or call the ATO.' Ms Mirams said one of the problems that comes with being scammed is that often you'll end up with a compromised tax number which is a 'nightmare' to remedy. In her experience, it also takes a long time for the ATO to sort it out because there's 'such a huge backlog' of scam victims at the moment. The accountant said she is aware of the emails, not just because of her clients, but also because she has received scam emails on her personal accounts. 'It is scary,' she said. ATO responds to email scam In a statement to the ATO encouraged Aussies to 'act quickly' if something feels wrong. 'The ATO's advice to taxpayers who are questioning if an ATO interaction is legitimate or not is to check their account on our online services through myGov or the ATO app, speak to their registered tax professional if they have one, or phone us on 1800 008 540 to confirm the legitimacy of the interaction,' a spokesperson said. 'If they think the interaction is fraudulent, it can be reported by sending an email to ReportScams@ The ATO explained that 'impersonation scams continue to remain a risk to the community' and it is important to remain cautious. 'ATO and myGov themed email phishing scams, and variations of these, are some of the most commonly reported scams received from the community and are on the rise. 'Scammer methods continue to evolve and become more sophisticated, linking to fraudulent websites, designed to steal taxpayer information,' the statement reads. The ATO also advised that it may contact taxpayers via SMS or email but it will 'never send an unsolicited message containing a hyperlink to log on to online services' and all taxpayers should remain vigilant. 'Before giving anyone your personal information it is important to Stop, Check and Protect. Stop – Never share your myGov sign in details, and only share personal information such as your Tax File Number (TFN), or bank account details, if you trust the person and they genuinely require them. 'Check – Ask yourself if the message or call could be fake. Is it really the ATO contacting you? Protect – Act quickly if something feels wrong or you've noticed suspicious activity on your ATO accounts.'
ABC News
a day ago
- Business
- ABC News
ATO to review processes around decision to cancel ex-PM's company's $950k tax bill
The Australian Taxation Office has moved to allay fears powerful individuals are given special treatment, saying it will review how it made a decision to wipe almost $1 million in penalties and interest from a company owned by former prime minister Paul Keating. "We are following up to ensure all processes were correctly adhered to," the ATO said in a statement following Monday night's Four Corners program. Four Corners revealed an abrupt about face from the tax office in 2015, which followed three years of negotiations and came after a formal payment notice for $953,000 was issued to Mr Keating's company. The decision was unusual because, for most taxpayers, formally challenging such a ruling on a so-called general interest charge (GIC) would typically require them to contest the matter in the Federal Court. "We note concerns raised in the segment about GIC remission for a high-profile taxpayer, which we take seriously," the ATO's statement said. "Where concerns are raised, we aim to respond through appropriate channels, including internal review, independent oversight, and, where necessary, improvements to our systems and processes. "The public rightfully expects the highest standards of integrity, fairness and accountability from us, and we take matters raised in the segment seriously." Jason Harris, a professor of corporate law at Sydney University, said the decision to waive the interest and penalties charge had the potential to undermine public trust in the tax system. "We have an example of someone very famous seemingly getting a special deal without any explanation and that should be a matter of public concern, even outside of tax," he said. "If we had a former PM getting a waiver on a driver's licence fee we should be equally concerned. There should be transparency." The tax debt was discovered in 2012 when the tax office realised that a company owned by Mr Keating had not reported profits from a 2004 share sale. While the company, Brenlex Pty Ltd, later paid the $446,000, the ATO then demanded more than $600,000 in interest and penalties that had accrued in the eight years since the sale occurred. The negotiations stretched over three years, during which time Mr Keating's advisers asked for the debt to be written off via a tax rule called a "commissioner's discretion". Mr Keating's advisers sought the exemption because the former prime minister mistakenly believed Brenlex had paid the tax and had "inadvertently failed to advise his directors" of the sale, the advisers told the tax office. Professor Harris said a commissioner's discretion was generally applied when a taxpayer had experienced some form of unfairness, such as bad advice from an accountant, or where there had been a significant event in their life, such as the death of a loved one. He said the reason Mr Keating's advisers gave — that he had forgotten he had not complied — did not pass muster. "It's outrageous," he said. In April 2015, the ATO issued Mr Keating a statutory demand for payment of the bill, which by then had grown to $953,396. Ten days after a final letter from Mr Keating's advisers, the tax office decided to cancel the debt in full. "I am able to confirm that the GIC and Late Lodgement Penalties … have been remitted in full," a tax official wrote. "Consequently the balance of the account has been reduced to nil and the amount payable as stated in the Creditors Statutory Demand is no longer owed." The email provided no reasons for the tax office's abrupt about face after three years of resisting the arguments of Mr Keating's financial advisers. The principal tax adviser at Australia's Institute of Public Accountants, Tony Greco, said the decision to waive Mr Keating's GIC appeared unusual on its face. "From a normal perspective, forgetting to pay your tax wouldn't be a strong case for remission of the GIC," he said. "More information needs to be provided to see whether they [the tax office] acted within their discretion." Professor of taxation law at UNSW, Michael Walpole, cautioned that not enough was known about Mr Keating's matter to be able to draw any firm conclusion. Speaking generally, he said it was desirable that, as long as they relied on the appropriate protocols, the tax office be able to reach settlements with taxpayers. The ATO told Four Corners in a statement last week that "inadvertently overlooking" the need to pay tax was generally not valid grounds on which to cancel GIC. "However, there may be instances where GIC is remitted when a taxpayer inadvertently overlooks the requirement to lodge a form or make a payment, depending on the individual circumstances of the taxpayer," the ATO said.
Daily Telegraph
a day ago
- Business
- Daily Telegraph
Huge profits as 20-year home move expires
There's a significant new trend in property investment: for the past three years, a majority of Australian investors have been positively or neutrally geared. That means their rental income has met or exceeded their expenses, including loan repayments. As a result, they've been pocketing extra income each year on top of any capital gains. This is a significant shift given the previous 20-year trend of most investors being negatively geared. The trend is revealed in FY23 tax data released by the Australian Taxation Office (ATO) last month. Based on all our tax returns, the ATO reports there were 2,261,080 Australians with an interest – either sole ownership or joint or part-ownership – in one or more rental properties in FY23. Among them, 51% – or 1,143,905 – reported net positive or neutral rental income. This is the third consecutive year in which more investors came out ahead after expenses. In FY22, 58% of investors reported positive or neutral net rental income. In FY21, it was 53 per cent. This follows a two-decade history prior to FY21 when the majority of investors were negatively geared each year. The fact that interest rates were at record lows in FY21 and FY22 is the most obvious reason why more investors were positively geared in those years. But what about FY23? The Reserve Bank of Australia raised interest rates 10 times (albeit from a low base) in FY23. The cash rate rose rapidly from 0.85 per cent to 4.1 per cent between July 2022 and June 2023, and yet most property investors remained positively geared. How is that so? I think several factors are contributing to what I hope might become a lasting trend. The biggest one is a huge surge in weekly rents that began in FY21 and continued into FY22 and FY23. Data shows annual rental growth of about 7 per cent in FY21, 9 per cent in FY22, and another 9 per cent in FY23. Additional rental income would have certainly offset the impact of rising interest rates in FY23. (The pace of rental growth has since slowed but remains above inflation, with annual increases of about 8 per cent in FY24 and 3.4 per cent in FY25.) Another contributing factor is the ageing profile of property investors. According to the data, the largest cohort of Australian investors are aged 60 years or older. The FY23 data shows more than one in four investors, or 27 per cent, are in this age group. This is relevant because older people typically have more wealth, after a lifetime of work and decades of owning their homes, and therefore have more scope to pay down investment debt. Retirement would also provide a new motivation to pay off debt, as would turning 60, since that's when many Australians can access their superannuation in a lump sum under certain conditions. Additionally, a rising number of baby boomers have been downsizing in recent years, which is freeing up funds to pay off loans or fund the purchase of a new property investment with cash. Owning property mortgage-free virtually guarantees strong positive cash flow, since loan repayments are by far the biggest cost for most landlords. I'm also mindful that since the pandemic, we have seen a significant trend in investors choosing to buy cheaper properties with higher rental yields in regional areas or investing in capital cities in states or territories that are more affordable than Sydney and Melbourne. This may also be contributing to the trend in more property investors being positively geared. Affordability is a key driver of this trend, but the pandemic also facilitated it. Lockdowns led to rapid changes in the industry, including enhanced online marketing tools and the provision of private inspections via video. Documentation like loans and property sale contracts went digital, making the financing and conveyancing processes more streamlined, and reducing the barrier of distance. I also think more investors are employing buyers' agents to do all the legwork for them, and this helps people access other states and territories to diversify their portfolios. Buyers' agents are readily available across the country, so investors can buy in the best-performing markets with confidence. For example, there is plenty of anecdotal evidence that East Coast investors have been buying in both the capital cities and regional areas of Western Australia and Queensland over the past few years. These states have been among the top performers in terms of home value growth for several years now. The best thing about more property investors being positively or neutrally geared is that it makes it easier for them to hold on to their investments for the long term. The real wealth from property investment comes from capital gains, and we know that the longer you hold your investment, the higher your capital growth is likely to be.
Courier-Mail
a day ago
- Business
- Courier-Mail
Huge profits as 20-year home move expires
There's a significant new trend in property investment: for the past three years, a majority of Australian investors have been positively or neutrally geared. That means their rental income has met or exceeded their expenses, including loan repayments. As a result, they've been pocketing extra income each year on top of any capital gains. This is a significant shift given the previous 20-year trend of most investors being negatively geared. The trend is revealed in FY23 tax data released by the Australian Taxation Office (ATO) last month. Based on all our tax returns, the ATO reports there were 2,261,080 Australians with an interest – either sole ownership or joint or part-ownership – in one or more rental properties in FY23. Among them, 51% – or 1,143,905 – reported net positive or neutral rental income. This is the third consecutive year in which more investors came out ahead after expenses. In FY22, 58% of investors reported positive or neutral net rental income. In FY21, it was 53 per cent. This follows a two-decade history prior to FY21 when the majority of investors were negatively geared each year. The fact that interest rates were at record lows in FY21 and FY22 is the most obvious reason why more investors were positively geared in those years. But what about FY23? The Reserve Bank of Australia raised interest rates 10 times (albeit from a low base) in FY23. The cash rate rose rapidly from 0.85 per cent to 4.1 per cent between July 2022 and June 2023, and yet most property investors remained positively geared. How is that so? I think several factors are contributing to what I hope might become a lasting trend. The biggest one is a huge surge in weekly rents that began in FY21 and continued into FY22 and FY23. Data shows annual rental growth of about 7 per cent in FY21, 9 per cent in FY22, and another 9 per cent in FY23. Additional rental income would have certainly offset the impact of rising interest rates in FY23. (The pace of rental growth has since slowed but remains above inflation, with annual increases of about 8 per cent in FY24 and 3.4 per cent in FY25.) Another contributing factor is the ageing profile of property investors. According to the data, the largest cohort of Australian investors are aged 60 years or older. The FY23 data shows more than one in four investors, or 27 per cent, are in this age group. This is relevant because older people typically have more wealth, after a lifetime of work and decades of owning their homes, and therefore have more scope to pay down investment debt. Retirement would also provide a new motivation to pay off debt, as would turning 60, since that's when many Australians can access their superannuation in a lump sum under certain conditions. Additionally, a rising number of baby boomers have been downsizing in recent years, which is freeing up funds to pay off loans or fund the purchase of a new property investment with cash. Owning property mortgage-free virtually guarantees strong positive cash flow, since loan repayments are by far the biggest cost for most landlords. I'm also mindful that since the pandemic, we have seen a significant trend in investors choosing to buy cheaper properties with higher rental yields in regional areas or investing in capital cities in states or territories that are more affordable than Sydney and Melbourne. This may also be contributing to the trend in more property investors being positively geared. Affordability is a key driver of this trend, but the pandemic also facilitated it. Lockdowns led to rapid changes in the industry, including enhanced online marketing tools and the provision of private inspections via video. Documentation like loans and property sale contracts went digital, making the financing and conveyancing processes more streamlined, and reducing the barrier of distance. I also think more investors are employing buyers' agents to do all the legwork for them, and this helps people access other states and territories to diversify their portfolios. Buyers' agents are readily available across the country, so investors can buy in the best-performing markets with confidence. For example, there is plenty of anecdotal evidence that East Coast investors have been buying in both the capital cities and regional areas of Western Australia and Queensland over the past few years. These states have been among the top performers in terms of home value growth for several years now. The best thing about more property investors being positively or neutrally geared is that it makes it easier for them to hold on to their investments for the long term. The real wealth from property investment comes from capital gains, and we know that the longer you hold your investment, the higher your capital growth is likely to be.
