If your tax advice sounds too good to be true, it likely is.

In an age of every man and their dog being an ‘expert’ and often sharing that advice willy-nilly online, never has it been more critical to really know who you’re taking tax advice from. Especially when it comes to financial, tax and legal advice. There is good advice, bad advice and all sorts in-between

And, unlike ages past where if you got taken in by complete shonksters, you possibly couldn’t be blamed for not knowing the difference or being able to find out more information/double check the facts. However, today, there’s Google for you to use as a backstop for any information, especially tax advice, that sounds truly ‘amazing’ – aka too good to be true.

The rule is always, if it sounds too good to be true, no matter who it comes from, it likely is and you should double and triple check the facts before taking action. 

By way of warning, we thought we’d share the report of one WA tax-payer, Steven Russell Oxby – a man with a solid employment history AND of paying his taxes. 

Back in August of 2019, Mr Oxby attended a two-day paid seminar that proclaimed that paying tax was in fact a voluntary process – ie: if you didn’t want to pay tax, you didn’t have to. And worse, you could claim just about everything as long as what was being claimed allowed one to “sustain the production of income producing labour”. 

No doubt the people providing the seminar looked and sounded like the real deal. They claimed there was very specific language to use in putting forth such a claim such as the claims were made in order to “sustain the life of the living soul answering to the name ‘Steven Russell Oxby’”. That they knew this language, no doubt made them seem even more ‘professional’. 

And so claim, Mr Oxby did. He claimed dinners, clothing, rent and bills on his tax return that year – all amounting to almost $75,000 of deductions. Not only did Mr Oxby have to repay the tax owing on the wrongly claimed amounts, he was also fined more than $14,000 for his troubles. 

Maybe you’re laughing that anyone could be so taken in by this (or you’re secretly amazed at the audacity of it all). However, as an accountant of more than 20 years, all I can do is shake my head in disbelief. 

What really surprises me about all of this, is not only did Mr Oxby think this was reasonable despite years of being a regular tax payer, but that he didn’t think to double check whether what someone told him, despite his previous experience, was valid. It also makes me wonder what the legal liability is of those providing such advice. But I digress. 

Surely if he’d have called the ATO, or an accountant or financial adviser, solicitor, even probably his bank (not that it’s their job), or his local member of parliament, they would have corrected him and set him straight.

All he really needed to do was Google

But, he didn’t even have to call anyone. A simple Google search (such as the one I did just now to see what turned up) on “do I have to pay tax Australia”, pops up with 436 million results – many of those on the first page belong to the ATO, treasury and other government sites. And their advice is quite simple to follow. Everyone pays tax unless you fall under the earnings threshold, which is currently $18,200 (you still have to lodge a tax return though).

This ATO page on claimable expenses – outlines that you can claim deductions for SOME expenses you incur in your tax return. Most are work related expenses you incur in earning your income as an employee. It’s then further broken down into;

  • Work-related expenses
  • Other deductions
  • Occupation and industry specific guides

There’s even an easy video to getting your deductions right. 

 All the information is written in pretty simple to read English and if you need it in another language, I’m sure there are translations available (and you can do that in Google too). 

Plus there are plenty of online news sites that routinely, especially around tax time, provide specific examples of what you can’t claim (meals, clothes that aren’t branded-type  uniforms you’ve paid for or high-vis wear, rent and bills on your home – even if you’re working from home).

If you’re relying on Google for financial information, be careful

If you’re using Google though, there’s one thing to be really aware of. Even when you’ve specifically asked about Australia, Google will still often show you results largely from the United States where the tax laws are very, VERY different (and also change on a state by state basis). So please double check what you’re reading is in fact Australian advice and check when it was written for good measure. If it’s any older than a couple of years, double check somewhere else or seek advice from a qualified tax professional.

So how do you make sure you get good tax advice?

Tax legislation and your obligations as an Australian tax payer are complex and the legislation changes frequently, so it’s easy to think you’re across it, when in fact you might not be. Plus there’s research that says at the end of the day, if you’re really after a better tax return (and you’ve got a level of valid deductions), it pays to use a qualified tax professional.

The ATO doesn’t take kindly to an incorrect response or submission, even if you think you’re doing the right thing and ignorance is never an excuse. The ATO always get paid.

Of course, if you’re interested in getting professional taxation or financial advice tailored to you and your very specific circumstances, you can call us on 6023 1700 or connect with us via Facebook or LinkedIn.

Got a question? Get in touch

If you've got financial or business questions, or you just want to run something by us, we'd be delighted to really talk to you – in person, over the phone - call us on 02 6023 1700 - or you can use the form below and we'll get back to you.

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About us:

Lloyd Accounting is a boutique accounting firm based in North Albury that operates with the sole purpose of making your tax and business affairs as easy as possible. For us, it's about really understanding what it is you're wanting to achieve and then using our experience and expertise to help facilitate that.

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Lloyd Accounting is now located at 932 Waugh Rd, North Albury, NSW.

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